RECEIVABLES PURCHASE AGREEMENT

RECEIVABLES PURCHASE AGREEMENT

Dated as of June 2, 2009

among

FERRO FINANCE CORPORATION, as Seller,

FERRO CORPORATION, as Collection Agent,

THE PURCHASERS FROM TIME TO TIME PARTY HERETO

and

WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent

RECEIVABLES PURCHASE AGREEMENT

THIS RECEIVABLES PURCHASE AGREEMENT dated as of June 2, 2009, is among:

(a) Ferro Finance Corporation, an Ohio corporation ( “Seller” ),

(b) Ferro Corporation, an Ohio corporation ( “Ferro” ), as initial Collection Agent,

(c) Wachovia Bank, National Association ( “Wachovia” or a “ Purchaser ” and, together with its successors and assigns, the “ Purchasers ”), and

(d) Wachovia Bank, National Association, in its capacity as Agent for the Purchasers (in such capacity, together with its successors and assigns, the “Agent” ).

Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I.

PRELIMINARY STATEMENTS

Seller desires to transfer and assign Receivable Interests to the Purchasers from time to time.

Each Purchaser shall purchase its Percentage of each Receivable Interest from Seller from time to time.

Wachovia Bank, National Association has been requested and is willing to act as Agent on behalf of the Purchasers in accordance with the terms hereof.

ARTICLE I.

PURCHASE ARRANGEMENTS

Section 1.1 Purchase Facility .

(a) On the terms and subject to the conditions set forth in this Agreement, Seller may from time to time prior to the Facility Termination Date, sell Receivable Interests to the Purchasers by delivering (or causing Collection Agent to deliver, on Seller’s behalf) a Purchase Notice to each Purchaser in accordance with Section 1.2 . Upon receipt of a Purchase Notice, each of the Purchasers agrees to purchase its Percentage of such Receivable Interest, on the terms and subject to the conditions hereof, provided that (i) at no time may the aggregate Capital of any Purchaser at any one time outstanding exceed the lesser of (A) the amount of such Purchaser’s Commitment hereunder, and (B) such Purchaser’s Percentage of the difference between the Net Pool Balance and the Required Reserve, and (ii) in no event shall the Aggregate Capital outstanding hereunder exceed the lesser of (x) the Purchase Limit and (y) the difference between the Net Pool Balance and the Required Reserve. Each Purchaser’s Commitment to Seller under this Agreement shall terminate on the Facility Termination Date.

(b) Seller may, upon at least five (5) Business Days’ notice to the Agent and each Purchaser, terminate in whole or reduce in part, ratably amongst the Purchasers in accordance with their respective Percentages, the unused portion of the Purchase Limit; provided that each partial reduction of the Purchase Limit shall be in an aggregate amount equal to $1,000,000 or a larger integral multiple of $500,000.

Section 1.2 Increases . If, on any Business Day prior to the Facility Termination Date, there is Investment Availability reflected on the Daily Report for the preceding Business Day, Seller (or Collection Agent, on Seller’s behalf) may, if desired, request an Incremental Purchase in accordance with this Section 1.2 . Seller (or Collection Agent, on Seller’s behalf) shall provide each Purchaser with notice of each Incremental Purchase by 11:00 a.m. (New York City time) on the day of each such Incremental Purchase in a form set forth as Exhibit II hereto (a “Purchase Notice” ). Each Purchase Notice shall be subject to Section 6.2 hereof and, except as set forth below, shall be irrevocable and shall specify the requested Purchase Price (which shall be at least $200,000 or a larger integral multiple of $100,000) and date of purchase (which shall be a Business Day) and the requested Yield Rate. If any Purchase Notice is delivered later than 11:00 a.m. (New York City time) on the date of such proposed Incremental Purchase, the Purchasers will make such Incremental Purchase on a best-efforts basis only. On the date of each Incremental Purchase, upon satisfaction of the applicable conditions precedent set forth in Article VI, each Purchaser shall initiate a wire transfer to the Facility Account, in immediately available funds, no later than 3:00 p.m. (New York City time), an amount equal to its Percentage of the Purchase Price of the Receivable Interest then being purchased.

Section 1.3 Voluntary Decreases . Seller (or Collection Agent, on Seller’s behalf) shall provide each Purchaser with written notice no later than 11:00 a.m. (New York City time) on the same Business Day of any proposed voluntary reduction of Aggregate Capital (each, a “Reduction Notice” ). Such Reduction Notice shall designate (i) the date upon which any such reduction of Aggregate Capital shall occur, (ii) the amount of Aggregate Capital to be reduced (the “Aggregate Reduction” ), (iii) each Purchaser’s Percentage of such Aggregate Reduction, which shall be applied ratably to the Receivable Interests of each Purchaser in accordance with the amount of Capital (if any) owing to such Purchaser. Only one (1) Reduction Notice shall be outstanding at any time.

Section 1.4 Payment Requirements .

(a) Each Lock-Box Bank shall be instructed to transfer collected funds in each Lock-Box Account on any Business Day not later than 4:00 p.m. (New York City time) on each Business Day, and any such funds received after such time shall be deemed to be received on the next succeeding Business Day.

(b) Each Seller Party shall initiate a wire transfer of amounts to be paid or deposited by it pursuant to any provision of this Agreement no later than 1:00 p.m. (New York City time) on the day when due in immediately available funds. If such amounts are payable to the Agent or to Wachovia, they shall be paid to the Wachovia Account until otherwise notified by Wachovia.

(c) All computations of Yield, per annum fees hereunder and per annum fees under the Fee Letter shall be made on the basis of a year of three hundred sixty (360) days for the actual number of days elapsed. If any amount hereunder shall be payable on a day which is not a Business Day, such amount shall be payable on the next succeeding Business Day. Any amounts received or deemed received by Agent in accordance with the terms of this Section 1.4 shall be applied in accordance with Section 2.4 or 2.5 , as applicable, on the Business Day following the Business Day of such receipt or deemed receipt for all purposes under this Agreement (including, with out limitation, the computation of Yield, per annum fees hereunder and per annum fees under the Fee Letter).

Section 1.5 Deemed Collections . Upon the occurrence of any Dilution, Seller shall be deemed to have received a Deemed Collection and such Deemed Collection shall be immediately applied to reduce the Net Pool Balance by the amount of such Deemed Collection. To the extent the effect of such Deemed Collection on the Net Pool Balance shall cause an Investment Excess, the Seller shall forthwith deliver to the Collection Agent in immediately available funds an amount equal to the lesser of (i) the sum of all Deemed Collections deemed received by Seller and (ii) an amount necessary to eliminate such Investment Excess and Collection Agent shall remit the same to the Agent pursuant to Section 2.1 .

ARTICLE II.

PAYMENTS AND COLLECTIONS

Section 2.1 Daily Turnover of Collections . All Collections and all payments required pursuant to Section 1.5 shall be paid by the Collection Agent to the Agent on each Business Day.

Section 2.2 Mandatory Capital Settlement . If, on any Business Day, there is an Investment Excess reflected on the Daily Report for the preceding Business Day, the Seller shall pay such Investment Excess to the Agent for distribution to the Purchasers (ratably in accordance with their respective Percentages) for application to the Aggregate Capital until such Investment Excess is eliminated.

Section 2.3 Reinvestments . On each day prior to the Facility Termination Date which is not a Capital Settlement Date or a Monthly Payment Date, subject to Section 2.5 and the last sentence of this Section 2.3 , Collections shall first be applied to making additional Purchases of undivided interests in Receivables and Related Security, such that after giving effect thereto, the Aggregate Capital outstanding from the Purchasers is equal to the Aggregate Capital outstanding immediately prior to receipt of such Collections (each such Purchase, a “Reinvestment” ) so long as after giving effect to such Reinvestment, the aggregate of the Receivable Interests does not exceed 100%. Each Reinvestment will be presumed to be made ratably amongst the Purchasers in accordance with their respective Percentages. If on any Settlement Date (or any date on which a voluntary reduction in Aggregate Capital occurs under Section 1.3 ), there are insufficient Collections to pay all Required Amounts, the next available Collections shall be applied to such payment, and no Reinvestment shall be permitted hereunder until such amount payable has been paid in full.

Section 2.4 Order of Application of Collections on Monthly Payment Dates . Upon receipt by the Agent, on behalf of the Purchasers, on any Monthly Payment Date of Collections and/or other payments pursuant to Sections 1.5, 2.1 and/or 4.2 , the Agent shall apply them as follows:

first, to the payment of the Collection Agent’s reasonable and properly documented out-of-pocket costs and expenses in connection with servicing, administering and collecting the Receivables, including the Servicing Fee if Ferro or one of its Affiliates is not then acting as the Collection Agent,

second, if applicable, to the reimbursement of the Agent’s costs of collection and enforcement of this Agreement,

third, ratably to the payment of all accrued and unpaid Unused Fees and Yield that are then due and owing for the Calculation Period then most recently ended and any remaining unpaid from a prior Calculation Period,

fourth, to payment of any Investment Excess or requested Aggregate Reduction,

fifth, solely if requested by the Agent, to an account specified by the Agent to be held as collateral, an amount equal to the Unused Fees and/or Yield that have accrued during the current Calculation Period prior to such Monthly Payment Date,

sixth, for the ratable payment of all other unpaid Obligations, provided that to the extent such Obligations relate to the payment of Collection Agent costs and expenses, including the Servicing Fee, when Ferro or one of its Affiliates is acting as the Collection Agent, such costs and expenses will not be paid until after the payment in full of all other Obligations,

seventh, unless the Facility Termination Date has occurred and except to the extent a Reduction Notice has been delivered, to the Facility Account as the proceeds of a Reinvestment if permitted in accordance with Section 6.2 ,

eighth, unless the Facility Termination Date has occurred, to the making of any Incremental Purchase requested in accordance with Section 1.2 and subject to Section 6.2 ,

ninth, if the Facility Termination Date has occurred or if Seller is unable to satisfy the conditions precedent to a Reinvestment or Incremental Purchase under Section 6.2 , to the ratable reduction of the Aggregate Unpaids until reduced to zero, and

tenth, after all Aggregate Unpaids have been indefeasibly reduced to zero, to Seller.

Collections applied to the payment of Aggregate Unpaids shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth above in this Section 2.4 , shall be shared ratably (within each priority) among the Agent and the Purchasers in accordance with the amount of such Aggregate Unpaids owing to each of them in respect of each such priority.

Section 2.5 Order of Application of Collections on Business Days other than Monthly Payment Dates . Upon receipt by the Agent, on behalf of the Purchasers, on any Business Day other than a Monthly Payment Date of Collections and/or other payments pursuant to Sections 1.5, 2.1 and/or 4.2 , the Agent shall distribute and apply them as follows:

first, to payment of any Investment Excess or requested Aggregate Reduction,

second, solely if requested by the Agent, to an account specified by the Agent to be held as collateral, an amount equal to the Unused Fees and/or Yield that have accrued during the current Calculation Period prior to such Monthly Payment Date,

third, unless the Facility Termination Date has occurred and except to the extent a Reduction Notice has been delivered, to the Facility Account as the proceeds of a Reinvestment if permitted in accordance with Section 6.2,

fourth, unless the Facility Termination Date has occurred, to the making of any Incremental Purchase requested in accordance with Section 1.2 and subject to Section 6.2 ,

fifth, if the Facility Termination Date has occurred or if Seller is unable to satisfy the conditions precedent to a Reinvestment or Incremental Purchase under Section 6.2 , to the ratable reduction of the Aggregate Unpaids until reduced to zero, and

sixth, to Seller.

Collections applied to the payment of Aggregate Unpaids shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities set forth above in this Section 2.5 , shall be shared ratably (within each priority) among the Agent and the Purchasers in accordance with the amount of such Aggregate Unpaids owing to each of them in respect of each such priority.

Section 2.6 Payment Rescission . No payment of any of the Aggregate Unpaids shall be considered paid or applied hereunder to the extent that, at any time, all or any portion of such payment or application is rescinded by application of law or judicial authority, or must otherwise be returned or refunded for any reason. Seller shall remain obligated for the amount of any payment or application so rescinded, returned or refunded, and shall promptly pay to the applicable Purchaser or the Agent the full amount thereof together with any Yield thereon from the date of any such rescission, return or refunding.

Section 2.7 Repurchase Option . Seller shall have the right (after providing at least five (5) Business Days’ prior written notice to the Agent and the Purchasers, to repurchase all, but not less than all, of the Receivable Interests. The purchase price in respect thereof shall be an amount equal to the Aggregate Unpaids through the date of such repurchase, payable in immediately available funds. Such repurchase shall be without representation, warranty or recourse of any kind by, on the part of, or against any Purchaser except for a representation and warranty that the reconveyance to Seller is being made free and clear of any Adverse Claim created by the applicable Purchaser. On the date of repurchase of the Receivable Interests pursuant to this Section 2.7 , the Commitments of the Purchasers shall automatically terminate.

ARTICLE III.

[RESERVED]
ARTICLE IV.

PURCHASER FUNDING

Section 4.1 Purchaser Funding . Each Receivable Interest shall accrue Yield for each day at either the LMIR or the Alternate Base Rate in accordance with the terms and conditions hereof. Until Seller gives notice to the applicable Purchaser of another Yield Rate in accordance with Section 4.3 , the initial Yield Rate for any Receivable Interest shall be the LMIR.

Section 4.2 Yield Payments . On each Monthly Payment Date, Seller shall pay to the Agent for payment to the applicable Purchaser an aggregate amount equal to the accrued and unpaid Yield for the Calculation Period then most recently ended of each such Receivable Interest in accordance with Article II.

Section 4.3 Yield Rates . Seller may select LMIR (if it is available) or the Alternate Base Rate for each Receivable Interest of any Purchaser. Until Seller gives notice to the applicable Purchaser of another Yield Rate, the Yield Rate for any Receivable Interest purchased by any Purchaser shall be LMIR. To change any Yield Rate, Seller shall by 11:00 a.m. (New York City time) at least one (1) Business Day prior to the date such Yield Rate change is to take effect for any Receivable Interest, give the applicable Purchaser irrevocable notice of the new Yield Rate for the Receivable Interest associated with such Yield Rate. From and after the occurrence and during the continuation of an Amortization Event, the sole Yield Rate shall be the Alternate Base Rate.

Section 4.4 Suspension of LMIR . If any Purchaser determines that funding its Receivable Interests at the LMIR would violate any applicable law, rule, regulation, or directive of any governmental or regulatory authority, whether or not having the force of law, or that such LMIR does not accurately reflect the cost of acquiring or maintaining a Receivable Interest, then such Purchaser shall suspend the availability of such LMIR, as the case may be, and require Seller to select the Alternate Base Rate for any of its Receivable Interests accruing Yield at such LMIR.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

Section 5.1 Representations and Warranties of Seller . Seller hereby represents and warrants to the Agent and the Purchasers, as to itself, as of the date hereof and as of the date of each Incremental Purchase and the date of each Reinvestment that:

(a)  Existence and Power . Seller is duly organized, validly existing and in good standing under the laws of its state of organization. Seller is duly qualified to do business and is in good standing as a foreign corporation, and has and holds all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted except where the failure to so qualify or so hold could not reasonably be expected to have a Material Adverse Effect.

(b)  Power and Authority; Due Authorization, Execution and Delivery . The execution and delivery by Seller of this Agreement and each other Transaction Document to which it is a party, the performance of its obligations hereunder and thereunder and the use of the proceeds of purchases made hereunder, are within its corporate powers and authority and have been duly authorized by all necessary corporate action on its part. This Agreement and each other Transaction Document to which Seller Party is a party has been duly executed and delivered by Seller.

(c)  No Conflict . The execution and delivery by Seller of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder do not contravene or violate (i) its certificate or articles of incorporation or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any material agreement, Contract or instrument to which it is a party or by which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on assets of Seller (except as created hereunder) except, in any case, where such contravention or violation could not reasonably be expected to have a Material Adverse Effect; and no transaction contemplated hereby requires compliance with any bulk sales act or similar law.

(d)  Governmental Authorization . Other than the filing of the financing statements required hereunder, 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 and delivery by Seller of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder.

(e)  Actions, Suits . Seller represents and warrants that (i) there are no actions, suits or proceedings pending, or to the best of Seller’s knowledge, threatened, against or affecting Seller, or any of its properties, in or before any court, arbitrator or other body, that could reasonably be expected to have a Material Adverse Effect, and (ii) Seller is not in default with respect to any order of any court, arbitrator or governmental body.

(f)  Binding Effect . This Agreement and each other Transaction Document to which Seller is a party constitute the legal, valid and binding obligations of Seller enforceable against Seller in accordance with their respective 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).

(g)  Accuracy of Information . Seller represents and warrants that all information (other than projections) heretofore furnished by Seller or by any Authorized Officer of an Originator to the Agent or any of the Purchasers for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by Seller or any such Authorized Officer to the Agent or any of the Purchasers will be, true and accurate in every material respect on the date such information is stated or certified and does not and will not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading.

(h)  Use of Proceeds . Seller represents and warrants that it will not use the proceeds of any purchase hereunder (i) for a purpose that violates, or would be inconsistent with, Regulation T, U or X promulgated by the Board of Governors of the Federal Reserve System from time to time or (ii) to acquire any security in any transaction which is subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.

(i)  Good Title . Seller represents and warrants that immediately prior to each purchase hereunder, Seller shall be the legal and beneficial owner of the Receivables and Related Security with respect thereto, free and clear of any Adverse Claim, except as created by the Transaction Documents. Seller represents and warrants that there have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Seller’s ownership or security interest in each Receivable, its Collections and the Related Security.

(j)  Perfection . Assuming the filing of the UCCs approved by the Seller on the date hereof (which will be filed by the Agent or its representatives), Seller represents and warrants that this Agreement, together with the filing of the financing statements contemplated hereby, is effective to, and shall, upon each purchase hereunder, transfer to the Agent for the benefit of the relevant Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or Purchasers shall acquire from Seller) a valid and perfected first priority undivided percentage ownership or security interest in each Receivable existing or hereafter arising and in the Related Security and Collections with respect thereto, free and clear of any Adverse Claim, except as created by the Transactions Documents. Seller represents and warrants that there have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Agent’s (on behalf of the Purchasers) ownership or security interest in the Receivables, the Related Security and the Collections.

(k)  Places of Business and Locations of Records . The principal places of business and chief executive office of Seller and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit III or such other locations of which the Agent and the Purchasers have been notified in accordance with Section 7.2(a) in jurisdictions where all action required by Section 14.4(a) has been taken and completed. Seller’s Federal Employer Identification Number and Organizational Identification Number are correctly set forth on Exhibit III.

(l)  Collections . Each of the Seller Parties represents and warrants that the conditions and requirements set forth in Section 7.1(j) and Section 8.2 have at all times been satisfied and duly performed. Seller represents and warrants that the names and addresses of all Lock-Box Banks, together with the account numbers of the Lock-Box Accounts of Seller at each Lock-Box Bank and the post office box number of each Lock-Box, are listed on Exhibit IV. Seller represents and warrants that Seller has not granted any Person, other than the Agent as contemplated by this Agreement, control of any Lock-Box Account, or the right to take control of any such Lock-Box Account at a future time or upon the occurrence of a future event. Seller represents and warrants that each of the Lock-Box Banks has been duly instructed to wire all available funds in the Lock-Box Accounts on each Business Day to the Wachovia Account.

(m)  Material Adverse Effect . Seller represents and warrants that since December 31, 2008, no event has occurred that would have a Material Adverse Effect.

(n)  Names . In the past five (5) years, Seller has not used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement.

(o)  Ownership of Seller . Seller represents and warrants that Ferro and the Originators, collectively, own, directly or indirectly, 100% of the issued and outstanding Capital Securities of all classes of Seller, free and clear of any Adverse Claim. Seller represents and warrants that such capital stock is validly issued, fully paid and nonassessable, and that there are no options, warrants or other rights to acquire securities of Seller.

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

(q)  Compliance with Law . 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, 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, in each case, where such contravention or violation could not reasonably be expected to have a Material Adverse Effect.

(r)  Compliance with Credit and Collection Policy . Seller has complied in all material respects with the Credit and Collection Policy with regard to each Receivable and the related Contract, and has not made any material change to such Credit and Collection Policy.

(s)  Payments to Applicable Originator . With respect to each Receivable transferred to Seller under the Purchase and Contribution Agreement, Seller has given reasonably equivalent value to Ferro in consideration therefor and such transfer was not made for or on account of an antecedent debt. No transfer by any Originator of any Receivable under the Purchase Agreement or the Purchase and Contribution Agreement is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101 et seq.), as amended.

(t)  Enforceability of Contracts . Seller represents and warrants that each Contract with respect to each Eligible Receivable is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Eligible 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).

(u)  Eligible Receivables . Seller represents and warrants that each Receivable included in the Net Pool Balance on a Monthly Report as an Eligible Receivable was an Eligible Receivable as of the last day of the month covered by such Monthly Report.

(v)  No Investment Excess . Seller represents and warrants that Seller has determined that, immediately after giving effect to each Purchase hereunder, no Investment Excess exists.

(w)  Financial Information . All balance sheets, all statements of income and of cash flow and all other financial information of Seller and each of Ferro and its Subsidiaries (other than projections) furnished to Agent or any Purchaser and described in Section 7.1 have been and will be prepared in accordance with GAAP consistently applied, and do or will present fairly the consolidated financial condition of the Persons covered thereby as at the dates thereof and the results of their operations for the periods then ended; provided that unaudited financial statements of Seller and each of Ferro and its Subsidiaries have been prepared without footnotes, without reliance on any physical inventory and are subject to year-end adjustments. Any projections furnished by Seller or by any Authorized Officer of an Originator to the Agent or any of the Purchasers for purposes of or in connection with this Agreement were prepared in good faith based upon estimates and assumptions stated therein which, at the time of preparation, were believed to be reasonable.

(x)  OFAC . Neither Seller nor any Originator nor any Subsidiary of any Originator (i) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such person in any manner violative of Section 2, or (iii) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

(y)  Patriot Act . Each of Seller and the Originators and each Subsidiary of any Originator are in compliance, in all material respects, with the USA Patriot Act (Title 111 of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”). No part of the proceeds of the Purchases will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

ARTICLE VI.

CONDITIONS OF PURCHASES

Section 6.1 Conditions Precedent to Initial Purchase . The initial Purchase of a Receivable Interest under this Agreement is subject to the conditions precedent that (a) the Agent shall have received on or before the date of such purchase those documents listed on Schedule B, (b) the Agent and each of the Purchasers shall have received all fees and expenses required to be paid on such date pursuant to the terms of this Agreement and the Fee Letter, and (c) the sum of Investment Availability, borrowing availability under the Senior Credit Agreement and unencumbered and unrestricted cash is greater than or equal to $65 million.

Section 6.2 Conditions Precedent to All Purchases and Reinvestments . Each purchase of a Receivable Interest and each Reinvestment shall be subject to the further conditions precedent that (a) in the case of each such purchase or Reinvestment the Collection Agent shall have delivered to the Agent and the Purchasers on or prior to the date of such purchase, in form satisfactory to the Agent, all Receivables reports as and when due under Section 8.5; (b) the Facility Termination Date shall not have occurred; and (c) the Agent and the Purchasers shall have received such other approvals, opinions or documents as it may reasonably request and (d) on the date of each such Incremental Purchase or Reinvestment, the following statements shall be true (and acceptance of the proceeds of such Incremental Purchase or Reinvestment shall be deemed a representation and warranty by Seller that such statements are then true):

(i) the representations and warranties set forth in Section 5.1 are true and correct in all material respects on and as of the date of such Incremental Purchase or Reinvestment as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall remain true and correct in all material respects as of such earlier date; provided, however, that so long as the Senior Credit Agreement does not require the datedown as of each borrowing date of the absence of material adverse change representation thereunder, the representation contained in Section 5.1(m) of this Agreement need only be true as of the date of the initial Purchase hereunder;

(ii) no event has occurred and is continuing, or would result from such Incremental Purchase or Reinvestment, that will constitute an Amortization Event or a Potential Amortization Event; and

(iii) the Aggregate Capital does not exceed the Purchase Limit and the aggregate Receivable Interests do not exceed 100%.

It is expressly understood that each Reinvestment shall, unless otherwise directed by the Agent or any Purchaser, occur automatically on each day that the Collection Agent shall receive any Collections without the requirement that any further action be taken on the part of any Person and notwithstanding the failure of Seller to satisfy any of the foregoing conditions precedent in respect of such Reinvestment. The failure of Seller to satisfy any of the foregoing conditions precedent in respect of any Reinvestment shall, for so long as such condition fails to be satisfied, give rise to a right of each Purchaser, which right may be exercised at any time on demand of such Purchaser, to rescind the related purchase and direct Seller to pay to such Purchaser its Percentages of the Collection prior to the Facility Termination Date that shall have been applied to the affected Reinvestment.

ARTICLE VII.

COVENANTS

Section 7.1 Affirmative Covenants of the Seller Parties . Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms:

(a)  Financial Reporting . Such Seller Party will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish or cause to be furnished to the Agent and each Purchaser:

(i) Annual Reporting. As soon as available and in any event within ninety (90) days after the end of each Fiscal Year, (A) a copy of the consolidated balance sheet of Ferro and its Subsidiaries, and the related consolidated statements of income and cash flow of Ferro and its Subsidiaries for such Fiscal Year, setting forth in comparative form the figures for the immediately preceding Fiscal Year, audited (without any Impermissible Qualification) by a “Big Four” accounting firm or other independent public accountants acceptable to the Agent, together with (B) comparable unaudited annual financial statements (other than cash flow statements) of Seller.

(ii) Quarterly Reporting. As soon as available and in any event within forty-five (45) days after the end of each of the first three Fiscal Quarters of each Fiscal Year, (A) an unaudited consolidated balance sheet of Ferro and its Subsidiaries as of the end of such Fiscal Quarter and consolidated statements of income and cash flow of Ferro and its Subsidiaries for such Fiscal Quarter and for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter, and including (in each case), in comparative form the figures for the corresponding Fiscal Quarter in, and year to date portion of, the immediately preceding Fiscal Year, certified as complete and correct by the chief financial or accounting Authorized Officer of Ferro (subject to normal year-end audit adjustments), together with (B) comparable unaudited quarterly financial statements (other than cash flow statements) of Seller.

(iii) Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit V signed by the applicable Seller Party’s Authorized Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be.

(iv) Shareholders Statements and Reports. Promptly upon the furnishing thereof to the shareholders of Ferro, copies of all financial statements, reports and proxy statements so furnished.

(v) S.E.C. Filings. Promptly upon the filing thereof, copies of all registration statements (other than any registration statements on Form S-8 or its equivalent) and any reports on Form 10-K or 10-Q which Ferro files with the Securities and Exchange Commission.

(vi) Copies of Notices. Promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Originator or any Lock-Box Bank, copies of the same.

(vii) Senior Credit Agreement Notices . Promptly upon furnishing thereof to the “Administrative Agent” or any “Lender” under and as defined in the Senior Credit Agreement, copies of all reports, notices compliance certificates and other information required to be delivered pursuant to the Senior Credit Agreement including, without limitation, all information described in section 7.1.1 of the Senior Credit Agreement (in each case without duplication of any of the items described above in this Section 7.1(a) .

(viii)

Ferro Holidays. Not later than five (5) Business Days prior to January 1 of each calendar year hereafter, Seller shall deliver to the Agent the list of Ferro Holiday for the upcoming calendar year. The Ferro Holidays for the 2009 calendar year are listed in Schedule C attached hereto.

(ix) Other Information. Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the financial condition, operations, prospects or business of such Seller Party as the Agent or any Purchaser may from time to time reasonably request in order to protect the interests of the Agent and the Purchasers under or as contemplated by this Agreement.

Reports and financial statements required to be delivered pursuant to clauses (i), (ii), (iv) and (v) of this Section 7.1(a) shall be deemed to have been delivered on the date on which Ferro posts such reports, or reports containing such financial statements, on Ferro’s website on the Internet at www.ferro.com or when such reports, or reports containing such financial statements, are posted on the SEC’s website at www.sec.gov. and Agent receives written notification of such posting (which may be provided by email).

(b)  Notices . Such Seller Party will notify the Agent and each Purchaser in writing of any of the following promptly upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto:

(i) Amortization Events or Potential Amortization Events. The occurrence of each Amortization Event and each Potential Amortization Event, by a statement of an Authorized Officer of such Seller Party.

(ii) Judgment and Proceedings. (A) (1) The entry of any judgment or decree against the Collection Agent or any of its respective Subsidiaries if the aggregate amount of all judgments and decrees then outstanding against the Collection Agent and its Subsidiaries exceeds $7,500,000 after deducting (x) the amount with respect to which the Collection Agent or any such Subsidiary is insured and with respect to which the insurer has acknowledged responsibility, and (y) the amount for which the Collection Agent or any such Subsidiary is otherwise indemnified if the terms of such indemnification are satisfactory to the Agent and each Purchaser, and (2) the institution of any litigation, arbitration proceeding or governmental proceeding against Seller or the Collection Agent which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; and (B) the entry of any judgment or decree against Seller if the aggregate amount of all judgments and decrees then outstanding against Seller exceeds $12,000 after deducting (x) the amount with respect to which Seller is insured and with respect to which the insurer has acknowledged responsibility, and (y) the amount for which Seller is otherwise indemnified if the terms of such indemnification are satisfactory to the Agent and each Purchaser.

(iii) Material Adverse Effect. The occurrence of any event or condition that has had, or could reasonably be expected to have, a Material Adverse Effect .

(iv) Defaults Under Other Agreements. The occurrence of a default or an event of default under any other financing arrangement relating to a line of credit or Indebtedness in excess of $7,500,000 in aggregate principal amount pursuant to which any Originator is a debtor or an obligor.

(v) Events of Termination and Incipient Events of Termination. The occurrence of an Event of Termination or an Incipient Event of Termination under the Purchase Agreement or the Purchase and Contribution Agreement.

(c)  Compliance with Laws and Preservation of Corporate Existence . Such Seller Party will comply 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. Such Seller Party will preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where its business is conducted, except where the failure to so preserve and maintain or qualify could not reasonably be expected to have a Material Adverse Effect.

(d)  Audits . Such Seller Party will furnish to the Agent and each Purchaser from time to time such information with respect to it and the Receivables as the Agent or any of the Purchasers may reasonably request. Such Seller Party will, from time to time during regular business hours as requested by the Agent or any Purchaser upon reasonable notice and at the sole cost of such Seller Party, permit the Agent and each of the Purchasers, or their respective agents or representatives (and shall cause each Originator to permit the Agent and each of the Purchasers or their respective agents or representatives): (i) to examine and make copies of and abstracts from all Records in the possession or under the control of such Person relating to the Receivables and the Related Security, including, without limitation, the related Contracts, and (ii) to visit the offices and properties of such Person for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to such Person’s financial condition or the Receivables and the Related Security or any Person’s performance under any of the Transaction Documents or any Person’s performance under the Contracts and, in each case, with any of the officers or employees of Seller or the Collection Agent having knowledge of such matters. After completion of a post-closing field exam, it is anticipated that field exam frequency will be semi-annual, but any Purchaser may request more frequent exams.

(e)  Keeping and Marking of Records and Books .

(i) The Collection Agent will (and will cause each Originator to) maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable). The Collection Agent will (and will cause each Originator to) give the Agent and each Purchaser notice of any material change in the administrative and operating procedures referred to in the previous sentence.

(ii) Collection Agent will (and will cause each other Originator to) (A) on or prior to the date hereof, make a notation in its books and records relating to the Receivables, acceptable to the Agent and each Purchaser, describing the Receivable Interests and (B) upon the request of the Agent or any of the Purchasers following the occurrence and during continuation of an Amortization Event, deliver to the Agent all invoices included in the Contracts (including, without limitation, all multiple originals of any such invoice) relating to the Receivables.

(f)  Compliance with Contracts and Credit and Collection Policy . Collection Agent will (and will cause each other Originator to) timely and fully (i) perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (ii) comply in all material respects with the Credit and Collection Policy in regard to each Receivable and the related Contract.

(g)  Performance and Enforcement of Purchase Agreement and Purchase and Contribution Agreement . Seller will, and will require each of the Originators to, perform each of their respective obligations and undertakings under and pursuant to the Purchase Agreement and the Purchase and Contribution Agreement, as applicable. Seller will purchase Receivables under the Purchase and Contribution Agreement in strict compliance with the terms thereof and will vigorously enforce the rights and remedies accorded to the applicable purchaser under the Purchase Agreement and the Purchase and Contribution Agreement. Seller will take all actions to perfect and enforce its rights and interests (and the rights and interests of the Agent and the Purchasers as assignees of Seller) under the Purchase Agreement and the Purchase and Contribution Agreement as the Agent and any Purchaser may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in the Purchase Agreement and the Purchase and Contribution Agreement.

(h)  Ownership . Seller will (or will require each Originator to) take all necessary action to (i) vest legal and equitable title to the Receivables, the Related Security and the Collections irrevocably in Seller, free and clear of any Adverse Claims other than Adverse Claims in favor of the Agent and the Purchasers (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Seller’s interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of Seller therein as the Agent and any Purchaser may reasonably request), and (ii) establish and maintain, in favor of the Agent, for the benefit of the Purchasers, a valid and perfected first priority undivided percentage ownership interest (and/or a valid and perfected first priority security interest) in all Receivables, Related Security and Collections to the full extent contemplated herein, free and clear of any Adverse Claims other than Adverse Claims in favor of the Agent for the benefit of the Purchasers (including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect the Agent’s (for the benefit of the Purchasers) interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of the Agent for the benefit of the Purchasers as the Agent or any Purchaser may reasonably request).

(i)  Corporate Separateness . Seller acknowledges that the Agent and the Purchasers are entering into the transactions contemplated by this Agreement in reliance upon Seller’s identity as a legal entity that is separate from each of the Originators and their respective other Affiliates (collectively, the “Ferro Group” ). Therefore, from and after the date of execution and delivery of this Agreement, Seller shall take all reasonable steps, including, without limitation, all steps that the Agent or any Purchaser may from time to time reasonably request, to maintain Seller’s identity as a separate legal entity and to make it manifest to third parties that Seller is an entity with assets and liabilities distinct from those of the members of the Ferro Group thereof and not just a division thereof. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, except as herein specifically otherwise provided, Seller will:

(i) At all times maintain at least one Independent Director who (x) is not currently and has not been during the five years preceding the date of this Agreement an officer, director or employee of any member of the Ferro Group, (y) is not a current or former officer or employee of the Seller and (z) is not a stockholder of any member of the Ferro Group;

(ii) refrain from participating, directly or indirectly, in the management of operations of any member of the Ferro Group;

(iii) conduct its business from an office separate from that of the members of the Ferro Group (but which may be located in the same facility as one or more of the members of the Ferro Group), and have stationery and other business forms and a mailing address and a telephone number separate from that of the members of the Ferro Group;

(iv) at all times be adequately capitalized in light of its contemplated business;

(v) at all times provide for its own operating expenses and liabilities from its own funds;

(vi) maintain its assets and transactions separately from those of the members of the Ferro Group and reflect such assets and transactions in financial statements separate and distinct from those of the members of the Ferro Group and evidence such assets and transactions by appropriate entries in books and records separate and distinct from those of the members of the Ferro Group;

(vii) hold itself out to the public under its own name as a legal entity separate and distinct from the members of the Ferro Group, and refrain from holding itself out as having agreed to pay, or as being liable, primarily or secondarily, for, any obligations of the members of the Ferro Group;

(viii) refrain from maintaining any joint account with any member of the Ferro Group or becoming liable as a guarantor or otherwise with respect to any Indebtedness or contractual obligation of any member of the Ferro Group;

(ix) refrain from making any payment or distribution of assets with respect to any obligation of any member of the Ferro Group or granting an Adverse Claim on any of its assets to secure any obligation of any member of the Ferro Group;

(x) refrain from making loans, advances or otherwise extending credit to any of the members of the Ferro Group;

(xi) hold regular duly noticed meetings of its Board of Directors and make and retain minutes of such meetings;

(xii) refrain from engaging in any transaction with any of the members of the Ferro Group, except as permitted by this Agreement and as contemplated by the Purchase and Contribution Agreement;

(xiii) maintain at all times the Required Capital Condition and refrain from making any dividend, distribution, redemption of capital stock or payment of any subordinated indebtedness which would cause such Required Capital Condition to cease to be so maintained; and

(xiv) take such other actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinion issued by Baker & Hostetler LLP, as counsel for the Purchaser, in connection with the closing or initial Incremental Purchase under the Receivables Purchase Agreement and relating to substantive consolidation issues, and in the certificates accompanying such opinion, remain true and correct in all material respects at all times.

(j)  Collections . Such Seller Party will cause (1) all proceeds from all Lock-Boxes to be directly deposited by a Lock-Box Bank into a Lock-Box Account and (2) each Lock-Box and Lock-Box Account to be subject at all times to a Lock-Box Agreement that is in full force and effect. Seller will instruct each Lock-Box Bank to initiate a wire transfer of all available funds in each of its Lock-Box Accounts to the Wachovia Account not later than 4:00 p.m. (New York City time) on each Business Day. In the event any payments relating to Receivables are remitted directly to Seller or any Affiliate of Seller, Seller will remit (or will cause all such payments to be remitted) directly to a Lock-Box Bank and deposited into a Lock-Box Account within one (1) Business Day following receipt thereof, and, at all times prior to such remittance, Seller will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Agent and the Purchasers.

(k)  Taxes . Such Seller Party will file all tax returns and reports required by law to be filed by it and will promptly pay all taxes and governmental charges at any time owing, except any such taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. Seller will pay when due any taxes payable in connection with the Receivables, exclusive of taxes on or measured by income or gross receipts of the Agent or any of the Purchasers.

(l)  Insurance . Seller will maintain in effect, or cause to be maintained in effect, at Seller’s own expense, such casualty and liability insurance as Seller shall deem appropriate in its good faith business judgment.

(m)  Payment to Originators . With respect to any Receivable purchased by Seller from Ferro, such purchase shall be effected under, and in strict compliance with the terms of, the Purchase and Contribution Agreement, including, without limitation, the terms relating to the amount and timing of payments to be made to Ferro in respect of the purchase price for such Receivable.

Section 7.2 Negative Covenants of the Seller Parties . Until the date on which the Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance with its terms:

(a)  Name Change, Offices and Records . Seller will not change its name, identity or legal structure (within the meaning of Section 9-507(c) of any applicable enactment of the UCC) or relocate its chief executive office or any office where Records are kept unless it shall have: (i) given the Agent and each Purchaser at least forty-five (45) days’ prior written notice thereof and (ii) delivered to the Agent all financing statements, instruments and other documents reasonably requested by the Agent or any Purchaser in connection with such change or relocation.

(b)  Change in Payment Instructions to Obligors . Except as may be required by the Agent pursuant to Section 8.2(b) , such Seller Party will not add or terminate any bank as a Lock-Box Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box or Lock-Box Account, unless the Agent and the Purchasers shall have received, at least ten (10) days before the proposed effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Lock-Box Bank or a Lock-Box Account or Lock-Box, an executed Lock-Box Agreement with respect to the new Lock-Box Account or Lock-Box; provided, however, that the Collection Agent may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Lock-Box Account.

(c)  Modifications to Contracts and Credit and Collection Policy . No Seller Party will, and no Seller Party will permit any Originator to, make any change to the Credit and Collection Policy that could reasonably be expected to decrease the credit quality of any newly created Receivables or materially adversely affect the collectibility of the Receivables. Except as provided in Section 8.2(d) , no Seller Party will, or will permit any Originator to, extend, amend or otherwise modify the terms of any Receivable or any terms of any Contract related to such Receivable in any material respect other than in accordance with the Credit and Collection Policy.

(d)  Sales, Liens . Other than the ownership and security interests contemplated by the Transaction Documents, Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Receivable, Related Security or Collections, or upon or with respect to any Contract under which any Receivable arises, or any Lock-Box or Lock-Box Account, or assign any right to receive income with respect thereto (other than, in each case, the creation of the interests therein in favor of the Agent and the Purchasers provided for herein), and Seller will defend the right, title and interest of the Agent and the Purchasers in, to and under any of the foregoing property, against all claims of third parties claiming through or under Seller or any Originator.

(e)  Termination of Purchase Agreement or Purchase and Sale Agreement . Seller will not terminate the Purchase Agreement or the Purchase and Contribution Agreement or send any written notice to any Originator in respect thereof, without the prior written consent of the Agent and the Purchasers.

(f)  Restricted Junior Payments . From and after the occurrence of any Amortization Event, Seller will not make any Restricted Junior Payment if, after giving effect thereto, Seller would fail to meet its obligations set forth in Section 7.1(i) .

(g)  Seller Indebtedness . Except as contemplated by the Transaction Documents, Seller will not incur or permit to exist any Indebtedness or liability on account of deposits except: (i) the Obligations, (ii) the Deferred Purchase Price, and (iii) other current accounts payable arising in the ordinary course of business and not overdue.

(h)  Prohibition on Additional Negative Pledges . Seller will not (and will not authorize any Originator to) enter into or assume any agreement (other than this Agreement and the other Transaction Documents) prohibiting the creation or assumption of any Adverse Claim upon the Receivables, Collections or Related Security except as contemplated by the Transaction Documents, or otherwise prohibiting or restricting any transaction contemplated hereby or by the other Transaction Documents. Seller will not (and will not authorize any Originator to) enter into or assume any agreement creating any Adverse Claim upon any note evidencing Deferred Purchase Price payable by Seller.

ARTICLE VIII.

ADMINISTRATION AND COLLECTION

Section 8.1 Designation of Collection Agent .

(a) The servicing, administration and collection of the Receivables shall be conducted by such Person (the “Collection Agent” ) so designated from time to time in accordance with this Section 8.1 . Ferro is hereby designated as, and hereby agrees to perform the duties and obligations of, the Collection Agent pursuant to the terms of this Agreement. At any time after the occurrence of an Amortization Event, the Agent and the Purchasers may at any time designate as Collection Agent any Person to succeed Ferro or any successor Collection Agent.

(b) Ferro may delegate to the other Originators, as sub-Collection Agents of the Collection Agent, certain of its duties and responsibilities as Collection Agent hereunder in respect of the Receivables originated by such Originators. Without the prior written consent of the Purchasers, the Collection Agent shall not be permitted to delegate any of its duties or responsibilities as Collection Agent to any Person other than (i) the other Originators, and (ii) with respect to certain Charged-Off Receivables, outside collection agencies in accordance with its customary practices. Seller shall not be permitted to further delegate to any other Person any of the duties or responsibilities of Collection Agent delegated to it by Ferro. If at any time following the occurrence of an Amortization Event, the Purchasers shall designate as Collection Agent any Person other than Ferro, all duties and responsibilities theretofore delegated by Ferro to Seller or any Originator may, at the discretion of any of the Agent, be terminated forthwith on notice given by the Agent or any Purchaser to the Agent or the other Purchaser, as applicable, Ferro and to Seller.

(c) Notwithstanding the foregoing subsection (b), (i) Collection Agent shall be and remain primarily liable to the Agent and the Purchasers for the full and prompt performance of all duties and responsibilities of the Collection Agent hereunder and (ii) the Agent and the Purchasers shall be entitled to deal exclusively with Collection Agent in matters relating to the discharge by the Collection Agent of its duties and responsibilities hereunder. The Agent and the Purchasers shall not be required to give notice, demand or other communication to any Person other than Collection Agent in order for communication to the Collection Agent and its sub-Collection Agent or other delegate with respect thereto to be accomplished. Collection Agent, at all times that it is the Collection Agent, shall be responsible for providing any sub-Collection Agent or other delegate of the Collection Agent with any notice given to the Collection Agent under this Agreement.

Section 8.2 Duties of Collection Agent .

(a) The Collection Agent shall take or cause to be taken all such actions as may be necessary or advisable to collect each Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy.

(b) The Collection Agent will instruct all Obligors to pay all Collections directly to a Lock-Box or Lock-Box Account and will instruct each Lock-Box Bank to initiate a wire transfer of all available funds in each Lock-Box Account to the Wachovia Account not later than 4:00 p.m. (New York City time) each Business Day. The Collection Agent shall effect a Lock-Box Agreement substantially in the form of Exhibit VI with each Lock-Box Bank. In the case of any remittances received in any Lock-Box or Lock-Box Account that shall have been identified, to the satisfaction of the Collection Agent, to not constitute Collections or other proceeds of the Receivables or the Related Security, the Collection Agent shall promptly remit such items to the Person identified to it as being the owner of such remittances.

(c) The Collection Agent shall administer the Collections in accordance with the procedures described herein and in Article II. The Collection Agent shall set aside and hold in trust for the account of Seller and the Purchasers their respective shares of the Collections (or such funds or other assets arising therefrom) in accordance with Article II. The Collection Agent shall segregate, in a manner acceptable to the Agent and the Purchasers, all cash, checks and other instruments received by it from time to time constituting Collections from the general funds of the Collection Agent or Seller prior to the remittance thereof in accordance with Article II. The Collection Agent shall segregate and deposit with a bank designated by the Agent all Collections of Receivables on the Business Day received by the Collection Agent, duly endorsed or with duly executed instruments of transfer.

(d) The Collection Agent may, in accordance with the Credit and Collection Policy, extend the maturity of any Receivable or adjust the Outstanding Balance of any Receivable as the Collection Agent determines to be appropriate to maximize Collections thereof; provided, however, that such extension or adjustment shall not alter the status of such Receivable as a Delinquent Receivable, Defaulted Receivable or Charged-Off Receivable or limit the rights of the Agent or the Purchasers under this Agreement. Notwithstanding anything to the contrary contained herein, following the occurrence and during continuation of an Amortization Event, the Agent shall have the absolute and unlimited right to direct the Collection Agent to commence or settle any legal action with respect to any Receivable or to foreclose upon or repossess any Related Security.

(e) The Collection Agent shall hold in trust for Seller and the Purchasers all Records that (i) evidence or relate to the Receivables, the related Contracts and Related Security or (ii) are otherwise necessary or desirable to collect the Receivables and shall, as soon as practicable upon demand of the Agent, deliver or make available to the Agent all such Records, at a place selected by the Agent. The Collection Agent shall, as soon as practicable following receipt thereof turn over to Seller any cash collections or other cash proceeds payable to Seller not constituting Collections on Receivables. The Collection Agent shall, from time to time at the request of any Purchaser, furnish to the Purchasers (promptly after any such request) a calculation of the amounts set aside for the Purchasers pursuant to Article II.

(f) Any payment by an Obligor in respect of any indebtedness owed by it to an Originator or Seller shall, except as otherwise specified by such Obligor or otherwise required by Contract or law and unless otherwise instructed by the Agent, be applied as a Collection of any Receivable of such Obligor (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other obligation of such Obligor.

Section 8.3 Lock-Box Accounts . Seller hereby transfers to the Agent for the benefit of the Purchasers the exclusive ownership and control of each Lock-Box and Lock-Box Account. Seller hereby authorizes the Agent, and agrees that the Agent shall be entitled after the occurrence of an Amortization Event to (a) endorse Seller’s name on checks and other instruments representing Collections, (b) enforce the Receivables, the related Contracts and the Related Security and (c) take such action as shall be necessary or desirable to cause all cash, checks and other instruments constituting Collections of Receivables to come into the possession of the Agent rather than Seller.

Section 8.4 Responsibilities of Seller . Anything herein to the contrary notwithstanding, the exercise by the Agent and the Purchasers of their rights hereunder shall not release the Collection Agent, any Originator or Seller from any of their duties or obligations with respect to any Receivables or under the related Contracts. The Purchasers shall have no obligation or liability with respect to any Receivables or related Contracts, nor shall any of them be obligated to perform the obligations of Seller.

Section 8.5 Reports .

(a) On each Business Day (other than a Permitted Ferro Holiday), the Collection Agent shall prepare and deliver not later than 11:00 a.m. (New York City time) to the Agent and the Purchasers a Daily Report for the immediately preceding Business Day in the form of Exhibit X hereto (appropriately completed and executed).

(b) On each Monthly Reporting Date, the Collection Agent shall prepare and deliver not later than 11:00 a.m. (New York City time) to the Agent and the Purchasers, a Monthly Report for the calendar month then most recently ended in the form of Exhibit IX hereto (appropriately completed and executed).

(c) At such times as the Agent or any Purchaser shall reasonably request, the Collection Agent shall prepare and deliver not later than 11:00 a.m. (New York City time) to the Agent and the Purchasers a listing by Obligor of all Receivables together with an aging of such Receivables.

(d) At the request of Agent or at anytime the Collection Agent (or the Seller) becomes aware or has reason to believe that the information contained in any Daily Report or Monthly Report is inaccurate in any material respect with respect to the inclusion of Receivables in the Net Pool Balance reflected in any such report which are not or no longer Eligible Receivables (each case, an “ Interim Report Event ”), the Collection Agent shall promptly (but in any event no later than 11:00 a.m. (New York City time) one (1) Business Day after the occurrence of any Interim Report Event) provide an updated interim report substantially in the form of the Monthly Report but dated on or about the date of the occurrence of such Interim Report Event which updates the information normally contained in the Monthly Report (including without limitation, updated computations of Eligible Receivables included in the Net Pool Balance (an “ Interim Report ”). The information contained in any such Interim Report will be utilized by the Collection Agent and the Seller in the preparation of all Daily Reports issued on or after the date of such Interim Report until delivery of the next Monthly Report or Interim Report.

Section 8.6 Servicing Fees . In consideration of Ferro’s agreement to act as Collection Agent hereunder, the Purchasers hereby agree that, so long as Ferro shall continue to perform as Collection Agent hereunder, Seller shall pay over to Ferro a fee (the “Servicing Fee” ) on the first calendar day of each month, in arrears for the immediately preceding month, equal to 0.5% per annum of the average aggregate Outstanding Balance of all Receivables during such period, as compensation for its servicing activities.

ARTICLE IX.

AMORTIZATION EVENTS

Section 9.1 Amortization Events . The occurrence of any one or more of the following events shall constitute an “Amortization Event”:

(a) Any Seller Party shall fail to make any payment or deposit required to be paid to a Purchaser, Agent or Indemnified Party under this Agreement or any other Transaction Document to which it is a party on the date when the same is required to be made, and such failure shall continue unremedied for one (1) Business Day.

(b) Any Seller Party shall fail to perform or observe any covenant contained in any provision of (i) Section 2.2 , (ii) Section 7.2 or (iii) Section 8.5 and, (A) with respect to a failure to perform or observe the covenant in Section 8.5(a) , such failure continues for a period of one (1) Business Day; provided further that such one (1) Business Day grace period shall only be available and effective twice during any calendar quarter period, and (B) with respect to failure to perform or observe the covenant in Section 8.5(b) there shall be no grace period.

(c) Any Seller Party shall fail to perform or observe any other covenant, agreement or other obligation hereunder (other than as referred to in another paragraph of this Section 9.1 ) or any other Transaction Document to which it is a party and such failure shall continue for three (3) consecutive Business Days following the earlier to occur of (i) notice from the Agent or any Purchaser of such non-performance or non-observance, or (ii) the date on which an Authorized Officer of such Seller Party otherwise becomes aware of such non-performance or non-observance.

(d) Any representation, warranty, certification or statement made by any Seller Party in this Agreement, any other Transaction Document or in any other document required to be delivered pursuant hereto or thereto shall prove to have been incorrect when made or deemed made in any material respect; provided that the materiality threshold in this subsection shall not be applicable with respect to any representation or warranty which itself contains a materiality threshold.

(e) Ferro shall fail to observe any covenant contained in Section 7.2.4 of the Senior Credit Agreement (or any financial covenant in any replacement Senior Credit Agreement) unless such breach is waived by the applicable lenders thereunder prior to date on which such covenant is to be measured.

(f) (i) Seller shall fail to pay any principal of or premium or interest on any of its Indebtedness which is outstanding when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity of such Indebtedness; or any such Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased, or an offer to repay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof; or

(ii) any Originator shall fail to pay any principal of or premium or interest on any of its Material Indebtedness which is outstanding when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Material Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Material Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, the maturity of such Material Indebtedness; or any such Material Indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased, or an offer to repay, redeem, purchase or defease such Material Indebtedness shall be required to be made, in each case prior to the stated maturity thereof.

(g) (i) Seller, any Originator or any Material Subsidiary shall generally not pay its debts as such debts become due or shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors; or

(ii) any proceeding shall be instituted by or against Seller seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property, or

(iii) any proceeding shall be instituted by or against any Originator or any Material Subsidiary seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property, provided that, unless such proceeding is consented to or acquiesced in by such Originator or Material Subsidiary in the case of any such proceeding instituted against (but not instituted by) it, either such proceeding shall remain undismissed or unstayed for a period of 30 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur, or

(iv) Seller, any Originator or any Material Subsidiary shall take any corporate action to authorize any of the actions set forth in clauses (i), (ii) or (iii) above in this subsection (g).

(h) As at the end of any calendar month:

(i) the average of the Delinquency Ratios for the three months then most recently ended shall exceed 5.0%;

(ii) the average of the Default Ratios for the three months then most recently ended shall exceed 4.5%; or

(iii) the average of the Dilution Ratios for the three months then most recently ended shall exceed 7.0%.

(i) A Change of Control shall occur other than, in the case of any Originator which is a Subsidiary of Ferro, as a result of the liquidation, dissolution, consolidation or merger permitted by Section 5.04 of the Purchase Agreement.

(j) (i) One or more final judgments for the payment of money in an amount in excess of $12,000, individually or in the aggregate, shall be entered against Seller or (ii) one or more final judgments for the payment of money in an amount in excess of $7,500,000, individually or in the aggregate, shall be entered against any Originator on claims not covered by insurance or as to which the insurance carrier has denied its responsibility, and such judgment shall continue unsatisfied and in effect for thirty (30) consecutive days without a stay of execution.

(k) The Purchase Agreement or the Purchase and Contribution Agreement shall be terminated, or any Originator shall for any reason cease to transfer, or cease to have the legal capacity to transfer, or otherwise be incapable of selling Receivables to Seller under the Purchase Agreement or the Purchase and Contribution Agreement, as applicable.

(l) This Agreement shall terminate in whole or in part (except in accordance with its terms), or shall cease to be effective or to be the legally valid, binding and enforceable obligation of Seller, or any Originator shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability, or the Agent for the benefit of the Purchasers shall cease to have a valid and perfected first priority security interest in the Receivables, the Related Security and the Collections with respect thereto and the Lock-Box Accounts.

(m) On any Settlement Date, after giving effect to the turnover and application of Collections, the Aggregate Capital shall exceed the Purchase Limit.

(n) The Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the Tax Code with respect to amounts in excess of $50,000 with regard to any of the Receivables or Related Security and such lien shall not have been released within seven (7) days.

(o) The PBGC shall file notice of a lien pursuant to Section 4068 of ERISA with respect to amounts in excess of $50,000 with regard to any of the Receivables or Related Security and such lien shall not have been released within seven (7) days; or any of the following events shall occur with respect to any Pension Plan: (i) the institution of any steps by Ferro, any member of its Controlled Group or any other Person to terminate a Pension Plan if, as a result of such termination, Ferro or any such member could be required to make a contribution to such Pension Plan, or could reasonably expect to incur a liability or obligation to such Pension Plan, in excess of $7,500,000; of (ii) a contribution failure occurs with res