AMENDMENT NO. 2 TO

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

AMENDMENT NO. 2 TO AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”) dated as of June 5, 2007, among Ferro Finance Corporation (the
“Seller”), CAFCO, LLC (the “Investor”), Citibank, N.A., as a Bank (in such
capacity, the “Bank”), Ferro Electronic Materials, Inc., as an originator, Ferro
Corporation, as an originator (together with Ferro Electronic Materials, Inc.,
the “Originators”) and as collection agent, and Citicorp North America, Inc., as
agent (in such capacity, the “Agent”).

PRELIMINARY STATEMENTS.

(1) The Originators, the Collection Agent, the Seller, the Investor, the Bank
and the Agent are parties to an Amended and Restated Receivables Purchase
Agreement dated as of June 29, 2006, as heretofore amended (the “Agreement”).
Capitalized terms not defined herein are used as defined in the Agreement.

(2) Prior to the date hereof, the Seller has requested that the Bank consent to
the extension of the Commitment Termination Date, as contemplated by the
definition of such term set forth in Section 1.01 of the Agreement.

(3) The parties hereto, pursuant to Section 10.01 of the Agreement, have agreed
to amend the Agreement as set forth herein, and the Bank has agreed to consent
to an extension of the Commitment Termination Date to the date set forth herein,
in each case subject to the terms and conditions described herein.

NOW, THEREFORE, the parties hereto hereby agree as follows:

SECTION 1. Amendments to Agreement. Upon effectiveness of this Amendment as
provided in Section 2 below:

(a) Clause (y) of the definition of “Assignee Rate” set forth in Section 1.01 of
the Agreement is amended by inserting the words “ ‘Revolving Loans’ which are”
prior to the words “ ‘LIBO Rate Loans’” therein.

(b) The definition of “Commitment Termination Date” in Section 1.01 of the
Agreement is amended by deleting the date “June 5, 2007” therein and replacing
it with the date “June 3, 2008”.

(c) The definition of “Credit Agreement” set forth in Section 1.01 of the
Agreement is amended and restated to read in its entirety as follows:

“Credit Agreement” means the Credit Agreement dated as of June 6, 2006, among
Ferro Corporation and certain of its designated subsidiaries from time to time
party thereto, as borrowers, various financial institutions and other persons
from time to time party thereto, as lenders, Credit Suisse, Cayman Islands
Branch, as term loan administrative agent, National City Bank, as the revolving
loan administrative agent and the collateral agent, and Keybank National
Association, as the documentation agent, and any credit facility replacing or
succeeding thereto, each as the same may be amended, restated, modified or
supplemented from time to time, provided, that, for the purposes of determining
whether an event of default under the Credit Agreement has occurred as described
in Section 7.01(o) hereof, no effect shall be given to any waiver of any breach
of any financial covenant contained in the Credit Agreement that has been
granted by the lenders party to the Credit Agreement.

(d) Clause (i) of the definition of “Eligible Receivable” set forth in
Section 1.01 of the Agreement is amended and restated to read in its entirety as
follows:

(i) the Obligor of which is a resident of the United States (including, without
limitation, Puerto Rico), Canada, an Approved OECD Country or an Other Approved
Jurisdiction, provided that (A) the aggregate Outstanding Balance of all
Eligible Receivables having Obligors which are residents of an Approved OECD
Country or an Other Approved Jurisdiction may not exceed an amount equal to two
times the aggregate of the Loss Reserves for all Receivable Interests at such
time, (B) the aggregate Outstanding Balance of all Eligible Receivables having
Obligors which are residents of an Other Approved Jurisdiction may not exceed an
amount equal to the aggregate of the Loss Reserves for all Receivable Interests
at such time, (C) the aggregate Outstanding Balance of all Eligible Receivables
having Obligors which are residents of Japan may not exceed $5,000,000,
(D) after August 3, 2007, no Receivable with respect to which the billing
address of the related Obligor as indicated in the related Contract or invoice
is in any State set forth in Schedule V (any such State, a “Subject State”)
which Receivable otherwise meets the requirements of this definition shall be an
Eligible Receivable unless the Originator of such Receivable shall have
submitted to and filed with and paid to the Subject State all items and amounts
necessary for such Originator to be duly qualified to do business in good
standing in the applicable Subject State, and (E) with respect to each country
which is an Other Approved Jurisdiction, the aggregate Outstanding Balance of
all Eligible Receivables having Obligors which are residents of such country may
not exceed (1) 5% of the then outstanding Capital of all Receivable Interests,
at any time that the sovereign long-term debt rating of such country is at least
A by S&P and at least A2 by Moody’s, and (2) 3.3% of the then outstanding
Capital of all Receivable Interests, at any time that the sovereign long-term
debt rating of such country is not at least A by S&P and at least A2 by Moody’s;

(e) Clause (iii) of the definition of “Eligible Receivable” set forth in
Section 1.01 of the Agreement is amended by deleting the percentage “10%”, and
replacing it with the percentage “15%”.

(f) Clause (v) of the definition of “Eligible Receivable” set forth in
Section 1.01 of the Agreement is amended by deleting each occurrence of the
number “30” therein, and inserting the number “60” in lieu thereof in each case.

(g) The definition of “Loss Percentage” set forth in Section 1.01 of the
Agreement is amended and restated to read in its entirety as follows:

“Loss Percentage” means, as of any date, (I) absent the existence of a Class 2
Special Event, the greatest of (i) the product of (A) two multiplied by (B) the
Loss Horizon Factor as of the last day of the most recently ended calendar month
multiplied by (C) the highest of the Loss Ratios for the twelve most recently
ended calendar months, (ii) four times the Normal Concentration Limit and
(iii) 13%, and (II) during the existence of a Class 2 Special Event, the
greatest of (i) the product of (A) 2.25 multiplied by (B) the Loss Horizon
Factor as of the last day of the most recently ended calendar month multiplied
by (C) the highest of the Loss Ratios for the twelve most recently ended
calendar months, (ii) five times the Normal Concentration Limit and (iii) 16.25%

(h) The definition of “Undertaking Agreement” set forth in Section 1.01 of the
Agreement is amended and restated to read in its entirety as follows:

“Undertaking Agreement” means the Undertaking Agreement dated as of
September 28, 2000 made by Ferro Corporation in favor of the Seller,
substantially in the form attached hereto as Annex E, as the same may be
amended, modified or restated from time to time.

(i) Section 1.01 of the Agreement is amended by inserting each of the following
defined terms in alphabetical order:

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

“Subject State” has the meaning specified in the definition of “Eligible
Receivable” set forth above.

(j) Section 4.01(f) of the Agreement is amended and restated to read in its
entirety as follows:

(f) There is no pending or, to Seller’s knowledge, threatened action,
investigation or proceeding affecting an Originator or any of its Subsidiaries
before any court, governmental agency or arbitrator which may materially
adversely affect the financial condition or operations of such Originator and
its consolidated Subsidiaries, when taken as a whole, or the ability of the
Seller or such Originator to perform their respective obligations under the
Transaction Documents, or which purports to affect the legality, validity or
enforceability of the Transaction Documents.

(k) Section 4.02(a) of the Agreement is amended and restated to read in its
entirety as follows:

(a) The Collection Agent is a corporation duly incorporated, validly existing
and in good standing under the laws of Ohio, 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 (other than the Subject States,
provided, that, the Collection Agent shall promptly obtain such qualification in
each of the Subject States, and in any event by December 31, 2007), unless the
failure to so qualify would not have a material adverse effect on (i) the
interests of the Investors hereunder, (ii) the collectibility of the Receivables
Pool, or (iii) the ability of the Collection Agent to perform its obligations
hereunder.

(l) Section 4.02(e) of the Agreement is amended by deleting each occurrence of
the date “December 31, 2004” therein, and inserting the date “December 31, 2006”
in lieu thereof in each case.

(m) Section 4.02(f) of the Agreement is amended and restated to read in its
entirety as follows:

(f) There is no pending or, to the knowledge of Collection Agent, threatened
action, investigation or proceeding affecting the Collection Agent or any of its
Subsidiaries before any court, governmental agency or arbitrator which may
materially adversely affect the financial condition or operations of the
Collection Agent and its consolidated Subsidiaries, when taken as a whole, or
the ability of the Collection Agent to perform its obligations under this
Agreement, or which purports to affect the legality, validity or enforceability
of this Agreement.

(n) Section 5.01(k) of the Agreement is amended by (i) renumbering subclause
(xvii) thereof as subclause (xx), and (ii) inserting the following new
subclauses (xvii), (xviii) and (xix) immediately following subclause
(xvi) thereof:

(xvii) as soon as available and in any event within 50 days after the end of the
first three quarters of each fiscal year of Ferro Corporation and within 90 days
after the end of each fiscal year of Ferro Corporation, a certificate of the
chief financial officer or the treasurer of Ferro Corporation to the effect
that, to the best of such officer’s knowledge, Ferro Corporation was in
compliance with the financial covenants contained in the Credit Agreement as of
the fiscal quarter or fiscal year ended for which such financial statements are
being provided pursuant to clause (ix) or (x) of this Section 5.01(k), as
applicable, and providing reasonable details of the calculations evidencing
Ferro Corporation’s compliance with the financial covenants contained in the
Credit Agreement;

(xviii) promptly, and in any event within five Business Days of such event,
written notice of the Seller or either Originator no longer being qualified to
do business, or in good standing, in any jurisdiction where the nature of its
business requires it to be so qualified;

(xix) promptly, and in any event within two Business Days of the reinstatement
of Ferro Corporation’s qualification to do business and good standing in any
Subject State, a certificate as to the good standing of Ferro Corporation from
the Secretary of State or other applicable official of such Subject State; and

(o) Section 7.01(o) of the Agreement is amended by inserting the following
parenthetical language immediately prior to the semi-colon at the end of such
Section 7.01(o):

(which, as of the date of this Agreement consist of the leverage ratio and the
fixed charge coverage ratio contained in Sections 7.2.4(a) and 7.2.4(b) of the
Credit Agreement)

(p) The schedules to the Agreement are amended by inserting a Schedule V
immediately following Schedule IV to the Agreement, in the form of Schedule V
attached to this Amendment.

SECTION 2. Effectiveness. This Amendment shall become effective at such time as:
(i) executed counterparts of this Amendment have been delivered by each party
hereto to the other parties hereto, (ii) an executed copy of an amendment to the
Originator Purchaser Agreement dated as of the date hereof, in form and
substance satisfactory to the Agent, has been delivered to the Agent, and
(iii) a letter agreement amending that certain Amended Fee Agreement, dated as
of June 6, 2006, between Seller and Agent, in form and substance satisfactory to
the Agent, shall have become effective.

SECTION 3. Representations and Warranties. Each of the Seller and the Collection
Agent makes each of the representations and warranties contained in
Sections 4.01 and 4.02, respectively, of the Agreement (after giving effect to
this Amendment), except to the extent that such representations and warranties
speak specifically to an earlier date, in which case the Seller or Collection
Agent, as applicable, represents and warrants that they shall have been true and
correct on such date, and for the purpose of making such representations and
warranties, (i) each reference in Section 4.01 to “the Transaction Documents”
shall include this Amendment and (ii) each reference in Section 4.02 to “this
Agreement” shall be deemed to be a reference to both the Agreement and this
Amendment.

SECTION 4. Confirmation of Agreement. Each reference in the Agreement to “this
Agreement” or “the Agreement” shall mean the Agreement as amended by this
Amendment, and as hereafter amended or restated. Except as herein expressly
amended, the Agreement is ratified and confirmed in all respects and shall
remain in full force and effect in accordance with its terms.

SECTION 5. Confirmation of Undertaking Agreement. Ferro Corporation confirms and
agrees that, notwithstanding the effectiveness of this Amendment, the
Undertaking Agreement heretofore executed and delivered by it is, and shall
continue to be, in full force and effect, and the Undertaking Agreement is
hereby ratified and confirmed.

SECTION 6. Costs and Expenses. The Seller agrees to pay on demand all reasonable
costs and expenses in connection with the preparation, execution, delivery and
administration of this Amendment and any other documents to be delivered
hereunder including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Agent and the Investors with respect thereto and
with respect to advising the Agent and the Investors as to the rights and
remedies of each under this Amendment, and all reasonable costs and expenses, if
any (including reasonable counsel fees and expenses), in connection with the
enforcement of this Amendment and any other documents to be delivered hereunder.

SECTION 7. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
facsimile shall be effective as delivery of a manually executed counterpart of
this Amendment.

SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF).

[Remainder of this page intentionally left blank]

1

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 
 
FERRO CORPORATION
By:
 
Name:
Title:
 
FERRO ELECTRONIC MATERIALS, INC.
By:
 
Name:
Title:
 
FERRO FINANCE CORPORATION
By:
 
Name:
Title:
 

2

 
 
CAFCO, LLC
By: Citicorp North America, Inc.,
as Attorney-in-Fact
By:
 
Name: Junette M. Earl
Title: Vice President
 
CITICORP NORTH AMERICA, INC., as Agent
By:
 
Name: Junette M. Earl
Title: Vice President
 
CITIBANK, N.A., as a Bank
By:
 
Name: Junette M. Earl
Title: Vice President
 

3