exv10w2



 






Exhibit 10.2




AMERICAN REPROGRAPHICS COMPANY ANNOUNCES

REFINANCING OF SECOND LIEN CREDIT AGREEMENT




~ New Debt Structure Provides Credit At More Favorable Rates ~



GLENDALE,
California (December 21, 2005) — American Reprographics Company (NYSE: ARP), the
nation’s leading provider of reprographic services and technology, today announced the refinancing
of its Second Lien Credit and Guaranty Agreement, which will save the Company more than $8 million
annually on a pre-tax basis under the new interest rate and current outstanding balance. The
Company expanded its first lien credit facility to pay off in full the borrowings under the
original second lien credit facility.



S. “Mohan” Chandramohan, Chairman and Chief Executive Officer of American Reprographics Company
said, “We’ve been eagerly anticipating the reduction of prepayment penalties on our second lien
debt agreement in order to restructure our credit facilities and lower our interest payments. We
are gratified to have completed the refinancing before the end of the year. The new debt structure
will give us greater financial flexibility going forward as it strengthens our capital structure
and supports the company’s short and long-term operational goals.”



The amended first lien credit agreement provides for senior secured credit facilities aggregating
up to $310,600,000, consisting of a $280,600,000 term loan facility and a $30,000,000 revolving
credit facility. The Company used proceeds from the completed incremental new term loan, in the
amount of $157,500,000, to prepay in full all principal and interest payable under the Second Lien
Credit and Guaranty Agreement dated December 18, 2003. The remaining balance of $50,000,000 in the
increased term loan facility is available for the Company’s use subject to the terms of the
amended first lien credit facility.



The Company’s obligations are guaranteed by its domestic subsidiaries and, subject to certain
limited exceptions, are secured by first priority security interests granted in all of the
Company’s and the guarantor’s personal and real property, and 65% of the assets of its foreign
subsidiaries. Term loans are amortized over the term with the final payment due June 18, 2009.
Amounts borrowed under the revolving credit facility must be repaid by December 18, 2008.



In the fourth quarter of 2005, American Reprographics Company will incur pre-tax prepayment
penalties of approximately $4 million associated with the pay-off of the borrowings under the
Second Lien Credit and Guaranty Agreement. During the same period the Company will also write off
pre-tax deferred financing costs of approximately $5.3 million associated with the amended first
lien credit agreement.




About American Reprographics Company



American Reprographics Company is the leading reprographics company in the United States providing
business-to-business document management services to the architectural, engineering and
construction, or AEC industries. The Company provides these services to companies in non-AEC
industries, such as technology, financial services, retail, entertainment, and food and
hospitality, which also require sophisticated document management services. American Reprographics
Company provides its core services through its suite of reprographics technology products, a
network of more than 200 locally-branded reprographics service centers across the U.S., and on-site
at their customers’ locations. The Company’s service centers are arranged in a hub and satellite
structure and are digitally connected as a cohesive network, allowing the provision of services
both locally and nationally to more than 65,000 active customers.




Forward-Looking Statements Disclaimer



This press release contains forward-looking statements that fall within the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995 regarding future events and the
future financial


 









 








performance of the Company. Words such as “believe,” “expect,” “may,” “anticipate” and similar
expressions also identify forward-looking statements. Forward-looking statements include
statements regarding positive operating or financial results due to changes in the Company’s
capital structure, favorable overall macroeconomic trends, positive trends in the architectural,
engineering and construction industries, our continuing to open new locations and entrance into new
markets, continued success in implementing our major strategic initiatives, and 2005 revenue and
earnings per share estimates. We wish to caution you that such statements are only predictions and
actual results may differ materially as a result of risks and uncertainties that pertain to our
business. These risks and uncertainties include, among others:





	     •	 	Future downturns in the architectural, engineering and construction industries could
diminish demand for our products and services






	     •	 	Competition in our industry and innovation by our competitors may hinder our ability
to execute our business strategy and maintain our profitability






	     •	 	Failure to anticipate and adapt to future changes in our industry could harm our
competitive position






	     •	 	Failure to manage our acquisitions, including our inability to integrate and merge
the business operations of the acquired companies, and failure to retain key personnel and
customers of acquired companies could have a negative affect on our future performance,
results of operations and financial condition






	     •	 	Dependence on certain key vendors for equipment, maintenance services and supplies,
could make us vulnerable to supply shortages and price fluctuations






	     •	 	Damage or disruption to our facilities, our technology centers, our vendors or a
majority of our customers could impair our ability to effectively provide our services and
may have a significant impact on our revenues, expenses and financial condition






	     •	 	If we fail to continue to develop and introduce new services successfully, our
competitive positioning and our ability to grow our business could be harmed.




The foregoing list of risks and uncertainties is illustrative but is by no means exhaustive. For
more information on factors that may affect future performance, please review our SEC filings,
specifically our Quarterly Report on Form 10-Q for the quarters ended September 30, 2005, June 30,
2005 and March 31, 2005, our Annual Report on Form 10-K for the year ended December 31, 2004 and
our final prospectus dated February 3, 2005. These documents contain important risk factors that
could cause actual results to differ materially from those contained in our projections or
forward-looking statements. These forward-looking statements are based on information as of
December 21, 2005, and except as required by law, the Company undertakes no obligation to update or
revise any forward-looking statements.