TERMINATION OF SECURITY AGREEMENT


     THIS  AGREEMENT is made and entered  into as of  September 4, 1997,  by and
among County of  Chautauqua  Industrial  Development  Agency,  a public  benefit
corporation  of the State of New York having an address at 200 Harrison  Street,
Jamestown,  New York  14701  (the  "Agency");  Dunkirk  International  Glass and
Ceramics Corporation,  a Delaware corporation having an address at 181 Stegelske
Avenue, Dunkirk, New York 14048 (the "Company"); and United States Trust Company
of New York, as Trustee under the Indenture (hereinafter defined), a corporation
duly organized,  existing and authorized to execute trusts under the laws of the
State of New York with its principal office located at 114 West 47th Street, New
York,  New York 10036  (the  "Trustee").  All  capitalized  terms not  otherwise
defined  herein shall have the  meanings  ascribed to such terms in that certain
Security  Agreement,  dated as of March 1, 1995,  by and among the  Agency,  the
Company, and the Trustee (the "Security Agreement").

                                    RECITALS:
                                    ---------

     WHEREAS, pursuant to a certain Trust Indenture,  dated as of March 1, 1995,
between  the  Agency  and the  Trustee  (the  "Indenture"),  the  Agency  issued
$8,000,000   Solid  Waste  Disposal   Facility   Bonds,   Series  1995  (Dunkirk
International Glass and Ceramics Corporation Project) (the "Bonds"); and

     WHEREAS,  in  connection  with the  issuance  of the Bonds the Agency  did,
pursuant to the Security Agreement,  grant to the Trustee for the benefit of the
holders  from time to time of the Bonds,  a security  interest in and to certain
Collateral more particularly described in the Security Agreement; and

     WHEREAS,  the holders of the Bonds have allowed for the complete redemption
of the Bonds by the Company and in  connection  therewith the  Bondholders  have
instructed  the Agency and the Trustee to execute and  deliver  this  instrument
evidencing the termination of the Security Agreement.

     NOW THEREFORE,  in  consideration of the foregoing and the mutual covenants
herein contained, the parties hereto agree as follows:

     1.  Termination.  That the Security  Agreement is hereby  terminated in all
respects as of the effective  date of this  Agreement and shall be of no further
force or effect.

     2. Termination Statement Filings. In connection with the termination of the
Security  Agreement  and the  security  interest  of the  Trustee  in and to the
Collateral,  the Trustee will file or cause to be filed such Uniform  Commercial
Code Termination Statements (Forms UCC-3) as may be necessary to terminate as of
record any Uniform  Commercial  Code Financing  Statements  (Forms UCC-1) as the
same may have been amended,  originally  filed to perfect to Trustee's  security
interest in the Collateral.

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     3. Counterparts.  That this Agreement may be executed in counterparts, each
of which shall be an original and all of which shall  constitute but one and the
same instrument.

     IN WITNESS WHEREOF,  the parties have executed this Agreement as of the day
and year first above written.

                                  COUNTY OF CHAUTAUQUA
                                  INDUSTRIAL DEVELOPMENT
                                  AGENCY

                                  By:    /s/ Donald H. Burdick
                                         ---------------------
                                  Name:  Donald H. Burdick
                                  Title: Director


                                  DUNKIRK  INTERNATIONAL  GLASS AND  CERAMICS
                                  CORPORATION

                                  By:    /s/ William L. Amt
                                         ------------------
                                  Name:  William L. Amt
                                  Title: President


                                  UNITED STATES TRUST COMPANY OF NEW YORK

                                  By:    /s/ Kenneth J. Rothschild
                                         -------------------------
                                  Name:  Kenneth J. Rothschild
                                  Title: Assistant Vice President