Document:

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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.
<PAGE>   2

            (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.

<PAGE>   7

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
-------------------------------                 -------------------------------
Date                                            Date<PAGE>   1
                                                            Exhibit 10.6(d)(iii)

                       APPLIED GRAPHICS TECHNOLOGIES, INC.
                              SEPARATION AGREEMENT

      This SEPARATION AGREEMENT (this "AGREEMENT") is made as of this 18th day
of December, 2000 (the "EFFECTIVE DATE") between SCOTT BROWNSTEIN, a resident of
the State of New York with an address of 120 Ridgeway Estates, Rochester, New
York 14626 (the "EXECUTIVE") and APPLIED GRAPHICS TECHNOLOGIES, INC., a Delaware
corporation with an address of 450 West 33rd Street, 3rd Floor, New York, New
York 10001-2681 ("AGT").

                                R E C I T A L S:

      A. AGT and Fuji Photo Film U.S.A., Inc., a New York corporation, ("FUJI")
have entered into an Asset Purchase Agreement on even date herewith (the
"PURCHASE AGREEMENT"), pursuant to which it is contemplated that AGT will sell
to Fuji (or an affiliate of Fuji) and Fuji (or an affiliate of Fuji) will
purchase from AGT the E-Photo Business (as defined in the Purchase Agreement) on
the terms and conditions contained therein.

      B. Executive is the Chief Technology Officer of the E-Photo Business.

      C. Fuji's obligation to close the transactions contemplated under the
Purchase Agreement is conditioned on, among other things, five Key Employees (as
defined in the Purchase Agreement) (including the Executive) entering into
employment agreements with Fuji (or an affiliate of Fuji) on terms and
conditions mutually satisfactory to Fuji and the Executive ("FUJI EMPLOYMENT
AGREEMENT").

      D. At AGT's request, the Executive intends to negotiate an employment
agreement with Fuji.

      E. Effective on the closing of the transactions contemplated under the
Purchase Agreement (the "CLOSING" and such date being referred to as the
"CLOSING DATE"), the Executive's employment with AGT will immediately cease,
subject to and on the terms and conditions herein.

                                R E C I T A L S:

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
and undertakings set forth herein, the Executive and AGT agree as follows:

      1. TERM OF AGREEMENT. This Agreement shall become effective on the
Effective Date and shall continue in full force and effect thereafter unless the
Purchase Agreement terminates, for any reason or for no reason, without the
Closing contemplated therein having occurred, in which case this Agreement shall
terminate simultaneously therewith, and neither party hereto shall have any
further obligation or liability to the other under this Agreement and no
provision of this Agreement shall have any force or effect ab initio. AGT shall
give the Executive prompt written notice of any termination of the Purchase
Agreement and of this Agreement.
<PAGE>   2
      2. TERMINATION OF EMPLOYMENT.

            (a) The Executive hereby resigns (such resignation to be effective
as of the Closing Date) from all officer and other positions, titles, duties,
authorities and responsibilities with, arising out of or relating to his
employment with AGT and its affiliates; provided that simultaneously with the
Closing, AGT shall pay the Executive the Termination Payment and the Stock
Option Payment referred to below (collectively, the "EXECUTIVE PAYMENTS").
Subsequent to Closing, Executive will have no right to continued employment with
AGT. During the period between the Effective Date and the Closing Date (or the
date the Purchase Agreement terminates without a Closing) (the "INTERIM
PERIOD"), the Executive or his estate shall continue to be paid his base salary
as in effect on the Effective Date and he will receive the same employee
benefits as he received immediately prior to the Effective Date (including his
salary for the period, his current medical benefits, and continued stock
vesting) in accordance with AGT's normal and customary pay practices for
executive employees, subject to all applicable federal and state income,
payroll, and other applicable tax withholding. Executive acknowledges that he
will not be entitled to any bonus with respect to fiscal year 2000.

            (b) Pursuant to Section 4.5 of the Purchase Agreement, the Executive
acknowledges that Fuji has agreed that during the first three months following
the Closing (and possibly the first four months), the Executive may provide
certain consulting services to AGT to (i) assist AGT in completing a project for
The New York Daily News on which the Executive was involved prior to the
Closing, and (ii) answer telephone questions of AGT related to transition issues
from the separation of the AGT E-Photo Business (as such term is defined in the
Purchase Agreement) from AGT's E-Business Division as further described and
subject to the terms and conditions stated therein. In the event that the
Executive's employment with Fuji terminates for any or no reason prior to the
end of such period and prior to the Executive providing the service hours
contemplated therein, then the Executive shall provide such additional hours of
service as are required to complete the service hours, provided that in no event
shall the total number of hours devoted by the Executive to such sum (including
prior to termination of his employment with Fuji) exceed seventy (70) hours in
total.

            (c) Under Section 8.11 of the Purchase Agreement, Fuji has committed
to provide AGT with certain litigation support, which may include making
available the Executive. In the event that during the first two (2) years after
the Closing, the Executive is not employed by Fuji, the Executive will provide
reasonable cooperation to AGT or its counsel, which may include travel and
providing testimony, in the contest or defense of any charge, complaint, action,
suit, proceeding, hearing, investigation, claim, or demand involving any
transaction contemplated under the Purchase Agreement or any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the E-Photo Business or AGT (other than one involving a claim brought
by the Executive or, in those cases where the Executive is still providing
consulting services to Fuji, one involving a claim brought by Fuji) in each case
which arises during such two (2) year period. AGT shall fully compensate the
Executive for any such services at an agreed upon reasonable rate and reimburse
the Executive for all expenses incurred by Executive in performing such
services.

      3. TERMINATION PAYMENT. Simultaneously with the Closing and the payment of
the purchase price by Fuji to AGT provided for under the Purchase Agreement, AGT
shall pay the Executive, in a lump sum in cash or by wire transfer of
immediately available funds to an account designated by the Executive, One
Million Six Thousand Five Hundred Fifty One Dollars and No Cents ($1,006,551.00)
(the "TERMINATION PAYMENT"), net of any applicable withholding taxes required by
any government to be withheld or otherwise deducted that may be due.

<PAGE>   3

      4. REPURCHASE OF STOCK OPTIONS. AGT acknowledges and confirms that the
Executive is vested with respect to an incentive stock option ("OPTION NO. 1")
to purchase 54,000 shares (the "VESTED OPTION SHARES") of AGT common stock at an
option price of $30.00 per share and that this vested portion of Option No. 1 is
fully exercisable in accordance with the Stock Option Agreement. AGT further
acknowledges and confirms that the Executive is unvested with respect to 18,000
shares of AGT common stock subject to Option No. 1 and with respect to 10,000
shares of AGT common stock subject to an incentive stock option ("OPTION NO. 2")
to purchase 10,000 shares (all such shares, the "UNVESTED OPTION SHARES") of AGT
Common Stock at an option price of $12.97 per share. Simultaneously with the
Closing under the Purchase Agreement and the payment of the purchase price by
Fuji to AGT provided for under the Purchase Agreement, AGT will repurchase
Option No.1 at a price of $2.48 per share and Option No. 2 for $3.89 per share,
for an aggregate purchase price due of $217,449 (the "STOCK OPTION PAYMENT").

      5. EXCISE TAX. The parties believe that no part of the payments or
benefits (within the meaning of Section 280G(b)(2) of the Internal Revenue Code
of 1986, as amended (the "CODE")), to the Executive or for the Executive's
benefit paid or payable or distributed or distributable pursuant to the terms of
this Agreement (including, but not limited to, the Executive Payments or
otherwise in connection with, or arising out of, the Executive's employment with
AGT or Fuji (any such payment(s) or benefit(s), a "PAYMENT" or "PAYMENTS"),
would be subject to the excise tax imposed by Section 4999 of the Code.

      6. SECTION 401(k) PLAN. The Executive will no longer be eligible to make
contributions to the AGT 401(k) Plan (the "401(K) PLAN") after the Closing Date.
On the Closing Date or as soon as practicable thereafter (and consistent with
the terms of the 401(k) Plan), the Executive's contributions to the 401(k) Plan,
if any, will be distributed to him or left in the 401(k) Plan in accordance with
his instructions and the provisions of the 401(k) Plan.

      7. CONTINUATION OF INDEMNIFICATION OBLIGATIONS AND D&O INSURANCE. Except
for any claims brought by AGT under Section 8 hereof for an indemnification
payment, from and after the Closing Date, the Executive shall continue to be
entitled to indemnification for the periods prior to the Closing Date that he
was an "Officer" of the Company in accordance with the Company's By-Laws as in
effect on the Effective Date notwithstanding any subsequent amendment to such
By-Laws. Further, from and after the Closing Date, AGT shall not take any action
for the purpose of excluding the Executive from continuing to be covered under
any directors, officers and corporate liability insurance policies existing as
of the Effective Date through the end of the policy periods stated therein.

      8. INDEMNIFICATION.

            (a) Pursuant to Section 11.2 of the Purchase Agreement, AGT is
obligated to indemnify and hold harmless Fuji, its affiliates and the officers,
directors, employees, agents, successors and assigns of Fuji from any Losses (as
defined in the Purchase Agreement), subject to certain thresholds, caps on
liability, procedures, time limits and other terms and conditions. In the event
that AGT receives notice of a claim under Section 11.2 of the Purchase Agreement
that might give rise to liability under Section 8(b) below, it shall promptly
give written notice thereof to the Executive.
<PAGE>   4
            (b) If AGT makes an indemnification payment to Fuji pursuant to
Section 11.2 of the Purchase Agreement for any Losses based on any such
representations or warranties in the Purchase Agreement being false, inaccurate
or otherwise breached, then to the extent that such indemnification payment is
(i) for misrepresentations or a breach of warranties contained in Sections 6.7,
6.8 (but only with respect to any vehicle leases), 6.13(a), 6.15, 6.18(a) and
6.19 of the Purchase Agreement or (ii) for misrepresentations or breaches of
warranties in Sections 6.5, 6.6, 6.8 (but with respect to all leases other than
vehicle leases) and 6.16 of the Purchase Agreement, of which the Executive had
actual knowledge, without any inquiry, then the Executive shall promptly
reimburse AGT for the Executive's Allocable Share of such Losses less the
Executive's Allocable Share Threshold, up to a maximum amount equal to the
Executive's Allocable Share Cap. Notwithstanding the foregoing, the Executive's
Allocable Share Cap shall not apply if the limitation on AGT's liability for a
misrepresentation or breached warranty pursuant to Section 11.6(b) of the
Purchase Agreement does not apply due to fraud by Executive which causes AGT to
misrepresent or breach any of the warranties in Sections 6.5, 6.6, 6.7, 6.8,
6.13(a), 6.15, 6.16, 6.18(a) and 6.19. As used herein, the following terms shall
apply:

            The "EXECUTIVE'S ALLOCABLE SHARE" shall equal the quotient obtained
by dividing the sum of the Executive Payments made hereunder by $22,500,000.

            The "EXECUTIVE'S ALLOCABLE SHARE CAP" shall equal $2,250,000
multiplied by the quotient obtained by dividing the sum of the Executive
Payments by $22,500,000.

            The "EXECUTIVE'S ALLOCABLE SHARE THRESHOLD" shall equal $100,000
multiplied by the quotient obtained by dividing the sum of the Executive
Payments by $22,500,000.

            (c) AGT agrees that it will not modify or amend any of the
representations or warranties in the Purchase Agreement or any corresponding
disclosure schedules annexed to the Purchase Agreement, without the prior
written consent of the Executive.

            (d) AGT hereby represents and warrants that it has provided to the
Executive a true and complete copy of the Purchase Agreement, including all
exhibits and schedules thereto, for his review prior to the execution and
delivery thereof by AGT. AGT acknowledges that the Executive does not make any
representations or warranties with respect to any of the representations or
warranties in the Purchase Agreement other than those specifically set forth in
Section 8(b) above.

      9. TERMINATION OF NON-COMPETITIVE, NON-SOLICITATION AND CONFIDENTIALITY.

            (a) AGT hereby acknowledges and confirms that if, and to the extent
that, that certain Non-Competition, Non-Solicitation and Confidentiality
Agreement entered into by AGT and the Executive on April 11, 1996 (the
"NON-COMPETITION AGREEMENT") is currently in effect, then as of the Closing
Date, such agreement shall be terminated and of no further force or effect.

            (b) If during the four (4) year period subsequent to the Closing
Date (the "RESTRICTED PERIOD"), the Executive is not employed by Fuji, then he
shall not during the Restricted Period, whether alone or in association with any
other person, directly or indirectly, (i) engage in a Competing Business; 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 Competing Business; provided, however, that the foregoing shall not
prohibit the Executive from owning securities of any publicly traded company
that is engaged in any such business, as long as the Executive does not own at
any time 5% or more of any class of the equity securities of such company.

<PAGE>   5

      As used herein, "COMPETING BUSINESS" means any business directly involved
in software development for electronic imaging applications and the marketing
and licensing of electronic imaging applications and services related thereto of
a type that competes directly with the services provided by AGT as of the
Closing Date for users that comprise any customer of AGT or any publishers,
retailers, catalogers, advertising agencies, entertainment companies, automotive
manufacturers and dealers, consumer goods manufacturers, pharmaceutical
manufacturers, cosmetics distributors, and financial institutions (excluding
from the definition of Competing Business specifically the Fuji E-Photo
Business, (as defined in the Purchase Agreement) at such time or times as the
Executive has a consulting arrangement with Fuji).

            (c) AGT's sole remedy with respect to any breach of Section 9(b)
shall be limited to injunctive or other equitable relief and to any damages
incurred by AGT due to the breach. AGT specifically acknowledges that the
Executive Payments are not being paid solely in consideration for the covenants
set forth in Section 9(b) and that the amount of such payments shall not have
any bearing on any damages that AGT may become entitled to recover due to a
material breach of Section 9(b).

      10.   MUTUAL RELEASES.

            (a) Upon payment in full of the Executive Payments, the Executive,
on behalf of himself, his family, attorneys, heirs, estate, agents, executors,
representatives, administrators and each of their respective successors and
assigns, shall release AGT and its present, former and future parent companies,
subsidiaries and affiliates, and officers, directors, agents, successors and
assigns of each of them (collectively, the "AGT Parties") from any and all
liability for any claims against AGT as of the Closing Date, whether known or
unknown to him that may arise under express or implied contract, federal, state,
or local statute, executive order, law, ordinance, tort or other obligations
arising out of public policy. This release will include but is not limited to
any claims for discrimination on the basis of race, color, sex, national origin,
religion, disability, age, marital status and veteran status, including, but not
limited to, any claims arising under Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1966, The Civil Rights Act of 1991, of the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit Protection
Act of 1990, the Family and Medical Leave Act of 1993, the Employee Retirement
Income Security Act, the Americans with Disabilities Act of 1990, the Fair Labor
Standards Act of 1938, and the New York State Human Rights Law, in all cases
arising out of or relating to Executive's employment by AGT or investment in AGT
or his services as an officer or employee of AGT, or otherwise relating to the
termination of such employment or services; provided, however, that nothing in
this release shall be construed to bar claims based on (i) breaches of this
Agreement, (ii) the Executive's rights to indemnification from AGT in respect of
his services as a officer or employee of AGT provided by law or any certificates
of incorporation or by-laws (or like constitutive documents) of AGT or (iii)
fraud or any criminal action. This Agreement does not constitute any admission
by AGT that it has violated any such law or legal obligation with respect to any
aspect of the Executive's employment or termination therefrom. The Executive
further agrees not to sue or otherwise institute or cause to be instituted or in
any way participate in legal or administrative proceedings against AGT with
respect to any of these claims (excluding claims brought under proviso (i), (ii)
or (iii) above.
<PAGE>   6
            (b) In consideration of Executive's resignation and other
consideration provided hereunder, on the Closing Date, AGT on its behalf, and to
the extent applicable, on behalf of each of the AGT Parties, shall remise,
release and discharge Executive, his successors and assigns (collectively, the
"EXECUTIVE PARTIES") from any and all debts, demands, actions, causes of action,
suits, claims or liabilities of any kind, both at law and in equity, which any
of the AGT Parties now have, known or unknown, suspected or unsuspected, against
any of the Executive Parties that may be alleged to arise out of or in
connection with Executive's employment by AGT or investment in AGT or his
services as an officer or employee of AGT, or otherwise relating to the
termination of such employment or services; provided however, nothing in the
release shall be construed to bar claims (i) for breaches of this Agreement or
(ii) alleged fraud or any criminal action. AGT further agrees not to sue or
otherwise institute or cause to be instituted or in any way participate in legal
or administrative proceedings against Executive with respect to any of these
claims (excluding claims brought under proviso (i) or (ii) above). The reference
to AGT in this Section 10(b) includes all of AGT's direct and indirect
subsidiaries and affiliates.

      11. EXECUTIVE'S REPRESENTATIONS AND WARRANTIES. As a condition precedent
to the Executive Payments, the Executive represents and acknowledges to AGT that
as of the date hereof and the Closing Date: (a) he has not filed or caused to be
filed any lawsuits against AGT in any Court whatsoever; (b) he has not filed or
caused to be filed any charges or complaints against AGT with any municipal,
state or federal agency charged with the enforcement of any law, (c) pursuant to
and as a part of the Executive's complete, total and irrevocable release and
discharge of AGT (subject to the exceptions set forth in Sections 10(a)(i), (ii)
and (iii)), the Executive agrees, to the fullest extent permitted by law, not to
file or cause to be filed a charge, complaint, grievance, or demand for
arbitration in any forum, which relates to any matter that involves AGT (subject
to the exceptions set forth in Sections 10(a)(i), (ii) and (iii)) and that
occurred on or before the Closing Date and (d) upon receipt of the Executive
Payments and the other compensation due him during the Interim Period, AGT shall
not owe him any wages, commissions, bonuses, sick pay, personal leave pay,
holiday pay, severance pay, vacation pay, tuition reimbursement, stock options,
auto allowance, or other compensation or benefits or payments or forms of
remuneration of any kind or nature other than his balance in the 401(k) Plan.

      12. AGT'S REPRESENTATIONS AND WARRANTIES. AGT represents, warrants and
acknowledges to Executive that: (a) it has the corporate power and authority to
enter into this Agreement and to carry out its respective obligations hereunder;
(b) the execution, delivery and performance of this Agreement by AGT and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of AGT; and (c) this Agreement is valid and
binding obligation of AGT, enforceable against it in accordance with its terms,
except as the enforceability thereof may be limited to bankruptcy, insolvency,
reorganization, moratorium, and other laws now or hereafter in effect relating
to the enforcement of creditors' rights and generally.

      13. NO WAIVER. The failure of the Executive or AGT to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver thereof, or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

      14. ENTIRE AGREEMENT. This Agreement integrates the whole of all
agreements and understandings of any sort or character between the parties
concerning the subject matter of this Agreement and any other dealings between
the parties, and supersedes all prior negotiations, discussions, or agreements
of any sort whatsoever relating to the subject matter hereof, or any claims that
might have ever been made by one party against any opposing party to this
Agreement. There are no representations, agreements, or inducements except as
<PAGE>   7
set forth expressly and specifically in this Agreement. All prior employment
contracts, if any, between the parties are superseded by this Agreement. There
are no unwritten oral, or verbal understandings, agreements, or representations
of any sort whatsoever, it being stipulated that the rights of the parties shall
be governed exclusively by this Agreement.

      15. ABSOLUTE AND INDEPENDENT OBLIGATIONS. Notwithstanding anything herein
or elsewhere to the contrary, the Executive Payments shall not be subject to any
right of offset or any other deduction of any kind, but shall be absolute
obligations of AGT, independent of any other terms in this Agreement or any
other agreement between the Executive and AGT, subject only to the Executive's
resignation provided for in Section 2(a) above and the consummation of the
Closing.

      16. REIMBURSEMENT OF ATTORNEY'S FEES AND COSTS. On the Closing Date, AGT
shall pay Executive's legal fees and other professional expenses incurred in
connection with the transactions contemplated under the Purchase Agreement,
including the negotiation and preparation of this Agreement and any employment
agreement with Fuji, provided that such amount together with all such similar
amounts incurred by the other Key Employees does not exceed $50,000 in the
aggregate.

      17. MISCELLANEOUS. The law of the State of New York will control any
questions concerning the validity and interpretation of this Agreement, without
regard to principles of conflicts of law. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors,
assigns, heirs, executors and legal representatives. This Agreement may not be
changed or altered, except by a writing signed by the Executive and an
authorized officer of AGT. This Agreement may be signed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument. Each party
may execute this Agreement by signing any number of such counterparts.

           [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY OMITTED]
<PAGE>   8
      IN WITNESS WHEREOF, AGT and the Executive have executed this Agreement as
of the day and year first above written.

                              _____________________________________________

                              Scott Brownstein

                              APPLIED GRAPHICS TECHNOLOGIES, INC.

                              By:__________________________________________

                              Name:

                              Title:

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