Just went into Rapax Castle and met Ferro. Traded with him and was attacked by many Rapax.
It appears they killed Ferro. I really need him to trade with. Does the game allow him to be killed by his own kind???

Ferro dying is a frequent and regrettable occurrence. It is possible to finish without him; however, he sells and makes many great items.

I recommend that you reload from before he got killed. Wipe out all Rapax in his neighborhood before entering his room, preferably without fighting near his door in the course of wiping them out.

as soon as you enter the rapax castle, i suggest that you make the a run for the first left and up a ramp then talk to one of the gaurds there. spoiler...

this will get you started on becoming a templar after which all rapax will be friendly to you.

I suggest protedting Ferro first. Then go up the ramp and become a Templar which stops the battles.