Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies

Note 12 Commitments and Contingencies

Leases. Minimum future obligations under all non-cancelable operating leases as of December 31, 2012 are as follows (in thousands):

	Operating     Leases
2013	$	10,699
2014		7,336
2015		3,788
2016		2,501
2017		2,074
Thereafter		5,099
Total minimum lease payments	$	31,497

Rent expense for operating leases charged to operations was as follows (in thousands):

	Year Ended December 31,
		2012		2011		2010
Rent expense	$	15,254	$	13,907	$	11,469

The operating lease information includes a variety of properties around the world. These properties are used as manufacturing facilities, distribution centers and sales offices. Lease terms range from one year to 9 years with breaking periods specified in the lease agreements.

Letters of Credit. In connection with various customer contracts, Zebra has entered into two letters of credit agreements with a bank. The contingent liability of Zebra under these agreements as of December 31, 2012, is $482,000. See below for letters of credit related to our revolving credit agreement.

Revolving Credit Agreement. On October 10, 2012, Zebra entered into a revolving credit agreement for a five-year $250,000,000 revolving credit facility with a syndicate of banks led by J. P. Morgan Securities LLC as Administrative Agent. The funds under this credit facility are available for general corporate purposes of Zebra and its subsidiaries in the ordinary course of business and other purposes permitted by the agreement.

This credit agreement is guaranteed by certain of Zebra’s domestic subsidiaries. Loans under the agreement bear interest at a rate equal to a spread over the base rate, which base rate is the greater of: the prime rate, the Federal Funds Effective Rate plus one-half of one percent (0.50%), or an adjusted LIBOR rate, plus one percent (1%). The spread is dependent on Zebra’s ratio of Total Debt to EBITDA, and ranges from 0.25% to 1.75%. The spread in effect at closing for prime rate and Federal Funds based loans was 0.00%. The spread for LIBOR-based loans ranges from 1.00% to 1.75%. The spread in effect at closing for LIBOR-based loans was 1.00%. Zebra did not make any barrow any monies under the New Credit Agreement at the time of closing.

The credit agreement includes customary representations, warranties, affirmative and negative covenants and events of default. It also contains financial covenants tied to Zebra’s leverage ratio and interest coverage ratio. As of December 31, 2012, we had established letters of credit amounting to $2,300,000, which reduce the funds available for borrowing under the agreement. As of December 31, 2012 and 2011, no amounts were outstanding under the company’s credit agreement.

The credit agreement above replaced Zebra’s August 2008 five year $100,000,000 credit agreement.

Legal Proceedings. We are subject to a variety of investigations, claims, suits and other legal proceedings that arise from time to time in the ordinary course of business, including but not limited to, intellectual property, employment, tort and breach of contract matters. We currently believe that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on our business, cash flows, financial position, or results of operations. Any legal proceedings are subject to inherent uncertainties, and management’s view of these matters and their potential effects may change in the future.