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                                                             Exhibit 10.6(c)(ii)

                          AGREEMENT AND GENERAL RELEASE

         On this 15 day of December, 2000, Applied Graphics Technologies, Inc.
("AGT" or the "Company") and Derek Ashley ("Employee"), agreed on terms and
conditions as set forth below:

         1. (a) Employee resigned as Chief Executive Officer, Chief Operating
Officer, Vice Chairman, and as a member of the Company's Board of Directors and
as an officer and director of the Company's subsidiaries effective November 30,
2000. Notwithstanding the foregoing, in order to assist in a transition Employee
will continue to be employed by the Company through January 12, 2001. During
this transition period, Employee will make himself available to perform whatever
duties are reasonably requested by the Board of Directors or the Chief Operating
Officer. Employee's employment with the Company will terminate effective January
12, 2001 (the "Termination Date").


            (b) Employee will continue to receive his current salary and
benefits through the Termination Date.

            (c) Provided that Employee elects continued medical coverage after
the Termination Date under the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"), for a period up to a maximum of eighteen (18)
months, the Company will contribute to the cost of such continued coverage at
the same rate and under the same terms and conditions as are applicable to a
similarly situated active employee of the Company. The group health benefits
contributions by the Company will automatically terminate when the Employee (or
the Employee's eligible dependents if such coverage is elected) is covered by a
group health plan of a subsequent employer. However, in such event, such
coverage may continue at the Employee's own expense in accordance with and
subject to the limitations and requirements of COBRA.

            (d) The Company will continue to pay the rent for the apartment
located at One West Superior Street, Chicago, Illinois through January 31, 2001.

            (e) Employee will be permitted to utilize the Company's apartment
located at 33 Britton Street, London, England through April 12, 2001.

            (f) The Company will reimburse the Employee for the reasonable cost
of shipping his belongings from Chicago to London.

            (g) The Company will reimburse Employee for the cost of two
round-trip airplane tickets between the United States and London of the same
class which Employee customarily flies on Company business.
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            (h) The Company will pay for Arthur Andersen to prepare the
Employee's United Kingdom and United States tax returns for calendar year 2000.

            (i) The Company will use its best efforts to transfer to the
Employee his United Kingdom cellular phone including cellular telephone number
011-44-773-007-7777. Employee will be responsible for the payment of all
invoices related to telephone calls made after January 12, 2001.

            (j) Company will continue to permit the Employee to utilize the
Jaguar, registration number T351APP which he is currently utilizing until the
lease expires in May 2002. To the extent the lease permits the lessee to
purchase said vehicle when the lease expires, the Company will allow Employee
the right to acquire said vehicle at the option price.

            (k) The Employee will be permitted to retain the Company-owned
laptop computer which he currently utilizes or, to the extent said computer
contains confidential Company information which can not effectively be deleted,
the Company may provide Employee with a comparable laptop computer in lieu of
said computer.

            (l) To the extent legally permissible, the Company will continue to
use its reasonable efforts to support Employee's green-card application in the
United States.

            (m) Employee shall not be entitled to any other payments or
benefits, except for any rights he may have pursuant to the Stock Option
Agreements described in Paragraph 4 herein.

            (n) The Company will include Employee's pay through the Termination
Date in the December 29, 2000 payment cycle for payroll.

         2. In exchange for the consideration provided for by this Agreement and
General Release, including without prejudice the consideration provided for by
Paragraph 1 above, which Employee acknowledges exceeds that to which he would be
entitled under any applicable Company plan, policy, or practice:

            (a) Employee, for himself and for his heirs, executors,
administrators, and assigns (hereinafter referred to collectively as
"Releasor"), forever releases and discharges the Company and any and all of its
respective parent corporations, partners, subsidiaries, divisions, affiliated
entities, successors and assigns, and any and all of their past and/or present
officers, directors, partners, agents and employees (hereinafter referred to
collectively as the "Releasees"), from any and all claims, demands, charges,
complaints, causes of actions, obligations, promises, agreements, debts,
expenses, fees and liabilities of any kind whatsoever, whether known or unknown,
foreseen or unforeseen, which Releasor ever had or now has against Releasees by
reason of any actual or alleged act, omission, transaction, agreement, practice,
policy, conduct, occurrence, or other matter from the beginning of the world up
<PAGE>   3
to and including the date of this Agreement and General Release, including, but
not limited to: (i) any claim under the Age Discrimination in Employment Act, as
amended; (ii) any claim under Title VII of the Civil Rights Act of 1964, as
amended, the New York State Human Rights Law, as amended, the New York City
Human Rights Law, as amended, and the Illinois Human Rights Act, as amended;
(iii) any claim under the Employee Retirement Income Security Act of 1974, as
amended; (iv) any other claim of discrimination in employment (whether based on
federal, state or local law, statute, rule, regulation or common law); (v) any
claim arising out of Employee's employment with the Company, the terms and
conditions of Employee's employment with the Company, the termination of such
employment, and/or any of the events relating directly or indirectly to or
surrounding that termination; (vi) any claim for severance pay under any
purported severance pay policy, or any claim for other benefits; (vii) any claim
under the Employment Agreement between the Employee and the Company dated May
24, 1999 (the "Employment Agreement"); (viii) any purported oral agreement
relating to Employee's employment; and (ix) any claim for attorney's fees,
costs, disbursements and/or the like.


                  (b) Employee represents, warrants and covenants that he has
not and will not, in any way, disparage, discredit, defame or belittle the
Company, its employees or products, officers or affiliates or any of their
respective parent corporations, partners, subsidiaries, divisions, affiliated
entities, successors and assigns, and any and all of their past and/or present
officers, directors, partners, agents and employees.


         3. Employee will continue to be bound by the Noncompetition,
Nonsolicitation and Confidentiality Agreement annexed as Exhibit A to the
Employment Agreement, a copy of which is annexed hereto as Exhibit 1. For
purposes of said Noncompetition, Nonsolicitation and Confidentiality Agreement,
Employee's termination will be considered to be a resignation and not a
termination pursuant to Paragraph 7(b) of the Employment Agreement

         4. The Stock Option Agreements relating to the Non-Qualified Stock
Option with a Date of Grant of May 8, 2000 and the Non-Qualified Stock Option
with a Date of Grant of May 24, 1999 will continue in full force and effect.
Pursuant to Paragraph 7(b) of said Stock Option Agreements, all non-vested
Options shall immediately be forfeited as of the Termination Date and all vested
Options held by the Employee on the Termination Date shall remain exercisable
until the end of the ninety (90) day period following the Termination Date.
<PAGE>   4
         5. The Company forever releases and discharges the Employee and his
heirs, executors and administrators from any and all claims, demands, charges,
complaints, causes of actions, obligations, promises, agreements, debts,
expenses, fees and liabilities of any kind whatsoever, whether known or unknown,
foreseen or unforeseen, which the Company ever had or now has against the
Employee by reason of any actual or alleged act, omission, transaction,
agreement, practice, policy, conduct, occurrence, or other matter from the
beginning of the world up to and including the date of this Agreement and
General Release; provided, however, that this release of the Employee by the
Company shall not apply to any claims arising as a result of any unlawful or
fraudulent conduct by the Employee.

         6. Employee represents and warrants that he has not commenced,
maintained, prosecuted or participated in any action, suit, charge, complaint or
proceeding of any kind against Releasees that is pending in any court or before
any administrative or investigative body or agency. To the extent permitted by
applicable law, Employee covenants that he shall not at any time hereafter
commence, maintain, prosecute, participate in, or permit to be filed by any
other person on his behalf, any action, suit, charge, complaint or proceeding of
any kind (other than filing for unemployment) against Releasees with respect to
any act, omission, transaction or occurrence up to and including the date of the
execution of this Agreement and General Release.

         7. Employee acknowledges and agrees that any breach by him of the
representations, warranties, covenants or agreements set forth herein, including
but not limited to Paragraphs 2, 3, or 6 or will cause irreparable harm to the
Company. Accordingly, in the event of any such breach, or anticipated breach,
the Company shall be entitled to injunctive relief.

         8. If any part, term, or provision of this Agreement and General
Release is declared by any court of competent jurisdiction in a final,
non-appealable judgment to be illegal, void, unenforceable or invalid, such
provision shall have no effect upon, and shall not impair the legality,
enforceability or validity of, any other provision of this Agreement and General
Release; provided, however, that, upon any finding by such court of competent
jurisdiction that a release or waiver of claims or rights, or a covenant
provided for by Paragraphs 2, 3, or 6 above, is illegal, void, unenforceable or
invalid, Employee agrees to execute a release, waiver and/or covenant that is
legal, valid and enforceable to the maximum extent permitted by applicable law.


         9. This Agreement and General Release constitutes the complete
understanding between the parties and may not be changed orally. Employee
acknowledges that no representative of the Company has made any representation
or promise to him concerning the terms and conditions of this Agreement and
General Release or the termination of his employment with the Company other than
those expressly set forth in this Agreement and General Release. It is
understood and agreed that the Employment Agreement is null and void and of no
further force and effect. It is understood and agreed that this will not be
considered to be a "termination" of the Employment Agreement within the meaning
of Paragraph 7(b) therein. Notwithstanding the foregoing, the Noncompetition,
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Nonsolicitation and Confidentiality Agreement attached as Exhibit A to the
Employment Agreement, and Exhibit 1 hereto, will continue in full force and
effect.

         10. Employee hereby acknowledges and represents that: (i) the Company
has advised him that he should consult with independent legal counsel before
executing this Agreement and General Release; and (ii) Employee has carefully
read this Agreement and General Release in its entirety, has discussed it or had
reasonable opportunity to discuss it with any advisor of his choice, fully
understands it, voluntarily assents to all of its terms and conditions and is
signing it of his own free will.

         11. This Agreement and General Release shall be governed by, and
construed and enforced in accordance with the laws of the State of New York.


                                          APPLIED GRAPHICS TECHNOLOGIES, INC.


                                          By:
-----------------------------                --------------------------------
   Derek Ashley

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                                    EXHIBIT A

                         Noncompetition, Nonsolicitation
                          and Confidentiality Agreement



In consideration for the agreement of Applied Graphics Technologies, Inc.,
("AGT") to employ Derek Ashley ("Employee") as Vice Chairman and COO, (the
"Employment Agreement") Employee hereby agrees as follows:

         1. In this Agreement, the term AGT includes Applied Graphics
Technologies, Inc., as well as all of its parents, subsidiaries and affiliates.

         2. Employee acknowledges that he will be furnished, or may otherwise
receive or have access to, private information which relates to AGT's past,
present or anticipated customer lists or other compilations for marketing or
development, or which relates to administrative, management, financial,
marketing, sales or manufacturing activities of AGT and that such information is
not easily accessible from public sources. All such information, including any
materials or documents containing such information, shall be considered by AGT
and Employee as proprietary and confidential ("Proprietary Information").

         3. Both during and forever after the term of the Employment Agreement,
Employee agrees to preserve and protect the confidentiality of the Proprietary
Information and all physical forms thereof, whether disclosed to him before this
Agreement is signed or afterward. In addition, Employee shall not (i) disclose
or disseminate the Proprietary Information to any third party, including
employees of AGT, without a need to know, (ii) remove Proprietary Information
from AGT's premises without valid business purpose, or (iii) use Proprietary
Information for his own benefit or for the benefit of any third party.

         4. Employee acknowledges and agrees that all Proprietary Information
used or generated during the course of working for AGT is the property of AGT.
Employee agrees to deliver to AGT all documents and other tangibles (including
diskettes and other storage media) containing Proprietary Information, including
all copies of such documents or tangibles, immediately upon notice of the
termination of his employment with AGT.

         5. While working for AGT and for one year following termination of his
employment from AGT for any reason, Employee will not attempt, either directly
or indirectly, to solicit, induce, entice or attempt to influence any employee
of AGT to leave AGT's employ or directly or indirectly hire or cause any other
entity to hire any person who has been an AGT employee in the 12 months
preceding the contact.

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6.       Noncompetition

         a. Employee acknowledges that his agreement to forego competition with
AGT was a material inducement to AGT to employ him. Employee also acknowledges
that he will acquire much Proprietary Information concerning AGT's financial
status, current and future marketing and advertising strategies, pricing, and
other confidential information as the result of his employment and that such
information is not easily accessible from other sources. Employee further
acknowledges that the businesses in which AGT engages, including but not limited
to pre-press and digital archiving are very competitive; that competition by him
in those businesses during his employment, or after his employment terminates,
would severely injure AGT; and that his agreements herein are demonstrably
necessary to protect those legitimate interests.

         b. During the term of his employment with AGT, Employee (i) will devote
all his professional and business time and effort to and give undivided loyalty
to AGT and (ii) will not engage in any way whatsoever, directly or indirectly,
in any business that is competitive with AGT, nor directly or indirectly solicit
or in any other manner work for or assist any business which is competitive with
AGT.

         c. The "Restricted Period" shall mean the period beginning on the
Commencement Date of the Employment Agreement and ending on the later of the
second anniversary thereof or six months after Employee's employment is
terminated. Notwithstanding the foregoing, the Restricted Period shall terminate
immediately if the Employee's employment is terminated pursuant to Paragraph
7(b) of the Employment Agreement. During the Restricted Period, Employee shall
not, whether alone or in association with any other person, directly or
indirectly (i) engage in any business in the Specified Areas that is competitive
with any aspect of the business that is being conducted or planned by AGT at the
time Employee's employment with AGT terminates; or (ii) have any interest or
association (including, without limitation, as a shareholder, partner, director,
officer, employee, consultant, sales representative, supplier, distributor,
agent or lender) in or with any person engaged in a business in the Specified
Areas that Employee is prohibited from engaging in pursuant to clause (i) above;
provided however, that the foregoing shall not prohibit Employee from owning
securities of any publicly traded company that is engaged in any such business
as long as Employee does not own at any time 5% or more of any class of the
equity securities of such company.

For purposes of the foregoing, the "Specified Areas" means each state or country
in which AGT makes any sales or performs any services during the 12 month period
preceding the date on which Employee's employment with AGT terminates.
<PAGE>   8

         d. If any provision of this Agreement is determined by a court to be
overly broad thereby making the provision unenforceable, Employee agrees that
such court shall substitute a reasonable, judicially enforceable limitation in
place of the invalid part of the provision and that as so modified the provision
shall be as fully enforceable as if set forth herein in the modified form. If it
is not possible to restate the provision in a valid or legal manner, then that
invalid or illegal portion shall be deemed not a part of the Agreement and the
remaining provisions shall remain in full force and effect.

     7. Employee acknowledges and agrees that:

            a. (i) his contractual obligations under paragraphs 3, 4, 5, and 6
hereof have a unique and very substantial value to AGT, (ii) he has sufficient
assets and other skills to provide a reasonable livelihood for himself while
such paragraphs are in force, and (iii) he is subject to immediate dismissal by
AGT for any breach of those provisions and that such dismissal shall not relieve
him from his continuing obligations under this Agreement or from the imposition
by a court of any judicial remedies, such as money damages or equitable
enforcement of those provisions.

            b. the terms and provisions of this Agreement are applicable to all
information and materials developed for, received from or any advice provided
to, AGT prior to or after the signing of this Agreement; and

            c. the termination of his employment with AGT for any reason, shall
not relieve him from complying with the undertakings and agreements contained
herein, which call for performance prior or subsequent to the termination date,
including, but not limited to those undertakings and agreements set forth in
paragraphs 3, 4, 5 and 6 hereof.

            d. in the event of his breach of any of the undertakings or
agreements set forth in paragraphs 3, 4, 5, and 6 of this Agreement, AGT shall
have the right to obtain an injunction or decree of specific performance from
any court of competent jurisdiction to restrain him from violating such
undertakings or agreements or to compel him to perform such undertakings or
agreements. Nothing herein contained shall in any way limit or exclude any and
all other rights granted by law or equity to AGT.

     8. No act or failure to act by AGT will waive any right contained herein.
Any waiver by AGT must be in writing and signed by the Chairman of AGT to be
effective.
<PAGE>   9




     9. In the event that any provision of this Agreement conflicts with the law
under which this Agreement is to be construed or if any such provision is held
invalid by a court or other authority with jurisdiction over the parties to this
Agreement, such provision shall be deemed to be restated to reflect as nearly as
possible the original intentions of the parties in accordance with applicable
law, and the remainder of this Agreement shall remain in full force and effect.
If it is not possible to restate the provision in a valid or legal manner, then
that invalid or illegal portion shall be deemed not a part of the Agreement and
the remaining provisions shall remain in full force and effect.

     10. This Agreement shall be construed according to its terms and not
strictly for or against either party.

     11. This Agreement shall be governed by the laws of the State of New York
without regard to its conflicts of laws provisions.

     12. All remedies provided herein are cumulative and in addition to all
other remedies which may be available at law or in equity.

     13. This Agreement shall be binding on both parties successors, heirs and
assigns.



Employee:                                   Applied Graphics Technologies, Inc.:



/s/ Derek Ashley                            /s/ Marty Krall
-------------------------                   -----------------------------------
Derek Ashley                                By:
                                                -------------------------------
                                            Title:
                                                -------------------------------



 24/5/99                                        5/24/99
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Date                                            Date