Exhibit 10.4(b)


                 THIRD AMENDMENT TO LOAN AND PURCHASE AGREEMENT


         This Third Amendment to Loan and Purchase Agreement ("Third Amendment")
is entered into as of this 30th day of June, 1997, by and among *

                                   *
                                   *
                                   *
                                   *

* , Applied Printing Technologies, L.P., a Delaware limited partnership with its
principal place of business at 563 Barell,  Carlstadt, New Jersey 07072 ("AGT"),
Applied Graphics  Technologies,  Inc., a Delaware corporation with its principal
place of business at 28 West 23rd Street,  New York, New York 10010 ("New AGT"),
Mortimer B. Zuckerman, an individual residing at
     * * ("Mr.  Zuckerman"),  Daily News, L.P., a Delaware  limited  partnership
with its principal place of business at 450 West 33rd Street, New York, New York
10001, and U.S. News & World Report,  L.P., a Delaware limited  partnership with
its principal  place of business at 2400 N Street N.W.,  Washington,  D.C. 20037
(the Daily News and U.S. News and World Report are  collectively  referred to as
the "Zuckerman/Drasner Properties").


         Preliminary Statements


     (1) * , Mr. Zuckerman,  AGT, New AGT and  Zuckerman/Drasner  Properties are
parties  to a Loan and  Purchase  Agreement  dated as of  January  8,  1992 (the
"Agreement")  as amended by a First  Amendment  to Loan and  Purchase  Agreement
dated as of  September  18,  1995 and a Second  Amendment  to Loan and  Purchase
Agreement  dated  as of  April  19,  1996  (the  "First  Amendment  and  "Second
Amendment"  and  collectively  with the  Agreement,  the  "Purchase  Agreement")
pursuant to which * has extended certain Loans to Mr. Zuckerman,  and * and AGT,
New  AGT  and   Zuckerman/Drasner   Properties   have   entered   into   certain
supply/purchase arrangements (capitalized terms not otherwise defined shall have
the meanings attributable to them in the Purchase Agreement).

     (2) The parties desire to extend the  supply/purchase  arrangements  in the
Purchase Agreement through December 31, 2000 and to change the Rebate rates, the
value of the Prebate and the terms of Prebate repayments through such date.

     (3) Mr.  Zuckerman has agreed to further extend the term of his Amended and
Restated  Guaranty  Agreement until such time as all indebtedness  including the
Initial  Loan  as  represented  by  the  First  Note,  the  Additional  Loan  as
represented  by the  Second  Note,  any Term Loan into  which  such Notes may be
converted has been repaid to * by Mr.  Zuckerman and the Prebate has been repaid
to * by AGT and New AGT, jointly and severally.

     (4) There is to be no other change in the  obligations to pay the First and
Second  Notes  or any  Term  Loan in  which  they  are  converted  or * right to
repayment of any such  indebtedness  as a  consequence  of the  extension of the
supply/purchase  arrangement except for additions to Events of Default under the
Notes  contemplated  by Sections 10, 10A, 10C and 11; nor is there any change in
Rebate rates, the value of the Prebate and the Prebate  repayments;  and * right
to repayment of the Prebate except as specifically set forth herein.

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission

     (5)  AGT,  New  AGT,  Mr.   Zuckerman  and   Zuckerman/Drasner   Properties
specifically acknowledge that the rebate levels set forth herein are significant
concessions on * part and are highly confidential in all respects, and that they
will not receive further increases in such levels or further enhancements to the
program during the term hereof.

     Now Therefore,  in consideration of the mutual covenants and agreements set
forth  herein  and  other  good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged, the parties agree as follows:

Section 1. Amendments to Purchase  Agreement.  The Purchase Agreement is amended
as of January 1, 1997 as follows:


     (a) Section 10 and 10A are restated in their  entirety and new Sections 10B
and 10C are added as follows:

     10.  Purchase  and Use of *  Products.  So long as the  Initial  Loan,  the
Additional  Loan,  the Term  Loan,  the  Prebate  or any other  indebtedness  is
outstanding by Mr.  Zuckerman or by AGT or New AGT to * and/or * under the terms
of this Purchase  Agreement and in any event through  December 31, 2000, AGT and
New AGT agree to make * during each consecutive  twelve-month  period commencing
on  January  1, 1997 in an  amount  sufficient  to cause the * during  each such
twelve-month  period  to  equal  at  least  * . AGT,  New AGT and Mr.  Zuckerman
represent and warrant to * and * that (i) AGT and New AGT currently  purchase no
*  products  from  any * or  supplier  other  than * and  those * and  suppliers
identified in AGT's and New AGT's most recent quarterly  purchase reports to * ,
(ii) except for one existing  agreement  between AGT and New AGT and another * ,
which  agreement is terminable by AGT and/or New AGT at will at any time without
penalty  or  liability  of any kind,  there is no  contract  or other  agreement
between AGT, New AGT or Mr.  Zuckerman  and any person,  except for the Purchase
Agreement, as amended, pursuant to which AGT or New AGT is obligated to purchase
* products or * products,  and (iii) the obligations to purchase * products or *
products  from * pursuant to this  Agreement  will not result in a breach of, or
create a default under,  any existing  agreement  between AGT or New AGT and any
other * * and/or  *  product  * , or Mr.  Zuckerman  and any  other * * and/or *
product * , or among any  combination  of AGT,  New AGT, Mr.  Zuckerman  and any
other * or * , or result in a breach of, or create a default under, or interfere
with or otherwise affect any other existing contract or other agreement to which
AGT,  New AGT or Mr.  Zuckerman  is a party or by which either of them is bound.
AGT, New AGT and Mr.  Zuckerman  acknowledge that the breach of AGT's and/or New
AGT's obligations under Sections 10, 10A, 10C and 11 will constitute an Event of
Default  under the Notes and will entitle * to  accelerate  payment of the Loans
and will entitle * to require immediate repayment of the Prebate as provided for
herein and to enforce Mr. Zuckerman's Second Amended and Restated Guaranty.

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission


     10A.  Purchases  and Use of * Products.  So long as the Initial  Loan,  the
Additional  Loan,  the Term  Loan,  the  Prebate  or any other  indebtedness  is
outstanding  and in any event  through  December 31, 2000,  AGT and New AGT will
make commercially  reasonable  efforts to purchase * Products for its * Products
requirements  rather than similar products from other suppliers so long as the *
Products  are  consistent  with  AGT's  and  New  AGT's  technical  and  quality
specifications and are price competitive.

     So long as Mr. Zuckerman is indebted to * and/or Mr.  Zuckerman's  Guaranty
Agreement is in effect,  he will cause AGT and  Zuckerman/Drasner  Properties to
make and Zuckerman/Drasner  Properties will make commercially reasonable efforts
to purchase * * Products  and * Products  for their  respective * products and *
product  requirements rather than similar products from other suppliers provided
that,  in the  case of  Zuckerman/Drasner  Properties,  it is  Zuckerman/Drasner
Properties'  reasonable  judgment,  that  the  *  Products  and *  Products  are
consistent  with  the   Zuckerman/Drasner   Properties'  technical  and  quality
specifications and are price competitive.

     Purchase  Tracking.  AGT and New AGT at their  expense will arrange for AGT
and New AGT or All Star Purchasing,  Inc. to track and provide purchase data for
all  *  Products   and  *   Products   purchased   by  AGT,   New  AGT  and  the
Zuckerman/Drasner  Properties and will provide * with these calculations  within
30 days of the end of the relevant quarter.

     Section 10B    Limited Price Increases on * Products.

     As additional consideration for the extension of the obligation to purchase
*  Products  by AGT and New AGT,  * agrees  that  during  the period May 1, 1997
through  December 31, 1997 prices charged to AGT and New AGT for * Products will
not increase  during such period over those charged on April 30, 1997. * further
agrees  that prices for * Products  during each of 1998,  1999 and 2000 will not
increase by more than * over those  charged on the last day of the year prior to
each of such years,  and in no event  shall the  increases  be greater  than any
overall price  increase  implemented  by * on such products for the whole or any
portion of each such year.

     AGT's and New AGT's only remedy for any breach of this  paragraph 10B shall
be to recover any amounts charged by * in prices in excess of those provided for
in this  paragraph  10B less  applicable  rebate  paid on account of such excess
amounts,  and such breach shall not otherwise operate to cancel, amend or offset
any  obligation of AGT, New AGT or Mr.  Zuckerman  under the Purchase  Agreement
including  without  limitation  the  repayment  of  the  Initial  Loan,  or  the
Additional Loan, or any Term Loan, or the Prebate, or interest due on any of the
foregoing,  or Mr. Zuckerman's  Guaranty or the obligations  imposed by Sections
10, 10A, 10C and 11.

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission


<PAGE>



     10C Purchase of * . As additional consideration for the extension of terms,
changes  in  rebate  schedules,  and  other  matters  set  forth  in this  Third
Amendment, AGT and New AGT jointly and severally agree on or before December 31,
1997 to purchase and pay for * at a price of * per unit plus  applicable  taxes.
The other terms and  conditions of each such  purchase  shall be as set forth on
the standard * purchase order form attached hereto as Exhibit A.

     It is understood and agreed that the immediate purchase of that certain * *
presently  at * shall be counted as one of the * units  required to be purchased
and paid for before  December 31, 1997, and that full payment for such unit will
be due on or before September 30, 1997. It is further understood and agreed that
a failure to meet the  obligations  under this  Section  10C will be an Event of
Default under the Notes and will entitle * to require immediate repayment of the
Prebate  provided for herein and to enforce Mr.  Zuckerman's  Second Amended and
Restated Guaranty.

     (b) Section 11 is restated in its entirety as follows:

     11. Payment of Rebates and Prebate

          (a) The parties acknowledge and agree that:

               (i)  Subject only to an audit of the records  maintained by * and
                    AGT/All  Star   Purchasing,   Inc.,  all  rebates  due  from
                    inception of the  Purchase  Agreement  through  December 31,
                    1996  have  been   properly   paid  to  AGT,   New  AGT  and
                    Zuckerman/Drasner  Properties.

               (ii) * has  paid and AGT and New AGT have  received  the  initial
                    prebate of * * which at January 1, 1997 had a present  value
                    of * * . In  consideration  of the extension of payment time
                    provided hereunder and other changed terms including changes
                    in the rebate  percentage set forth below, the parties agree
                    now that such sum at  January 1, 1997 has a value of * * and
                    such latter sum is hereinafter  referred to as "the Prebate"
                    for the purpose of the Agreement,  as amended hereby and for
                    the  purposes of the Second  Amended and  Restated  Personal
                    Guarantee of Mr. Zuckerman.

          (b) Payment of Rebates. At the end of each calendar quarter commencing
     during the term of this Purchase Agreement,  and provided that (x) no Event
     of Default shall have occurred and be continuing  under the First or Second
     Note or the Term  Loan (if in  place),  or (y) there is no  default  in the
     obligation  respecting  repayment of the Prebate,  or (z) there has been no

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission

<PAGE>


     other breach of the  obligation to purchase * Products or * Products  under
     Section 10, 10A, and Section 11 and under  Section 10C  respecting * of the
     Purchase Agreement, then AGT, New AGT and Zuckerman/Drasner Properties will
     each be entitled  to receive a rebate from * on its * during such  quarter.
     The  rebates  will each be equal to a  percentage  of AGT's,  New AGT's and
     Zuckerman  Drasner's * during the applicable  quarter.  The percentage used
     for  these  purposes  will  be  determined  on the  basis  of the  combined
     annualized   amount   of   (i)    Zuckerman/Drasner    Properties'   Actual
     Zuckerman/Drasner Purchases; (ii) AGT's and New AGT's * * ; and (iii) AGT's
     and New AGT's and Zuckerman/Drasner  Properties' * * (the amounts described
     in clauses (i),  (ii) and (iii)  hereafter  called the "Rebate  Purchases")
     during the quarter in question, as set forth in the following table:

                              *

               *              *              *
               *
               *              *              *
               *              *              *

                                  *

                          *               *
                          *
                          *               *
                          *               *
                          *               *
                          *               *

                                  *

                          *               *
                          *
                          *               *
                          *               *
                          *               *
                          *               *



* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission

<PAGE>






     While * are used in computing total volume, no rebate is to be paid on such
purchases.  For the purposes of  determining  the applicable  rebate  percentage
rate, the Rebate Purchases will be annualized as of the end of each of the first
three calendar  quarters of each calendar year, with each such calculation being
based  solely on the  volume of the  Rebate  Purchases  during  the  quarter  in
question,  not for the period from the  beginning of the year through the end of
such quarter.  For example, if in the third quarter of 1997 the Rebate Purchases
of * totaled * , then the rebate on such purchases  would be equal to * (i.e., *
in purchases equates to an annualized rate of * ; accordingly,  the rebate would
be equal to * of * ). If, on the other hand,  the Rebate  Purchases of * in such
quarter totaled * , then the rebate on such purchases would be equal to * (i.e.,
* in purchases equate to an annualized rate of * ; accordingly, the rebate would
be equal to * of * ). At the end of each fourth  quarter,  the Rebate  Purchases
for the year will be totaled,  and, in the event of any discrepancy  between the
annualized  rates used during any of the preceding three quarters and the actual
year-end  results,  the rebate rates will be recalculated  for such quarters and
the fourth quarter rebate adjusted  accordingly.  Each rebate on * to which AGT,
New AGT and Zuckerman/Drasner  Properties are entitled under this Agreement will
be paid by * within  thirty  days  following  * receipt of a properly  completed
Claims for Payment executed respectively by (x) the General Partner on behalf of
AGT, (y) the Chief  Financial  Officer of New AGT,  and (z) the Chief  Financial
Officer of Zuckerman/Drasner  Properties,  in each case setting forth the volume
of Rebate Purchase.

     It is  understood  that  Purchases of * Products or * Products  outside the
United States shall not be taken into account for these  purposes.  At AGT's and
New AGT's request,  * will consider  entering into a separate  arrangement  with
respect  to AGT's and New AGT's  overseas  business,  but * shall have no rebate
obligations  with  respect  thereto  absent a written  agreement to the contrary
signed by both parties.

     It is understood  and agreed that Rebate  Purchases by each of AGT, New AGT
and  Zuckerman/Drasner  Properties  during 1997 will be consistent  with and not
exceed  historic,  usual and customary order flow so as to prevent and limit any
purchases in 1997 for actual use in 1998 or thereafter and to prevent  purchases
by any one of them for resale to or use by any party except the  ordering  party
and a breach of the foregoing shall also be deemed an Event of Default under the
Notes.

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission

     From January 1, 1997 through  December 31, 1997 * agrees to pay AGT and New
AGT  their  rebate  on  their  *  and  Zuckerman/Drasner  Properties  on  Actual
Zuckerman/Drasner  Purchases,  on a monthly basis using an estimate of purchases
that equate to an  aggregate * month  rebate  provided,  however,  that for each
Quarter of 1997 * will retain * of the amount of the total rebate earned by each
of AGT, New AGT and Zuckerman/Drasner  Properties on account of * and apply that
amount to reduce the Prebate.  Quarterly  rebate Claims for Payment filings will
be  submitted  by AGT,  New AGT and  Zuckerman/Drasner  Properties  or All  Star
Purchasing as provided hereinabove and at that time any adjustments based on the
actual  volumes will be made, the monthly  rebates  already paid to AGT, New AGT
and Zuckerman/Drasner  Properties will be offset against the actual rebate owed,
and any  additional  rebates  owed  (which in the case of * by AGT,  New AGT and
Zuckerman/Drasner  Properties  will be net of the  applications  to  reduce  the
Prebate)  will  be paid to AGT,  New  AGT and  Zuckerman/Drasner  Properties  as
provided above. If * overpaid AGT, New AGT or  Zuckerman/Drasner  Properties for
the quarter,  the  overpaid  parties  will  reimburse * for the amount  overpaid
within thirty days of receiving written notice of such overpayment.  The Parties
agree that all rebate  payments  shall be made by * to each of AGT,  New AGT and
Zuckerman/Drasner  Properties  on account of its pro rata  share  thereof,  said
payments to be delivered to AGT, New AGT and Zuckerman/Drasner Properties, or in
the aggregate to All Star Purchasing,  Inc. for its distribution to AGT, New AGT
and Zuckerman/Drasner Properties and such payment to All Star shall be deemed to
satisfy * payment obligation.  * shall provide a record of all reductions in the
amount of the  Prebate  owed by AGT and New AGT  through  December  31, 1997 and
provide a statement of the outstanding Prebate on January 1, 1998.

     Starting the first quarter of 1998 through the fourth  quarter of 2000, the
rebates due to AGT,  and New AGT under this Section 11 will be  reconciled  on a
quarterly basis against the value of the outstanding Prebate at January 1, 1998.
This will be done in the  following  manner.  The amount of rebate earned by AGT
and New AGT for the quarter will be  determined.  If the amount of rebate earned
by AGT and New AGT  during the  quarter  is in excess of * * of the  outstanding
Prebate, * will pay AGT and New AGT the excess rebate for that quarter within 30
days of the end of the  quarter.  If AGT and New AGT earn  less  than * * of the
outstanding  Prebate on January 1, 1998, AGT and New AGT, jointly and severally,
must  pay *  the  difference  between  the  earned  rebate  and  such  * of  the
outstanding  Prebate.  * will invoice AGT and New AGT for the difference and AGT
and New AGT are jointly and  severally  obligated  to pay the invoice  within 30
days. * and AGT/All Star will keep the  appropriate  records and will  determine
the appropriate rebate. It is the intent and purpose of this paragraph to reduce
the  outstanding  Prebate  on  January  1, 1998 by * during  each of the  twelve
quarters during the period January 1, 1998 through December 31, 2000.

     Should AGT or New AGT or  Zuckerman/Drasner  Properties  at any time breach
its  obligation  to purchase * and * as provided in Sections 10, 10A and Section
11 and under Section 10C  respecting * , * may, at its option,  require that AGT
and New AGT,  jointly and severally,  immediately pay to * the Adjusted  Balance
(as defined  below) of the  Prebate,  together  with  interest  on the  Adjusted
Balance at * computed from the date of the breach through the actual date of the
payment of the Adjusted  Balance.  For purposes of this Section (i) the Adjusted
Balance  shall be calculated by adding to the balance of the Prebate on the date
of breach an amount  equal to the  "unearned"  portion of any  reduction  in the
Prebate credited during 1997 (such reduction,  the "1997  Reduction"),  and (ii)
the "unearned"  portion of the 1997  Reduction  shall be computed by multiplying
the 1997 Reduction by a fraction,  which shall be determined in accordance  with
the following schedule:

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission

                  *

                                        *
*                                       *
*                                       *
*                                       *
*                                       *
*                                       *
*                                       *
*                                       *
*                                       *
*                                       *
*                                       *
*                                       *
*                                       *

     If * exercises its option to require payment of the Adjusted Balance,  then
such sum shall become "the Prebate" for the purposes of Mr. Zuckerman's Guaranty
Agreement and Mr.  Zuckerman  acknowledges he has  individually  guaranteed such
payment.  In such event, AGT and New AGT waive any and all defenses  (including,
without  limit  demands for  payment,  notice and  presentment)  to such payment
except those defenses which factually  dispute any alleged  non-compliance  with
Section 10 and 10A.

Section  2.  Amendment  to  Guaranty  Agreement.  Mr.  Zuckerman  shall  deliver
concurrently  with his execution of this Third Amendment an executed copy of the
Second  Amended and Restated  Guaranty  Agreement  attached  hereto as Exhibit B
which acknowledges and agrees to the changes in the value of the Prebate and the
terms of the repayment of the Prebate.

Section 3. Confirmation of Agreement.  Except as expressly  amended herein,  the
Purchase Agreement is ratified and confirmed in all respects and shall remain in
full force and effect in accordance  with its terms.  Mr.  Zuckerman and AGT and
New AGT and each of them represent and confirm each and every representation and
warranty  previously  made is true and correct and  continuing as of the date of
this Third Amendment and that there has been no breach thereof by any of them as
of the date of this Third Amendment.  It is expressly understood and agreed that
no term,  condition or change set forth in this Third Amendment shall operate to
extend or change the  maturity  or any other term or  condition  of the First or
Second Note and Mr. Zuckerman's  absolute  obligation to repay such Notes except
the additions to Events of Default under such Notes contemplated by Sections 10,
10A, 10C and 11; nor shall it effect the absolute obligation

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission

<PAGE>



to repay the Prebate except in so far as this Third Amendment changes the amount
of such Prebate and the time for repayment of such Prebate,  nor shall it effect
the absolute  guarantee of Mr. Zuckerman for the repayment of the Prebate except
as expressly set forth in the Second Amended and Restated Guaranty Agreement. It
is the intention of the parties that at all times from  inception of the Prebate
through its final payment that Mr.  Zuckerman's  guaranty  thereof be continuous
and uninterrupted.


Section 4. Execution in  Counterparts.  This Third  Amendment may be executed in
counterparts,  each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument.

Section 5.  Governing Law. The  interpretation  and  construction  of this Third
Amendment  to the Loan and  Purchase  Agreement,  and all matters in  connection
herewith,  shall be governed by the  substantive  laws of the State of New York,
without regard to the choice of law principles.

Section 6. Effectiveness.  This Third Amendment, together with the amendments to
the Purchase  Agreement  incorporated  in this Third  Amendment,  and the Second
Amended and Restated Guaranty Agreement (the form of which is attached hereto as
Exhibit B) shall be  effective  as of January 1, 1997 upon receipt by * and * of
the last signed  counterpart and the signed Second Amended and Restated Guaranty
Agreement.











               (The remainder of this page is intentionally blank)


* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission








<PAGE>





Witness the following signatures:

              *                                    *

By:     *                                By:*
    (signature)                                (signature)


*                                        *
     (title)                                 (title)
Date:  July 24, 1997                     Date:   July 24,
                                         1997

Mortimer B. Zuckerman                    Daily News, L.P.

By:   /s/ Mortimer B. Zuckerman          By:   /s/ Fred
                                         Drasner
    (signature)                              (signature)

                                               Chief Executive Officer
                                         (title)
Date:   July 22, 1997                    Date:   July 22,
                                         1997

U.S. News & World Report, L.P.           Applied Printing Technologies, L.P.

By:   /s/ Fred Drasner                   By:  /s/ Fred
                                         Drasner
    (signature)                              (signature)

      Chief Executive Officer              Chairman and Chief Executive Officer
     (title)                                  (title)
Date: :   July 22, 1997                  Date::   July 22,
                                           1997

Applied Graphics Technologies, Inc.

By:  /s/ Fred Drasner
    (signature)
     Chairman and Chief Executive Officer
     (title)
Date: :   July 22,
1997



* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission


<PAGE>



            EXHIBIT B OF THIRD AMENDMENT TO LOAN & PURCHASE AGREEMENT




                 Second Amended and Restated Guaranty Agreement




                                                  June 30, 1997


*
*
*

Gentlemen:


     For value  received and in order to induce * , with its principal  place of
business at * , to have  originally  provided a prebate  ("Prebate")  to Applied
Graphics Technologies, L.P., a/k/a/ Applied Printing Technologies, L.P. with its
principal place of business at 463 Barell,  Carlstadt,  New Jersey 07072 ("AGT")
and Applied Graphic Technologies, Inc. a Delaware corporation with its principal
place of business at 28 West 23rd Street,  New York, New York 10010 ("New AGT"),
and to extend the time for  repayment  of the  Prebate  and an  increase  in the
rebate percentages,  to change certain terms, including the value of the Prebate
and the amount of Prebate to be paid during 1997 and  thereafter and relating to
purchases to be made by AGT, New AGT and  Zuckerman/Drasner  Properties from * ,
and to execute the Third  Amendment of Loan and Purchase  Agreement of even date
herewith among * , * * , AGT, New AGT Mortimer B. Zuckerman ("Guarantor"), Daily
News,  L.P,  and  U.S.  News  &  World  Report,   L.P.,  known  collectively  as
Zuckerman/Drasner  Properties (the "Third Amendment"),  Guarantor, an individual
residing at * * hereby, absolutely, irrevocably and unconditionally,  guarantees
unto * , its successors and assigns, the payment of the Prebate in the aggregate
amount of * * with  applicable  interest,  to * pursuant  to and under the First
Amendment of Loan and Purchase  Agreement  dated  September l8, 1995 between * ,
AGT and Guarantor,  and the Second Amendment  thereto between * and AGT, New AGT
and Zuckerman  Properties  dated April 19, 1996 and the Third Amendment  thereto
and as amended from time to time (including but not limited to as amended by the
Third  Amendment),  and including any  extensions  and renewals  thereof or part
thereof, together with interest, fees, charges, expenses and costs of collection
or enforcement, including attorneys fees (collectively, the "Liabilities").

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission

     Guarantor acknowledges and agrees that the Liabilities shall not be reduced
by any "unearned"  portion of any reduction in the Prebate  credited during 1997
as such  "unearned"  portion is calculated  under the terms of Section 11 of the
Loan and Purchase Agreement respecting the "Adjusted Balance." Thus in the event
that there is any breach by AGT or New AGT or  Zuckerman/Drasner  Properties  of
any  obligation set forth in Section 10, 10A, 10C or 11 of the Loan and Purchase
Agreement as amended, then the Liabilities shall include the Adjusted Balance of
the  Prebate  together  with  interest,  fees,  charges,  expenses  and costs of
collections and enforcement.

     * may without  notice or demand of any kind grant any extensions of time to
or make any  compromise  with or release  and  discharge  AGT or New AGT, or any
other  party  or  parties  liable  with  AGT or New  AGT  upon  any  instrument,
indebtedness or obligation, or any other guarantor thereof, and * may release or
omit to collect or enforce or may compromise any collateral  security held by it
without  regard to any  demands or  requests by  Guarantor  and without  thereby
releasing Guarantor hereunder or incurring any liability to Guarantor.

     * may  without  notice  or  demand  of any kind  realize  on and  apply any
collateral held by * , whether or not deposited by Guarantor, to such obligation
or obligations as * may elect,  whether guaranteed hereby or not, without regard
to any rights of Guarantor in respect to the  application  thereof.  All sums at
any time to the credit of the  Guarantor  and any property of the Guarantor in *
possession  shall be deemed held by * as security for any and all of Guarantor's
obligations hereunder.

     If AGT or New AGT fail to pay all or any part of the Liabilities  when due,
whether by acceleration or otherwise, Guarantor, immediately upon written demand
of * , will pay to * all Liabilities then due and unpaid by AGT or New AGT as if
such Liabilities constituted direct and primary obligations of Guarantor.

     This instrument shall be deemed to be a continuing  guaranty of payment and
not of  collectability  and shall  remain in full  force and  effect  until full
performance  and  payment  of  all  of  the  Liabilities,  whether  absolute  or
contingent, and any renewals or extensions thereof. * and AGT and/or New AGT may
agree to subsequent  changes on the applicable  interest rate without  impairing
any of * right  under this  Guaranty.  * may  release  Guarantor  without in way
affecting or  terminating  the  obligations  of any other  guarantors as to then
existing or future  Liabilities and notice by Guarantor shall in no way offer or
terminate  the  obligation  of  Guarantor  or any of the  Guarantors  as to then
existing or future  Liabilities.  Guarantor's  liability  hereunder is in no way
conditional  or  contingent  upon any attempt to collect  from AGT or New AGT or
realize upon any collateral  security for the Liabilities.  Guarantor shall have
no right of subrogation,  reimbursement or indemnity  whatsoever and no right of
recourse  to or with  respect to any assets or  property of AGT or New AGT or to
any collateral for the  Liabilities,  unless and until all the Liabilities  have
been paid and performed in full.

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission

     Guarantor  agrees to pay its  obligations  hereunder  without  deduction by
reason of any set-off,  defense or  counterclaim  of AGT or New AGT, and without
requiring  protest,  presentment  or notice of  dishonor or notice of default or
non-payment.  Guarantor's  obligation shall not be affected by any invalidity or
unenforceability  of the  Liabilities  against  AGT  and/or New AGT or any other
person or entity, all of which are hereby waived.

     Guarantor  represents  and  warrants  that  the  execution,   delivery  and
performance  hereof and of any term,  covenant or condition  herein provided for
are within his power and are not in  conflict  with any  indenture,  contract or
agreement to which  Guarantor is a party or by which Guarantor is bound, or with
any statute, rule regulation, decree, judgment or order binding upon Guarantor.

     Guarantor  covenants that from the date hereof until all obligations  owing
to * hereunder  have been paid  fully,  Guarantor  shall  furnish to * annually,
promptly and as soon as  available,  but in no event more than 90 days after the
end of each  calendar  year,  financial  statements  at the end of and for  such
calendar year and, promptly after * request, such other financial information as
* may from time to time reasonably request.

     Books and records showing the account and amounts  outstanding between * on
the one hand and AGT and New AGT on the other shall be admissible in evidence in
any action or  proceedings  and shall  constitute  prima  facie  proof  thereof.
Guarantor  expressly  waives any rights to notice of acceptance from * or to any
other  notice or demand upon  Guarantor  or to any other  actions or  conditions
prior to * reliance upon or enforcement of this Guaranty.  * may take or refrain
from taking any of the actions  authorized under this Guaranty without notice of
any  kind  to  Guarantor.   Arrangements   by  and  between  AGT,  New  AGT  and
Zuckerman/Drasner  Properties  respecting the  Liabilities  shall not operate to
waive, cancel or amend Guarantor's absolute and unconditional  obligations under
this Guaranty.

     This Guaranty shall be enforceable as to all of the Liabilities despite any
discharge of AGT or New AGT in bankruptcy  and despite  adjustment of all or any
part of the  Liabilities  in  insolvency  proceedings  or pursuant to some other
compromise  with  creditors.  If  claim is ever  made  upon * for  repayment  or
recovery of any amount or amounts  received by * in payment or on account of any
of the Liabilities, and * repays all or part of said amount by reason of (a) any
judgment,  decree  or order  of any  court or  administrative  body,  or (b) any
settlement or compromise of any such claim  effected by * with any such claimant
(including  AGT or New AGT),  then and in such event  Guarantor  agrees that any
such judgment,  decree, order,  settlement,  or compromise shall be binding upon
Guarantor,  notwithstanding  any termination  hereof or the  cancellation of any
such  Liabilities,  and Guarantor  shall be and remain liable  hereunder for the
amounts so repaid or  recovered  to the same  extent as if such amount had never
originally been received by * .

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission

     Guarantor's  liability  hereunder is in addition to and  independent of any
other liabilities such Guarantor has incurred or assumed, or may hereafter incur
or assume, by way of endorsement,  separate guaranty agreement,  or in any other
manner,  with respect to all or any part of the Liabilities  guaranteed  hereby.
This  Guaranty  does not  supersede  or  limit  any such  other  liabilities  of
Guarantor, and * rights and remedies under and pursuant to this Guaranty and any
such  other   liabilities  are  cumulative  and  may  be  exercised   singly  or
concurrently.

     This instrument  shall be binding upon Guarantor,  and any heirs,  personal
representatives  or successors and assigns,  and shall inure to * benefit.  This
instrument  contains the entire  agreement  between parties hereto and cannot be
changed orally.  No failure by * to exercise any right hereunder shall be deemed
a waiver  thereof,  nor shall any single or partial  exercise  by * of any right
hereunder preclude any other or further exercise thereof,  and no waiver by * of
any right hereunder shall operate as a waiver of any other right.

     This  Guaranty  shall  be  governed  by the  laws of the  State of New York
without regard to choice of law principles. Any provision of this Guaranty which
found  to be  prohibited  by law  will  be  ineffective  to the  extent  to such
prohibition without invalidating the remaining provisions.

     In Witness  Whereof,  Guarantor has executed this instrument as of the date
first set forth above.



Date:   June 30, 1997                                  /s/ Mortimer B. Zuckerman
                                                       Mortimer B. Zuckerman




     On this 30th day of June, 1997,  before me personally  appeared Mortimer B.
Zuckerman  who, being by me duly sworn did depose and say that he resides at * *
and that he is the individual who executed the foregoing agreement.



Notary Public


                                                       My Commission Expires:





* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission



<PAGE>



                       SECOND AMENDMENT TO PROMISSORY NOTE


     This Second Amendment to Promissory Note ("Second Amendment") is made as of
the 30th day of June, 1997 by and between * ("Lender") and Mortimer B. Zuckerman
("Borrower") and amends the Promissory Note of Borrower to Lender, dated January
8,  1992,  in  the  original   principal   amount  of  Twelve  Million   Dollars
($12,000,000)  as amended by the First  Amendment  to  Promissory  Note  between
Lender and Borrower,  dated April 19, 1996 (the "Promissory Note").  Capitalized
terms used herein and not  otherwise  defined  shall have the  meaning  ascribed
thereto in the Promissory Note.

     The  Promissory  Note was issued in  connection  with the Loan and Purchase
Agreement,  dated as of  January 8, 1992,  among * , Lender,  Applied  Print-ing
Technologies,  L.P. ("AGT"),  Borrower and Daily News, L.P. and was amended by a
First  Amendment of Loan and Purchase  Agreement  among such parties dated as of
September  18,  1995,  and  further  amended by a Second  Amendment  to Loan and
Purchase Agreement to, among other things, add Applied Graphics Technology, Inc.
("New AGT") and U.S. News & World Report, L.P. as parties (the Loan and Purchase
Agreement,  as  amended  by the  First  and  Second  Amendments,  the  "Purchase
Agreement").  (Daily News, L.P. and U.S. News & World Report,  L.P. are referred
to herein as the  "Zuckerman/Drasner  Properties").  The parties  have agreed to
further amend the Purchase  Agreement and have entered into a Third Amendment to
Loan and Purchase Agreement (the "Third Amendment"), dated as of June 30, 1997.

     NOW, THEREFORE,  in consideration of the mutual promises and agreements set
forth in the Purchase  Agreement  and the Third  Amendment and the documents and
instruments  issued by the parties in  connection  therewith and intending to be
legally bound, Lender and Borrower agree as follows:

     1. The  Events of  Default  set  forth in the  Promissory  Note are  hereby
amended  and a new  paragraph  (e) is  hereby  added  to  replace  the  existing
paragraph (e) in its entirety as follows:

          (e)  Breach  of  Purchase   Requirements;   Termination   of  Purchase
               Agreement  or Guaranty.

               (i) AGT  and/or  New AGT fail to make,  at the  times  and in the
               amounts specified, * , purchases of * Products,  purchases of * *
               and such other  purchases  of *  products  or  otherwise  fail to
               comply  with  AGT's  and/or New AGT's  covenants  as set forth in
               Section 10, 10A, 10C and 11 of the Purchase Agreement, as amended
               by the Third  Amendment;  or

               (ii)  Borrower  fails  to  cause  any  of  AGT,  New  AGT  or the
               Zuckerman/Drasner Properties to make the purchases required under
               Sections 10, 10A or 10C of the Pur-chase Agreement, as amended by
               the Third Amendment; or

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission
 
              (iii) The Purchase Agreement,  as amended by the Third Amendment,
               or the Second Amended and Restated Guaranty Agreement of Borrower
               to * , dated as of June 30, 1997 (the "Guaranty Agreement") shall
               cease to be in full  force and effect or shall be  terminated  or
               the  validity or  enforceability  thereof  shall be  contested by
               Borrower or by any other person other than * or * .


     2. All  references to the Promissory  Note in the Purchase  Agreement or in
the Third  Amendment  shall be the  Promissory  Note as amended  by this  Second
Amendment to Promissory Note. An executed copy of this Second Amendment shall be
affixed to the Promissory Note.

     3. This Second Amendment may be executed in one or more counterparts,  each
of which  shall be deemed an  original  and all of which,  when taken  together,
shall constitute one instrument.

     4. Except as expressly  amended  hereby,  all of the terms,  covenants  and
conditions  of the  Promissory  Note shall  continue  in full force as effect in
accordance with its terms.

     IN WITNESS WHEREOF,  this Second Amendment has been executed as of the date
first above written.

                                    BORROWER:





                                    -------------------------------


                                        Mortimer B. Zuckerman


                                    LENDER:


                                                                  *





                                    By:________________________________


                      Title:_______________________________



* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission


<PAGE>



                       SECOND AMENDMENT TO PROMISSORY NOTE


     This Second Amendment to Promissory Note ("Second Amendment") is made as of
the 30th day of June, 1997 by and between * ("Lender") and Mortimer B. Zuckerman
("Borrower")  and amends the Promissory  Note of Borrower to Lender,  dated June
23, 1993, in the original principal amount of Three Million Dollars ($3,000,000)
as  amended  by the First  Amendment  to  Promissory  Note  between  Lender  and
Bor-rower,  dated April 19, 1996 (the "Promissory Note"). Capitalized terms used
herein and not oth-erwise defined shall have the meaning ascribed thereto in the
Promissory Note.

     The  Promissory  Note was issued in  connection  with the Loan and Purchase
Agreement,  dated as of  January 8, 1992,  among * , Lender,  Applied  Print-ing
Technologies,  L.P. ("AGT"),  Borrower and Daily News, L.P. and was amended by a
First Amendment of Loan and Purchase  Agreement among such parties,  dated as of
September  18,  1995,  and  further  amended by a Second  Amendment  to Loan and
Purchase Agreement to, among other things, add Applied Graphics Technology, Inc.
("New AGT") and U.S. News & World Report, L.P. as parties (the Loan and Purchase
Agreement,  as  amended  by the  First  and  Second  Amendments,  the  "Purchase
Agreement").  (Daily News, L.P. and U.S. News & World Report,  L.P. are referred
to herein as the  "Zuckerman/Drasner  Properties").  The parties  have agreed to
further amend the Purchase  Agreement and have entered into a Third Amendment to
Loan and Purchase Agreement (the "Third Amendment"), dated as of June 30, 1997.

     NOW, THEREFORE,  in consideration of the mutual promises and agreements set
forth in the Purchase  Agreement  and the Third  Amendment and the documents and
instruments  issued by the parties in  connection  therewith and intending to be
legally bound, Lender and Borrower agree as follows:

     1. The  Events of  Default  set  forth in the  Promissory  Note are  hereby
amended  and a new  paragraph  (e) is  hereby  added  to  replace  the  existing
paragraph (e) in its entirety as follows:

          (e)  Breach  of  Purchase   Requirements;   Termination   of  Purchase
               Agreement or Guaranty.

          (i)  AGT and/or New AGT fail to make,  at the times and in the amounts
               specified, * , purchases of * Products, purchases of * * and such
               other  purchases of * products or  otherwise  fail to comply with
               AGT's and/or New AGT's covenants as set forth in Section 10, 10A,
               10C and 11 of the  Purchase  Agreement,  as  amended by the Third
               Amendment; or

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission

          (ii) Borrower   fails   to   cause   any  of  AGT,   New  AGT  or  the
               Zuckerman/Drasner Properties to make the purchases required under
               Sections 10, 10A or 10C of the Pur-chase Agreement, as amended by
               the Third Amendment;  or

          (iii)The Purchase  Agreement,  as amended by the Third  Amendment,  or
               the Second Amended and Restated Guaranty Agreement of Borrower to
               * , dated as of June 30, 1997 (the "Guaranty  Agreement"),  shall
               cease to be in full  force and effect or shall be  terminated  or
               the  validity or  enforceability  thereof  shall be  contested by
               Borrower or by any other person other than * or * .

     2. All  references to the Promissory  Note in the Purchase  Agreement or in
the Third  Amendment to shall be the  Promissory  Note as amended by this Second
Amendment to Promis-sory  Note. An executed copy of this Second  Amendment shall
be affixed to the Promissory Note.

     3. This Second Amendment may be executed in one or more counterparts,  each
of which  shall be deemed an  original  and all of which,  when taken  together,
shall constitute one instrument.

     4. Except as expressly  amended  hereby,  all of the terms,  covenants  and
conditions  of the  Promissory  Note shall  continue  in full force as effect in
accordance with its terms.

     IN WITNESS WHEREOF,  this Second Amendment has been executed as of the date
first above written.

                                    BORROWER:





                                    -------------------------------


                                        Mortimer B. Zuckerman


                                    LENDER:



                                                            *





                                    By:________________________________


                                      Title:_______________________________

* Text deleted  pursuant to application  for  Confidential  Treatment under Rule
24b-2 of the  Securities  Exchange  Act of 1934 and  filed  separately  with the
Securities and Exchange Commission