10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 29, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 000-19406

Zebra Technologies Corporation

(Exact name of registrant as specified in its charter)

Delaware	36-2675536
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

475 Half Day Road, Suite 500, Lincolnshire, IL 60069

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (847) 634-6700

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of October 26, 2012, there were 50,858,051 shares of Class A Common Stock, $.01 par value, outstanding.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

QUARTER ENDED SEPTEMBER 29, 2012

INDEX

		PAGE
PART I - FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets as of September 29, 2012 (unaudited) and December 31, 2011		3
	Consolidated Statements of Earnings (unaudited) for the three and nine months ended September 29, 2012 and October 1, 2011		4
	Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 29, 2012 and October 1, 2011		5
	Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 29, 2012 and October 1, 2011		6
	Notes to Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		35
Item 4.	Controls and Procedures		36
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings		37
Item 1A.	Risk Factors		37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		37
Item 6.	Exhibits		38
SIGNATURES			39

2

PART I - FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

	September 29, 2012			December 31, 2011
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	52,253		$	36,418
Investments and marketable securities		160,690			182,398
Accounts receivable, net		165,160			155,230
Receivable from buyer		0			27,580
Inventories, net		122,915			133,288
Deferred income taxes		15,506			13,931
Income tax receivable		0			13,111
Prepaid expenses and other current assets		14,454			22,917
Total current assets		530,978			584,873
Property and equipment at cost, less accumulated depreciation and amortization		102,537			97,822
Long-term deferred income taxes		7,536			11,866
Goodwill		95,345			79,703
Other intangibles, net		39,017			12,667
Long-term investments and marketable securities		155,852			107,879
Other assets		9,425			4,196
Total assets	$	940,690		$	899,006
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	28,180		$	33,273
Accrued liabilities		50,568			64,612
Deferred revenue		12,288			11,089
Income taxes payable		2,031			0
Total current liabilities		93,067			108,974
Deferred rent		1,406			1,592
Other long-term liabilities		13,188			11,515
Total liabilities		107,661			122,081
Stockholders’ equity:
Preferred Stock		0			0
Class A Common Stock		722			722
Additional paid-in capital		136,750			131,422
Treasury stock		(628,683	)		(596,622	)
Retained earnings		1,333,530			1,245,616
Accumulated other comprehensive loss		(9,290	)		(4,213	)
Total stockholders’ equity		833,029			776,925
Total liabilities and stockholders’ equity	$	940,690		$	899,006

See accompanying notes to consolidated financial statements.

3

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Net sales
Net sales of tangible products	$	239,786		$	241,686		$	706,970		$	700,568
Revenue from services and software		12,251			11,652			36,019			35,612
Total net sales		252,037			253,338			742,989			736,180
Cost of sales
Cost of sales of tangible products		118,751			122,529			357,764			351,042
Cost of services and software		6,362			7,256			18,041			19,889
Total cost of sales		125,113			129,785			375,805			370,931
Gross profit		126,924			123,553			367,184			365,249
Operating expenses:
Selling and marketing		32,321			31,942			96,593			91,420
Research and development		22,007			22,584			64,759			66,752
General and administrative		22,481			18,978			71,203			62,372
Amortization of intangible assets		1,670			843			3,210			2,514
Acquisition costs		566			188			2,072			188
Exit and restructuring costs		0			138			0			2,090
Asset impairment charge		9,114			0			9,114			0
Total operating expenses		88,159			74,673			246,951			225,336
Operating income		38,765			48,880			120,233			139,913
Other income (expense):
Investment income		541			134			1,959			1,350
Foreign exchange loss		(514	)		(173	)		(936	)		(1,300	)
Other, net		(294	)		(859	)		(1,144	)		(1,356	)
Total other income (expense)		(267	)		(898	)		(121	)		(1,306	)
Income from continuing operations before income taxes		38,498			47,982			120,112			138,607
Income taxes		11,917			13,795			33,014			41,123
Income from continuing operations		26,581			34,187			87,098			97,484
Income from discontinued operations, net of tax		516			10,814			816			42,115
Net income	$	27,097		$	45,001		$	87,914		$	139,599
Basic earnings per share:
Income from continuing operations	$	0.52		$	0.64		$	1.68		$	1.79
Income from discontinued operations		0.01			0.20			0.02			0.77
Net income	$	0.53		$	0.84		$	1.70		$	2.56
Diluted earnings per share:
Income from continuing operations	$	0.51		$	0.64		$	1.67		$	1.78
Income from discontinued operations		0.01			0.20			0.02			0.77
Net income	$	0.52		$	0.84		$	1.69		$	2.55
Basic weighted average shares outstanding		51,566			53,339			51,775			54,405
Diluted weighted average and equivalent shares outstanding		51,809			53,628			52,041			54,770

See accompanying notes to consolidated financial statements.

4

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Net income	$	27,097		$	45,001		$	87,914		$	139,599
Other comprehensive income (loss):
Unrealized gains (losses) on hedging transactions, net of income taxes		(3,946	)		5,615			(6,192	)		2,838
Unrealized holding gains (losses) on investments, net of income taxes		392			(636	)		917			(303	)
Foreign currency translation adjustment		12			173			198			(630	)
Comprehensive income	$	23,555		$	50,153		$	82,837		$	141,504

See accompanying notes to consolidated financial statements.

5

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Nine Months Ended
	September 29, 2012			October 1, 2011
Cash flows from operating activities:
Net income	$	87,914		$	139,599
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		18,906			17,985
Equity-based compensation		11,485			11,060
Asset impairment charge		9,114			0
Impairment of investments		0			326
Excess tax benefit from equity-based compensation		(1,492	)		(1,265	)
Loss on sale of property and equipment		178			53
Gain on sale of business		(613	)		(66,753	)
Deferred income taxes		2,755			5,703
Changes in assets and liabilities:
Accounts receivable, net		(6,108	)		(10,112	)
Inventories, net		11,981			(6,635	)
Other assets		12,070			(10,150	)
Accounts payable		(10,843	)		(8,493	)
Accrued liabilities		(11,341	)		(14,917	)
Deferred revenue		2,644			(16,707	)
Income taxes		14,711			(7,087	)
Other operating activities		(6,378	)		2,116
Net cash provided by operating activities		134,983			34,723
Cash flows from investing activities:
Purchases of property and equipment		(17,140	)		(17,829	)
Proceeds from the sale of business		27,580			161,206
Acquisition of business, net of cash acquired		(59,874	)		0
Acquisition of intangible assets		(3,000	)		(200	)
Purchase of long-term equity investment		(5,000	)		0
Purchases of investments and marketable securities		(483,349	)		(791,811	)
Maturities of investments and marketable securities		324,139			493,649
Proceeds from sales of investments and marketable securities		133,863			253,377
Net cash provided by (used in) investing activities		(82,781	)		98,392
Cash flows from financing activities:
Purchase of treasury stock		(39,697	)		(146,373	)
Proceeds from exercise of stock options and stock purchase plan purchases		1,909			9,197
Excess tax benefit from equity-based compensation		1,492			1,265
Net cash used in financing activities		(36,296	)		(135,911	)
Effect of exchange rate changes on cash		(71	)		(899	)
Net increase in cash and cash equivalents		15,835			(3,695	)
Cash balance of discontinued operations at beginning of period		0			1,301
Less: Cash balance of discontinued operations at end of period		0			0
Cash and cash equivalents at beginning of period		36,418			46,175
Cash and cash equivalents at end of period	$	52,253		$	43,781
Supplemental disclosures of cash flow information:
Income taxes paid	$	16,773		$	53,512

See accompanying notes to consolidated financial statements.

6

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Basis of Presentation

Management prepared these unaudited interim consolidated financial statements for Zebra Technologies Corporation and subsidiaries (“Zebra”) according to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. These financial statements do not include all of the information and footnotes required by United States generally accepted accounting principles (“GAAP”) for complete financial statements. Therefore, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in Zebra’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

The consolidated balance sheet as of December 31, 2011 included in this Form 10-Q is taken from the audited consolidated balance sheet in our Form 10-K. These interim financial statements include all adjustments (of a normal, recurring nature) necessary to present fairly Zebra’s consolidated financial position as of September 29, 2012, the consolidated statement of earnings for the three and nine months ended September 29, 2012 and October 1, 2011, consolidated statement of comprehensive income for the three and nine months ended September 29, 2012 and October 1, 2011, and the consolidated statement of cash flows for the nine months ended September 29, 2012 and October 1, 2011. These results, however, are not necessarily indicative of results for the full year.

Reclassifications. Prior-period amounts will differ from amounts previously reported because certain immaterial amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation.

Note 2 – Fair Value Measurements

Financial assets and liabilities are to be measured using inputs from three levels of the fair value hierarchy. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Zebra uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs (i.e. U.S. Treasuries and money market funds).

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in the assessment of fair value. Included in our investment portfolio at September 29, 2012, is an auction rate security which is classified as available for sale and is reflected at fair value. Due to events in credit markets, however, the auction event for the instrument held by Zebra is failed. Therefore, the fair value of this security is estimated utilizing broker quotations, discounted cash flow analysis or other types of valuation adjustment methodologies at September 29, 2012. These analyses consider, among other items, the collateral underlying the security instruments, the creditworthiness of the counterparty, the timing of expected future cash flows, estimates of the next time the security is expected to have a successful auction, and Zebra’s intent and ability to hold such securities until credit markets improve. The security was also compared, when possible, to other securities with similar characteristics.

The decline in the market value of our auction rate security discussed above is considered temporary and has been recorded in accumulated other comprehensive income loss on Zebra’s balance sheet. Since Zebra has the intent and ability to hold this auction rate security until it is sold at auction, redeemed at carrying value or reaches maturity, we have classified it as a long-term investment on the balance sheet.

7

Financial assets and liabilities carried at fair value as of September 29, 2012, are classified below (in thousands):

	Level 1		Level 2			Level 3		Total
Assets:
U.S. government and agency securities	$	80,885	$	12,491		$	0	$	93,376
Obligations of government-sponsored enterprises (1)		0		5,048			0		5,048
State and municipal bonds		0		101,024			0		101,024
Corporate securities		0		114,470			2,588		117,058
Other investments		0		36			0		36
Investments subtotal		80,885		233,069			2,588		316,542
Money market investments related to the deferred compensation plan		3,424		0			0		3,424
Total assets at fair value	$	84,309	$	233,069		$	2,588	$	319,966
Liabilities:
Forward contracts (2)	$	1,843	$	(767	)	$	0	$	1,076
Liabilities related to the deferred compensation plan		3,424		0			0		3,424
Total liabilities at fair value	$	5,267	$	(767	)	$	0	$	4,500

Financial assets and liabilities carried at fair value as of December 31, 2011, are classified below (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
U.S. government and agency securities	$	25,540	$	25,307	$	0	$	50,847
Obligations of government-sponsored enterprises (1)		0		16,612		0		16,612
State and municipal bonds		0		142,873		0		142,873
Corporate securities		0		77,321		2,588		79,909
Other investments		0		36		0		36
Investments subtotal		25,540		262,149		2,588		290,277
Forward contracts (2)		2,626		6,584		0		9,210
Money market investments related to the deferred compensation plan		3,199		0		0		3,199
Total assets at fair value	$	31,365	$	268,733	$	2,588	$	302,686
Liabilities:
Liabilities related to the deferred compensation plan	$	3,199	$	0	$	0	$	3,199
Total liabilities at fair value	$	3,199	$	0	$	0	$	3,199

(1) Includes investments in notes issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Farm Credit Banks, and the Federal Home Loan Bank.

(2) The fair value of contracts are calculated as follows:

a. Fair value of a collar or put option contract associated with forecasted sales hedges are calculated using bid and ask rates for similar contracts.

b. Fair value of regular forward contracts associated with forecasted sales hedges are calculated using the period-end exchange rate adjusted for current forward points.

c. Fair value of balance sheet hedges are calculated at the period end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at period end. If this is the case, the fair value is calculated at the rate at which the hedge is being settled.

8

The following table presents Zebra’s activity for assets measured at fair value on a recurring basis using significant unobservable inputs, Level 3, for the following periods (in thousands):

	Nine Months Ended
	September 29, 2012		October 1, 2011
Balance at beginning of the year	$	2,588	$	5,597
Transfers to Level 3		0		0
Total losses (realized or unrealized):
Included in earnings		0		(362	)
Included in other comprehensive income (loss)		0		317
Purchases and settlements (net)		0		(2,964	)
Balance at end of period	$	2,588	$	2,588
Total gains and (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets still held at end of period	$	0	$	0

The following is a summary of current and long-term investments (in thousands):

	As of September 29, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	93,286	$	90	$	0		$	93,376
Obligations of government-sponsored enterprises		5,037		11		0			5,048
State and municipal bonds		100,836		202		(14	)		101,024
Corporate securities		116,791		802		(535	)		117,058
Other investments		36		0		0			36
Total investments	$	315,986	$	1,105	$	(549	)	$	316,542

	As of December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	50,738	$	115	$	(6	)	$	50,847
Obligations of government-sponsored enterprises		16,581		32		(1	)		16,612
State and municipal bonds		142,586		330		(43	)		142,873
Corporate securities		81,132		164		(1,387	)		79,909
Other investments		36		0		0			36
Total investments	$	291,073	$	641	$	(1,437	)	$	290,277

The maturity dates of investments are as follows (in thousands):

	As of September 29, 2012
	Amortized Cost		Estimated Fair Value
Less than 1 year	$	160,523	$	160,690
1 to 5 years		150,818		151,579
6 to 10 years		4,645		4,273
Thereafter		0		0
Total	$	315,986	$	316,542

The carrying value for Zebra’s financial instruments classified as current assets and current liabilities approximate fair value due to their short maturities.

9

Note 3 – Investments and Marketable Securities

We classify our investments in marketable debt securities as available-for-sale. As of September 29, 2012, all of our investments in marketable debt securities with maturities greater than one year are classified as long-term investments on the balance sheet due to our ability and intent to hold them until maturity.

Changes in the market value of available-for-sale securities are reflected in the accumulated other comprehensive income caption of stockholders’ equity in the balance sheet, until we dispose of the securities. Once these securities are disposed of, either by sale or maturity, the accumulated changes in market value are transferred to investment income. On the statement of cash flows, changes in the balances of available-for-sale securities are shown as purchases, sales and maturities of investments and marketable securities under investing activities.

Changes in market value of trading securities would be recorded in investment income as they occur, and the related statement of cash flows would include changes in the balances of trading securities as operating cash flows. See Note 15 Other Comprehensive Income.

In the second quarter of 2012 Zebra acquired a 2.7% interest in a venture capital technology company for $5,000,000. This investment is classified as a long term asset.

Included in Zebra’s cash and investments and marketable securities are amounts held by foreign subsidiaries which are generally invested in U.S. dollar-denominated holdings. Zebra had foreign cash and investments of $153,693,000 as of September 29, 2012, and $96,829,000 as of December 31, 2011. Amounts held by foreign subsidiaries are generally subject to U.S. income taxation upon repatriation, however, Zebra does not intend to repatriate these funds.

Note 4 – Accounts Receivable

The components of accounts receivable are as follows (in thousands):

	As of
	September 29, 2012			December 31, 2011
Accounts receivable, gross	$	166,242		$	156,790
Accounts receivable reserves		(1,082	)		(1,560	)
Accounts receivable, net	$	165,160		$	155,230

Note 5 – Inventories

The components of inventories are as follows (in thousands):

	As of
	September 29, 2012			December 31, 2011
Raw material	$	38,397		$	45,795
Work in process		597			872
Deferred costs of long-term contracts		547			220
Finished goods		98,196			101,111
Inventories, gross		137,737			147,998
Inventory reserves		(14,822	)		(14,710	)
Inventories, net	$	122,915		$	133,288

Note 6 – Goodwill and Other Intangible Assets

Intangible assets are as follows (in thousands):

	As of September 29, 2012
	Gross Amount		Accumulated Amortization			Net Amount
Current technology	$	18,978	$	(11,975	)	$	7,003
Patent and patent rights		27,972		(14,175	)		13,797
Customer relationships		20,493		(2,276	)		18,217
Other intangibles, net	$	67,443	$	(28,426	)	$	39,017
Amortization expense for the nine months ended September 29, 2012			$	3,210

10

	As of December 31, 2011
	Gross Amount		Accumulated Amortization			Net Amount
Current technology	$	12,718	$	(11,403	)	$	1,315
Patent and patent rights		23,392		(12,079	)		11,313
Customer relationships		1,773		(1,734	)		39
Other intangibles, net	$	37,883	$	(25,216	)	$	12,667
Amortization expense for the nine months ended October 1, 2011			$	2,514

On July 13, 2012, we acquired intangible assets in the amount of $29,560,000 for patents, technology and customer relationships. These intangible assets have an estimated useful life ranging from 5 to 9 years. See Note 18 Business Combinations for specific information regarding the acquisition. In addition, during 2012, Zebra has paid $3,000,000 towards intangible asset commitments accrued and recorded as of December 31, 2011.

We test goodwill for impairment on an annual basis or more frequently if we believe indicators of impairment exist. Factors considered that may trigger an impairment review consist of:

• Significant underperformance relative to historical or projected future operating results,

• Significant changes in the manner of use of the acquired assets or the strategy for the overall business,

• Significant negative industry or economic trends,

• Significant decline in Zebra’s stock price for a sustained period, and

• Significant decline in market capitalization relative to net book value.

If we believe that one or more of the above indicators of impairment have occurred, we perform an impairment test. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. We generally determine the fair value of our reporting units using three valuation methods: Income Approach – Discounted Cash Flow Analysis, Market Approach – Guideline Public Company Method, and Market Approach – Comparative Transactions Method. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test to determine the amount of impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill.

We performed our annual impairment test in June 2012 and determined that our goodwill was not impaired as of the end of May 2012. Zebra has two reporting units required for its annual goodwill impairment test. As of our May 2012 testing date, the larger of the two reporting units’ fair value exceeded its carrying value by a significant amount; whereas the second, smaller reporting unit, the amount by which the fair value exceeded the carrying value ranged from approximately 8% under the Income Approach to 31% under the Market Approach. Key assumptions used in the first step of the goodwill impairment test were determined by management utilizing the internal operating plan. The key assumptions utilized included forecasted growth rates for revenues and operating expenses as well as a discount rate which is determined by looking at current risk-free rates of capital, current market interest rates, and the evaluation of risk premium relevant to the business segment. Due to the deterioration in the smaller reporting unit’s operating results during the third quarter our fair value calculation for the smaller reporting unit changed and we determined our goodwill associated with the smaller reporting unit to be impaired. The above impairment indicators led us to conclude an interim goodwill test was necessary. Zebra performed the first step of the impairment test and failed. As a result, Zebra performed a preliminary second step analysis and recorded an estimated goodwill impairment charge of $9,114,000 as of September 29, 2012. This amount is an estimate and could be adjusted upon completion of a detailed impairment analysis. After this impairment charge, there is no remaining goodwill in the smaller reporting unit.

Changes in the net carrying value amount of goodwill were as follows (in thousands):

Unamortized intangible assets:	Total
Goodwill at gross	$	180,731
Impairment charge – 2008		(101,028	)
Goodwill as of December 31, 2011		79,703
Acquisitions – LaserBand		24,756
Impairment charge – 2012		(9,114	)
Goodwill as of September 29, 2012	$	95,345

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Note 7 – Costs Associated with Exit and Restructuring Activities

In January 2011, we announced an agreement to sell a significant portion of the Zebra Enterprise Solutions (ZES) segment, which primarily consisted of Navis, to Cargotec Corporation. We retained the Location Solutions products from the former ZES, which included active RFID real-time location solutions and associated tags and readers. In the first quarter of 2011, we also announced a plan to consolidate any remaining administrative and accounting functions from the former ZES into our corporate facilities in Illinois. The costs for 2011 below represent the costs related to the consolidation and relocation of the administrative and accounting functions. We do not anticipate costs in 2012 related to this restructuring.

The following is a summary of 2011 exit and restructuring costs incurred (in thousands):

	Three Months Ended		Nine Months Ended
Type of Cost:	October 1, 2011		October 1, 2011
Severance, stay bonuses, and other employee-related expenses	$	100	$	1,171
Professional services		38		885
Relocation and transition costs		0		34
Other exit costs		0		0
Total	$	138	$	2,090

Liabilities and expenses related to exit and restructuring activities were as follows (in thousands):

	Nine Months Ended
	September 29, 2012			October 1, 2011
Balance at beginning of period	$	1,048		$	1,301
Charged to earnings		0			2,090
Cash paid		(872	)		(2,086	)
Balance at the end of period	$	176		$	1,305

Liabilities related to exit and restructuring activities are included in the accrued liabilities line item on the balance sheet. All exit costs are included in operating expenses under the line item exit and restructuring costs.

Note 8 – Derivative Instruments

In the normal course of business, portions of our operations are subject to fluctuations in currency values. Zebra and its principal subsidiaries are all designated US dollar functional currency. Certain other subsidiaries are designated in functional local currency due to legal requirements or the nature of their business.

We manage these currency risks using derivative financial instruments. Our exposure to market risk for changes in foreign currency exchange rates arises from international financing activities between subsidiaries, foreign currency denominated monetary assets and liabilities and transactions arising from international trade. Our objective is to preserve the economic value of non-functional currency denominated cash flows. We attempt to hedge transaction exposures with natural offsets to the fullest extent possible and, once these opportunities have been exhausted, through foreign exchange forward and option contracts with third parties.

Credit and market risk

Financial instruments, including derivatives, expose us to counter party credit risk for nonperformance and to market risk related to interest and currency exchange rates. We manage our exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties, and procedures to monitor concentrations of credit risk. Our counterparties in derivative transactions are commercial banks with significant experience using derivative instruments. We monitor the impact of market risk on the fair value and cash flows of our derivative and other financial instruments considering reasonably possible changes in interest rates and currency exchange rates and restrict the use of derivative financial instruments to hedging activities.

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We continually monitor the creditworthiness of our customers to which we grant credit terms in the normal course of business. The terms and conditions of our credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer.

Fair Value of Derivative Instruments

Zebra has determined that derivative instruments for hedges that have traded but have not settled are considered Level 1 in the fair value hierarchy, and hedges that have not traded are considered Level 2 in the fair value hierarchy. Derivative instruments are used to manage risk and are not used for trading or other speculative purposes, nor do we use leveraged derivative financial instruments. Our foreign currency exchange contracts are valued using broker quotations or market transactions, in either the listed or over-the-counter markets.

Hedging of Net Assets

We use forward contracts and options to manage exposure related to our pound and euro-denominated net assets. Forward contracts typically mature within three months after execution of the contracts. We record gains and losses on these contracts and options in income each quarter along with the transaction gains and losses related to our net asset positions, which would ordinarily offset each other.

Summary financial information related to these activities included in our consolidated statement of earnings as other income (expense) is as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Change in gains (losses) from foreign exchange derivatives	$	(1,649	)	$	3,108		$	(208	)	$	(3,155	)
Gains (losses) on net foreign currency assets		1,135			(3,281	)		(728	)		1,855
Foreign exchange loss	$	(514	)	$	(173	)	$	(936	)	$	(1,300	)

	As of
	September 29, 2012			December 31, 2011
Notional balance of outstanding contracts:
Pound/US dollar	£	3,412		£	6,016
Euro/US dollar	€	36,640		€	36,684
Net fair value of outstanding contracts	$	(17	)	$	(54	)

Hedging of Anticipated Sales

We manage the exchange rate risk of anticipated euro-denominated sales using purchased options, forward contracts, participating forwards and option collars. We designate these contracts as cash flow hedges which mature within twelve months after the execution of the contracts. Gains and losses on these contracts are deferred in other comprehensive income until the contracts are settled and the hedged sales are realized, the deferred gains or losses will then be reported as an increase or decrease to sales.

Summary financial information related to the cash flow hedges is as follows (in thousands):

	As of
	September 29, 2012			October 1, 2011
Unrealized gains and (losses) on hedging transactions:
Gross	$	(8,599	)	$	4,164
Income tax expense (benefit)		(2,407	)		1,326
Net	$	(6,192	)	$	2,838

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Summary financial information related to the cash flow hedges of future revenues follows (in thousands, except percentages):

	As of
	September 29, 2012			December 31, 2011
Notional balance of outstanding contracts versus the dollar	€	91,560		€	92,305
Hedge effectiveness		100	%		100	%

	Three Months Ended					Nine Months Ended
	September 29, 2012		October 1, 2011			September 29, 2012		October 1, 2011
Net gains and (losses) included in revenue	$	1,967	$	(1,487	)	$	4,616	$	(4,272	)

Forward contracts

We record our forward contracts at fair value, on our consolidated balance sheet, which are included in either of the following lines on the balance sheet, prepaid expenses, and other current assets or accrued liabilities, depending upon the fair value calculation as detailed in Note 2 of Zebra’s financial statements. The amounts recorded on our consolidated balance sheet are as follows (in thousands):

	As of
	September 29, 2012		December 31, 2011
Assets:
Prepaid expenses and other current assets	$	0	$	9,210
Total	$	0	$	9,210
Liabilities:
Accrued liabilities	$	1,076	$	0
Total	$	1,076	$	0

Note 9 – Warranty

In general, Zebra provides warranty coverage of one year on printers against defects in material and workmanship. Printheads are warranted for nine months and batteries are warranted for one year. Battery based products, such as location tags, are covered by a 30-day warranty. A provision for warranty expense is recorded at the time of shipment and adjusted quarterly based on historical warranty experience.

The following table is a summary of Zebra’s accrued warranty obligation (in thousands):

	Nine Months Ended
	September 29, 2012			October 1, 2011
Balance at the beginning of the year	$	4,613		$	4,554
Warranty expense		4,667			4,051
Warranty payments		(5,222	)		(4,115	)
Balance at the end of the period	$	4,058		$	4,490

Note 10 – Contingencies

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.

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Revolving Credit Agreement. On October 10, 2012, Zebra entered into a revolving credit agreement for a five-year $250 million 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 the 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%. This spread for LIBOR-based loans depends on our ratio of Total Debt to EBITDA, as defined in the agreement, and 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 draw or loan request under the New Credit Agreement at the time of closing.

The credit agreement includes customary representations, warranties, affirmative and negative covenants (including, among others, restrictions on the payment of cash dividends) and events of default (and related remedies, including acceleration and increased interest rates following an event of default). It also contains financial covenants tied to Zebra’s leverage ratio and interest coverage ratio.

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

Note 11 – Stockholders’ Equity

Share count and par value data related to stockholders’ equity are as follows:

	As of
	September 29, 2012		December 31, 2011
Preferred Stock
Par value per share	$	0.01	$	0.01
Shares authorized		10,000,000		10,000,000
Shares outstanding		0		0
Common Stock - Class A
Par value per share	$	0.01	$	0.01
Shares authorized		150,000,000		150,000,000
Shares issued		72,151,857		72,151,857
Shares outstanding		51,252,384		52,095,166
Treasury stock
Shares held		20,899,473		20,056,691

During the nine month period ended September 29, 2012, Zebra purchased 1,073,863 shares of common stock for $39,697,000 under a board authorized share repurchase plan, compared with purchases of 3,924,910 shares of common stock for $146,373,000 for the nine month period ended October 1, 2011.

A roll forward of Class A common shares outstanding is as follows:

	Nine Months Ended
	September 29, 2012			October 1, 2011
Balance at the beginning of the year		52,095,166			55,711,325
Repurchases		(1,073,863	)		(3,924,910	)
Stock option and ESPP issuances		176,274			453,728
Restricted share issuances		236,576			214,324
Restricted share forfeitures		(113,640	)		(14,013	)
Shares withheld for tax obligations		(68,129	)		(51,944	)
Balance at the end of the period		51,252,384			52,388,510

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Note 12 – Earnings Per Share

Earnings per share were computed as follows (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Weighted average shares:
Weighted average common shares outstanding		51,566		53,339		51,775		54,405
Effect of dilutive securities outstanding		243		289		266		365
Diluted weighted average shares outstanding		51,809		53,628		52,041		54,770
Earnings:
Income from continuing operations	$	26,581	$	34,187	$	87,098	$	97,484
Income from discontinued operations		516		10,814		816		42,115
Net income	$	27,097	$	45,001	$	87,914	$	139,599
Basic per share amounts:
Income from continuing operations	$	0.52	$	0.64	$	1.68	$	1.79
Income from discontinued operations		0.01		0.20		0.02		0.77
Net income	$	0.53	$	0.84	$	1.70	$	2.56
Diluted per share amounts:
Income from continuing operations	$	0.51	$	0.64	$	1.67	$	1.78
Income from discontinued operations		0.01		0.20		0.02		0.77
Net income	$	0.52	$	0.84	$	1.69	$	2.55

Potentially dilutive securities that were excluded from the earnings per share calculation consist of options and stock appreciation rights (SARs) with an exercise price or base price greater than the average market closing price of the Class A common stock during the respective periods. These excluded options and SARs were as follows:

	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Potentially dilutive shares		2,150,000		1,851,000		1,809,000		1,446,000

Note 13 – Equity-Based Compensation

Zebra has an equity-based compensation plan and a stock purchase plan available for future grants. Zebra recognizes compensation costs using the straight-line method over the vesting period of up to 5 years.

The compensation expense and the related tax benefit for equity-based payments were included in the Consolidated Statement of Earnings as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Cost of sales	$	287	$	218	$	820	$	755
Selling and marketing		511		333		1,271		1,107
Research and development		374		343		1,196		1,037
General and administrative		2,268		2,204		8,198		7,149
Total compensation	$	3,440	$	3,098	$	11,485	$	10,048
Income tax benefit	$	1,217	$	1,069	$	4,003	$	3,467

Cash flows resulting from the tax benefits of tax deductions in excess of the compensation cost recognized (excess tax benefits) are classified as financing cash flows in the statement of cash flows. The tax benefits classified as financing cash flows for the nine months ended September 29, 2012 was $1,492,000 and for the nine months ended October 1, 2011 was $1,265,000.

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The fair value of equity-based compensation is estimated on the date of grant using a binomial model. Volatility is based on an average of the implied volatility in the open market and the annualized volatility of Zebra stock prices over our entire stock history. Grants in the tables below include both stock options, all of which were non-qualified, and stock appreciation rights (SAR) that will be settled in Zebra stock. The following table shows the weighted-average assumptions used for grants of SARs as well as the fair value of the grants based on those assumptions:

	Nine Months Ended
	September 29, 2012			October 1, 2011
Expected dividend yield		0	%		0	%
Forfeiture rate		10.21	%		11.50	%
Volatility		35.90	%		35.33	%
Risk free interest rate		.94	%		2.01	%
Range of interest rates		0.07% - 1.95	%		0.01% - 3.18	%
Expected weighted-average life		5.48 years			5.42 years
Fair value of stock appreciation rights (SARs) granted	$	5,507,000		$	5,495,000
Weighted-average grant date fair value of SARs granted	$	12.84		$	14.29

SAR activity was as follows:

	Nine Months Ended September 29, 2012
SARs	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		1,287,724		$	28.91
Granted		428,987			38.51
Exercised		(64,582	)		23.05
Forfeited		(35,725	)		34.30
Expired		(2,011)			41.57
Outstanding at end of period		1,614,393		$	31.56
Exercisable at end of period		553,996		$	26.48
Intrinsic value of exercised SARs	$	953,020

The terms of the SARs are established under either the 2006 Incentive Compensation Plan or the 2011 Long-Term Incentive Plan (the “Plans”) and the applicable SAR agreement. Once vested, a SAR entitles the holder to receive a payment equal to the difference between the per-share base price of the SAR and the fair market value of a share of Zebra stock on the date the SAR is exercised, multiplied by the number of SARs exercised. Exercised SARs are settled in whole shares of Zebra stock, and any fraction of a share is settled in cash. The SARs granted typically vest annually in four equal amounts on each of the first four anniversaries of the grant date, with some SARs vesting over a period of five years and SAR’s granted in 2012 to non-employee directors being fully vested upon grant. Absent an early expiration due to termination of employment, all SARs expire 10 years after the grant date.

The following table summarizes information about SARs outstanding at September 29, 2012:

	Outstanding						Exercisable
Range of Exercise Prices	Number of Shares		Weighted-Average Remaining Contractual Life		Weighted-Average Exercise Price		Number of Shares		Weighted-Average Exercise Price
$ 19.56-$19.56		368,856		6.60 years	$	19.56		256,826	$	19.56
$ 21.83-$27.50		56,764		7.10 years		24.82		46,761		24.64
$ 27.82-$27.82		400,461		7.60 years		27.82		127,518		27.82
$ 28.33-$37.15		61,725		9.02 years		33.37		25,976		34.82
$ 38.79-$42.36		726,587		9.12 years		40.09		96,915		41.69
		1,614,393						553,996

	Outstanding		Exercisable
Aggregate intrinsic value	$	10,972,000	$6,257,000
Weighted-average remaining contractual term		8.1 years	7.4 years

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Stock option activity was as follows:

	Nine Months Ended September 29, 2012
Options	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		1,702,650		$	40.43
Granted		0			0.00
Exercised		(102,230	)		27.26
Forfeited		(1,663	)		36.36
Expired		(20,341	)		43.63
Outstanding at end of period		1,578,416		$	41.24
Exercisable at end of period		1,572,730		$	41.32
Intrinsic value of exercised options	$	1,090,858

The following table summarizes information about stock options outstanding at September 29, 2012:

	Outstanding						Exercisable
Range of Exercise Prices	Number of Shares		Weighted-Average Remaining Contractual Life		Weighted-Average Exercise Price		Number of Shares		Weighted-Average Exercise Price
$ 1.29-$36.49		422,223		4.78 years	$	32.84		416,537	$	33.02
$ 36.80-$41.25		378,221		4.56 years		39.78		378,221		39.78
$ 42.28-$45.62		401,316		2.99 years		44.51		401,316		44.51
$ 46.18-$51.62		374,856		2.20 years		48.63		374,856		48.63
$ 53.92-$53.92		1,800		1.66 years		53.92		1,800		53.92
		1,578,416						1,572,730

	Outstanding		Exercisable
Aggregate intrinsic value	$	1,744,000	$1,643,000
Weighted-average remaining contractual term		3.7 years	3.7 years

Restricted stock award activity was as follows:

	Nine Months Ended September 29, 2012
Restricted Stock Awards	Shares			Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		836,141		$	28.34
Granted		235,889			38.53
Released		(226,978	)		20.93
Forfeited		(113,640	)		23.26
Outstanding at end of period		731,412		$	34.72

Zebra’s restricted stock awards are expensed over the vesting period of the related award, typically three to five years. Compensation cost is calculated as the market date fair value on the grant date multiplied by the number of shares granted.

	As of September 29, 2012
Awards granted under Zebra’s equity based compensation plans:
Unearned compensation costs related to awards granted	$	21,978,000
Period expected to be recognized over		2.6 years

The fair value of the purchase rights of all Zebra employees issued under the stock purchase plan is estimated using the following weighted-average assumptions for purchase rights granted. Expected lives of three months to one year have been used along with these assumptions.

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	Nine Months Ended
	September 29, 2012			October 1, 2011
Fair market value	$	34.93		$	35.86
Option price	$	33.18		$	34.07
Expected dividend yield		0	%		0	%
Expected volatility		21	%		32	%
Risk free interest rate		0.06	%		0.09	%

Note 14 – Income Taxes

Zebra has identified, evaluated, and measured the amount of income tax benefits to be recognized for all of our income tax positions. Included in deferred tax assets are amounts related to federal and state net operating losses that resulted from our acquisition of WhereNet Corp in 2007. We intend to utilize these net operating loss carryforwards to offset future income taxes.

Zebra earns a significant amount of our operating income outside of the U.S., which is deemed to be permanently reinvested in foreign jurisdictions. Zebra does not intend to repatriate funds, however, should Zebra require more capital in the U.S. than is generated by our operations locally, Zebra could elect to repatriate funds held in foreign jurisdictions or raise capital in the U.S. through debt or equity issuances. These alternatives could result in higher effective tax rates or increased interest expense.

The U.S. federal tax return for 2011 is currently open and subject to an audit by the Internal Revenue Service. The 2007 tax return is open on a limited basis due to an amended return filed in August 2011. The tax years 2008 through 2010 remain open to examination by multiple state taxing jurisdictions. Tax authorities in the United Kingdom have completed income tax audits for tax years through 2006.

Zebra’s continuing practice is to recognize interest and/or penalties related to income tax matters as part of income tax expense. For the nine months ended September 29, 2012 and October 1, 2011, we did not accrue any interest or penalties into income tax expense.

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Effective tax rate		31.0	%		28.8	%		27.5	%		29.7	%

Zebra’s estimates of taxes for interim periods are based upon the annual effective tax rate for the full-year, adjusted for any discrete items that relate to an interim period. The estimated annual effective tax rate is determined using projections of full-year taxable income by each Zebra legal entity with the appropriate statutory tax rate for that subsidiary applied. The effective rate may change during the year, typically due to the change in our estimated taxable income by jurisdiction as each year progresses.

The 2012 effective tax rate increase in the third quarter reflects a discrete item for a nondeductible asset impairment charge which is offset by a rate decrease related to the second quarter implementation of a new structure for Zebra’s international subsidiaries. The effect of the non-deductible asset impairment charge increased the effective tax rate by 6.0% for the third quarter of 2012. Effective August 2012, the statutory tax rate in the UK declined from 25.5 % to 24.5%.

The effective income tax rate for the first nine months of 2012 was 27.5% compared with an income tax rate of 29.7% for the first nine months of 2011. The 2012 effective tax rate decline for the first nine months of 2012 compared to 2011 reflects the implementation of a new structure for Zebra’s international subsidiaries which has contributed to reducing the effective tax rate. In addition, the UK statutory rate decreased from 25.5% to 24.5% in August 2012. These reductions were offset by a discrete item in the third quarter of 2012 related to a non-deductible asset impairment charge which increased the effective tax rate for first nine months of 2012 by 2.0%. The rate in 2011 included a tax valuation allowance in the first quarter of 2011 against a subsequently disposed subsidiary.

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Note 15 – Other Comprehensive Income

Stockholders’ equity includes certain items classified as accumulated other comprehensive income, including:

• Unrealized gains (losses) on hedging transactions relate to derivative instruments used to hedge the currency exchange rates for forecasted euro sales. These hedges are designated as cash flow hedges, and we have deferred income statement recognition of gains and losses until the hedged transaction occurs. See Note 8 Derivative Instruments for more details.

• Unrealized gains (losses) on investments are deferred from income statement recognition until the gains or losses are realized.

• Foreign currency translation adjustment relates to our non-U.S. subsidiary companies that have designated a functional currency other than the U.S. dollar. We are required to translate the subsidiary functional currency financial statements to dollars using a combination of historical, period-end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of other comprehensive income.

The significant components of other comprehensive income gross and net of income tax are as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Unrealized gains (losses) on hedging transactions:
Gross	$	(5,458	)	$	8,617		$	(8,599	)	$	4,164
Income tax (benefit) expense		(1,512	)		3,002			(2,407	)		1,326
Net	$	(3,946	)	$	5,615		$	(6,192	)	$	2,838
Unrealized gains (losses) on investments:
Gross	$	556		$	(989	)	$	1,355		$	(455	)
Income tax (benefit) expense		164			(353	)		438			(152	)
Net	$	392		$	(636	)	$	917		$	(303	)

The significant components of accumulated other comprehensive income (loss) included in the Consolidated Balance Sheets are as follows (in thousands):

	As of
	September 29, 2012			December 31, 2011
Unrealized gains and (losses) on hedging transactions:
Gross	$	(1,244	)	$	7,355
Income tax (benefit) expense		(311	)		2,096
Net		(933	)		5,259
Unrealized gains and (losses) on investments classified as available-for-sale:
Gross		558			(797	)
Income tax (benefit) expense		150			(288	)
Net		408			(509	)
Foreign currency translation adjustments		(8,765	)		(8,963	)
Total accumulated other comprehensive loss	$	(9,290	)	$	(4,213	)

Note 16 – New Accounting Pronouncements

In June 2011, the FASB issued update 2011-05, ASC 220, Comprehensive Income: Presentation of Comprehensive Income and in December 2011, the FASB issued update 2011-12, ASC 220, Comprehensive Income: Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU No. 2011-12 is to defer only those changes in ASU No. 2011-05 that relate to the presentation of reclassification adjustments, while the Board is re-deliberating; entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. This standard is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard moved the Other Comprehensive Income statement disclosure from our footnote to its own financial statement for our 10-Q filings in 2012.

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In September 2011, the FASB issued update 2011-08, ASC 350, Intangibles Goodwill and Other: Testing Goodwill for Impairment. This updated guidance simplifies how companies test goodwill for impairment. Essentially, companies are no longer required to calculate the fair value of a reporting unit unless the entity determines that it is more-likely-than-not that its fair value is less than its carrying amount using a qualitative assessment. This standard is effective for fiscal years beginning after December 15, 2011. The adoption of this standard did not have any effect upon our consolidated financial statements.

In July 2012, the FASB issued update 2012-03, ASC 350, Intangibles Goodwill and Other: Testing Indefinite-Lived Intangible Assets for Impairment. This updated guidance provides entities with the option to make qualitative assessments about the likelihood that an indefinite-lived intangible asset is impaired to determine whether it should perform a quantitative impairment test. This standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. This standard will not have a material effect on our consolidated financial statements.

Note 17 Discontinued Operations

Sale of Navis, LLC - On March 18, 2011, we sold our Navis marine terminal solutions business and the related WhereNet marine terminal solutions product line of our Zebra Enterprise Solutions (“ZES”) business segment for approximately $188,588,000 in cash to Cargotec Corporation. We received $13,790,000 of the previously escrowed funds in the first quarter of 2012, and we received the remaining escrowed funds in the amount of $13,790,000 in the third quarter of 2012.

Sale of proveo AG - On August 3, 2011, we entered into a Share Purchase Agreement with F Two NV (a Belgium company) to sell all of our interest in Zebra Enterprise Solutions GmbH (formerly proveo AG) business. The loss recorded upon divestiture was $1,248,000. As part of the sale, Zebra agreed with the buyer to provide a revolving loan of up to €1,000,000 which was due August 3, 2012 and bore interest at 6.5%. Zebra realized tax benefits in the amount of $13,308,000 with the divestiture of proveo AG. These tax benefits are primarily related to the difference in book basis versus tax basis. On June 29, 2012 F Two NV (a Belgium company) sold the business and assigned the revolving loan to OBQ SA (a Luxembourg company) with Zebra’s consent. The revolving loan commitment was reduced to a lesser amount of up to €526,058. The due date for borrowings under the agreement was extended from August 3, 2012 to December 31, 2012. The interest rate remains unchanged at 6.5%.

Beginning in the first quarter of 2011, Zebra reported the results of these businesses as discontinued operations. The amounts presented below for discontinued operations include the operating results of Navis and proveo for the three and nine months ended September 29, 2012 and October 1, 2011. After the Navis sale, Zebra consolidated the remaining Location Solutions product lines.

Summary results for discontinued operations in our unaudited consolidated statement of earnings are as follows (in thousands):

	Three Months Ended					Nine Months Ended
	September 29, 2012		October 1, 2011			September 29, 2012			October 1, 2011
Net sales	$	0	$	233		$	0		$	13,945
Income (loss) from discontinued operations	$	15	$	(1,246	)	$	(135	)	$	(13,970	)
Income tax (expense) benefit		501		0			338			1,105
Gain (loss) on sale of discontinued operations		0		(1,248	)		613			66,753
Income tax (expense) benefit on sale		0		13,308			0			(11,773	)
Income from discontinued operations	$	516	$	10,814		$	816		$	42,115

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The components of cash flows of discontinued operations in our unaudited consolidated statement of cash flows are as follows (in thousands):

	Nine Months Ended
	September 29, 2012		October 1, 2011
Cash flows from discontinued operations:
Net cash used by operating activities	$	0	$	(1,301	)
Net cash provided by (used in) investing activities		0		0
Net cash provided by (used in) financing activities		0		0
Effect of exchange rate changes on cash		0		0
Net decrease in cash and cash equivalents		0		(1,301	)
Cash and cash equivalents at beginning of period		0		1,301
Cash and cash equivalents at end of period	$	0	$	0

Note 18 Business Combinations

LaserBand LLC. On July 13, 2012, Zebra acquired all of the outstanding membership interests in LaserBand LLC (a Missouri limited liability company) for $59,874,000 in cash, subject to a working capital adjustment. As part of the acquisition closing, an escrow balance of approximately $8,700,000 was established against the total purchase price.

LaserBand LLC is based in St. Louis, Missouri, and is a leader in patient identification wristbands and related products. LaserBand strengthens Zebra’s product and patent portfolio and enables Zebra to offer a wider array of products to hospitals, other healthcare organizations and other wristband customers. The consolidated financial statements include the operating results of LaserBand from the date of acquisition. Pro forma results have not been presented because the effect of the acquisition is not material to the company’s financial results.

The following table (in thousands) summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition:

	As of
	July 13, 2012
Current assets	$	6,614
Property and equipment		46
Other assets		17
Goodwill		24,756
Other intangibles		29,560
Total assets acquired	$	60,993
Current liabilities		1,119
Net assets acquired	$	59,874

On a preliminary basis pending the receipt of final valuations, the purchase price was allocated to identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values resulting in goodwill of $24,756,000. The intangible assets of $29,560,000 consist of the following (in thousands):

	Amount		Useful life
Current technology	$	6,260	5 years
Patents and patent rights		4,580	7 years
Customer relationships		18,720	5 to 9 years
Acquired other intangibles	$	29,560

The goodwill is deductible for tax purposes.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations: Third Quarter of 2012 versus Third Quarter of 2011

Consolidated Results of Operations

(Amounts in thousands, except percentages):

	Three Months Ended
	September 29, 2012			October 1, 2011			Percent Change			Percent of Net  Sales - 2012			Percent of Net Sales - 2011
Net sales
Net sales of tangible products	$	239,786		$	241,686			(0.8	)		95.1			95.4
Revenue from services & software		12,251			11,652			5.1			4.9			4.6
Total net sales		252,037			253,338			(0.5	)		100.0			100.0
Cost of sales
Cost of sales of tangible products		118,751			122,529			(3.1	)		47.1			48.3
Cost of services & software		6,362			7,256			(12.3	)		2.5			2.9
Total cost of sales		125,113			129,785			(3.6	)		49.6			51.2
Gross profit		126,924			123,553			2.7			50.4			48.8
Operating expenses		88,159			74,673			18.1			35.0			29.5
Operating income		38,765			48,880			(20.7	)		15.4			19.3
Other income (expense)		(267	)		(898	)		(70.3	)		(0.1	)		(0.4	)
Income from continuing operations before income taxes		38,498			47,982			(19.8	)		15.3			18.9
Income taxes		11,917			13,795			(13.6	)		4.7			5.4
Income from continuing operations		26,581			34,187			(22.2	)		10.6			13.5
Income from discontinued operations, net of tax		516			10,814			(95.2	)		0.2			4.3
Net income	$	27,097		$	45,001			(39.8	)		10.8			17.8
Diluted earnings per share:
Income from continuing operations	$	0.51		$	0.64			(20.3	)
Income from discontinued operations		0.01			0.20			(95.0	)
Net income	$	0.52		$	0.84			(38.1	)

Consolidated Results of Operations – Third quarter

Sales

Net sales for the third quarter of 2012 compared with the corresponding 2011 quarter, decreased by 0.5%. The slight decrease in sales was largely attributable to a 5.3% decrease in hardware sales offset by an increase in supplies sales which includes the sales in 2012 from the acquisition of Laserband. Printer unit volume decreased 1.5% from the third quarter of 2011 primarily due to volume decreases in tabletop, mobile, and card printers, offset by increased shipments of desktop printers.

Sales by product category were as follows (amounts in thousands, except percentages):

	Three Months Ended
Product Category	September 29, 2012		October 1, 2011		Percent Change			Percent of Net Sales - 2012		Percent of Net Sales - 2011
Hardware	$	183,053	$	193,214		(5.3	)		72.6		76.3
Supplies		55,423		47,110		17.6			22.0		18.6
Service and software		12,251		11,652		5.1			4.9		4.6
Subtotal products		250,727		251,976		(0.5	)		99.5		99.5
Shipping and handling		1,310		1,362		(3.8	)		0.5		0.5
Total net sales	$	252,037	$	253,338		(0.5	)		100.0		100.0

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Sales declines in Europe, Middle East and Africa, and Asia Pacific, substantially from a challenged business environment, were largely offset by increased sales in North America and Latin America. Sales increased in Latin America due to geographic expansion with notable increases in tabletop printers and supplies. Sales in North America increased due to increased sales to retail and manufacturing customers. Zebra continues to build a broader base of customers to penetrate targeted industries more deeply. Movements in foreign exchange rates decreased sales by $3,767,000 in the Europe, Middle East and Africa region for the quarter, due principally to a weaker euro against the U.S. dollar.

Sales to customers by geographic region were as follows (in thousands, except percentages):

	Three Months Ended
Geographic Region	September 29, 2012		October 1, 2011		Percent Change			Percent of Net Sales - 2012		Percent of Net Sales - 2011
Europe, Middle East and Africa	$	75,637	$	84,597		(10.6	)		30.0		33.4
Latin America		26,188		23,968		9.3			10.4		9.5
Asia-Pacific		36,843		38,723		(4.9	)		14.6		15.3
Total International		138,668		147,288		(5.9	)		55.0		58.2
North America		113,369		106,050		6.9			45.0		41.8
Total net sales	$	252,037	$	253,338		(0.5	)		100.0		100.0

Gross Profit

Gross profit of 50.4%, versus 48.8% in 2011, reflects reduced overhead, freight and reserve costs, partially offset by unfavorable movements in foreign exchange rates and product mix. Unfavorable foreign currency movements decreased third quarter gross profit by $2,939,000.

Printer unit volumes and average selling price information is summarized below:

	Three Months Ended
	September 29, 2012		October 1, 2011		Percent Change
Total printers shipped		310,972		315,743		(1.5	)
Average selling price of printers shipped	$	492	$	524		(6.1	)

The 6.1% decrease in average selling price is a result primarily of a change in product mix from one quarter compared to the other.

Operating Expenses

Operating expenses for the quarter increased 18.1% mainly due to greater general and administrative expenses and an asset impairment charge of $9,114,000. Excluding the asset impairment charge, operating expenses increased 5.9% over 2011 levels. Compensation costs, outside professional services, rent, and depreciation all increased over 2011 levels. Acquisition costs relate to investigated or completed merger and acquisition activity during the period. The asset impairment charge in 2012 is for goodwill related to the remaining goodwill of Zebra’s smaller reporting unit.

Operating expenses are summarized below (in thousands, except percentages):

	Three Months Ended
Operating Expenses	September 29, 2012		October 1, 2011		Percent Change			Percent of Net Sales  2012		Percent of Net Sales  2011
Selling and marketing	$	32,321	$	31,942		1.2			12.8		12.6
Research and development		22,007		22,584		(2.6	)		8.7		8.9
General and administrative		22,481		18,978		18.5			9.0		7.5
Amortization of intangible assets		1,670		843		98.1			0.7		0.3
Acquisition costs		566		188		N/M			0.2		0.1
Exit and restructuring costs		0		138		N/M			0.0		0.1
Asset impairment charge		9,114		0		N/M			3.6		0.0
Total operating expenses	$	88,159	$	74,673		18.1			35.0		29.5

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Operating Income

The operating income decreased 20.7% for the third quarter of 2012 versus 2011 as a result of increased operating expenses as noted above, primarily the $9,114,000 goodwill impairment. Operating income actually decreased 2.0% excluding the effect of the $9,114,000 goodwill impairment in 2012.

Other Income (Expense)

Investment income increased due to higher cash and investment amounts in 2012 compared with 2011, primarily related to increased cash from operations. Zebra recorded a higher foreign exchange loss in 2012 as the U.S. dollar weakened against the euro.

Zebra’s non-operating income and expense items are summarized in the following table (in thousands):

	Three Months Ended
	September 29, 2012			October 1, 2011
Investment income	$	541		$	134
Foreign exchange loss		(514	)		(173	)
Other, net		(294	)		(859	)
Total other income (expense)	$	(267	)	$	(898	)

Income Taxes

The effective income tax rate for the third quarter of 2012 was 31.0% compared with 28.8% for the third quarter of 2011. The 2012 effective tax rate increase in the third quarter reflects a discrete item for a nondeductible asset impairment charge which is offset by a decrease related to the second quarter implementation of a new structure for Zebra’s international subsidiaries. The effect of the non-deductibility of the asset impairment charge increased the effective tax rate by 6.0% for the third quarter of 2012. Effective August 2012, the statutory tax rate in the UK declined from 25.5 % to 24.5%.

Income from Discontinued Operations

Beginning in the first quarter of 2011, Zebra reported the results of Navis and proveo as discontinued operations. Each of these businesses was sold during 2011. The income from discontinued operations in 2012 is primarily related to the reversal of a reserve for an uncertain tax position. The income from discontinued operations in 2011 relates to the tax benefit realized upon the sale of proveo AG which was offset by losses on discontinued operations and losses on the sale of discontinued operations.

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Results of Operations: Nine months ended September 29, 2012 versus nine months ended October 1, 2011

Consolidated Results of Operations

(Amounts in thousands, except percentages):

	Nine Months Ended
	September 29, 2012			October 1, 2011			Percent Change			Percent of Net Sales - 2012		Percent of Net Sales - 2011
Net sales
Net sales of tangible products	$	706,970		$	700,568			0.9			95.2		95.2
Revenue from services & software		36,019			35,612			1.1			4.8		4.8
Total net sales		742,989			736,180			0.9			100.0		100.0
Cost of Sales
Cost of sales of tangible products		357,764			351,042			1.9			48.2		47.7
Cost of services & software		18,041			19,889			(9.3	)		2.4		2.7
Total cost of sales		375,805			370,931			1.3			50.6		50.4
Gross profit		367,184			365,249			0.5			49.4		49.6
Operating expenses		246,951			225,336			9.6			33.2		30.6
Operating income		120,233			139,913			(14.1	)		16.2		19.0
Other income (expense)		(121	)		(1,306	)		(90.7	)		0.0		(0.2	)
Income from continuing operations before income taxes		120,112			138,607			(13.3	)		16.2		18.8
Income taxes		33,014			41,123			(19.7	)		4.5		5.6
Income from continuing operations		87,098			97,484			(10.7	)		11.7		13.2
Income from discontinued operations, net of tax		816			42,115			(98.1	)		0.1		5.7
Net Income	$	87,914		$	139,599			(37.0	)		11.8		18.9
Diluted earnings per share
Income from continuing operations	$	1.67		$	1.78			(6.2	)
Income from discontinued operations		0.02			0.77			(97.4	)
Net income	$	1.69		$	2.55			(33.7	)

Consolidated Results of Operations – Year to date

Sales

Net sales for the first nine months of 2012 compared with the same 2011 period increased 0.9%. The increase in sales was largely attributable to 9.6% growth in supplies including wristbands, labels, and card printer supplies. Printer unit volume increased 7.1% for the first nine months of 2012 compared to levels in 2011 primarily due to volume increases in desktop, mobile and card printers, as product mix toward lower-priced products offset the volume increase.

Sales by product category were as follows (amounts in thousands, except percentages):

	Nine Months Ended
Product Category	September 29, 2012		October 1, 2011		Percent Change			Percent of Net Sales - 2012		Percent of Net Sales - 2011
Hardware	$	548,222	$	555,108		(1.2	)		73.9		75.4
Supplies		154,893		141,323		9.6			20.8		19.2
Service and software		36,019		35,612		1.1			4.8		4.8
Subtotal products		739,134		732,043		1.0			99.5		99.4
Shipping and handling		3,855		4,137		(6.8	)		0.5		0.6
Total net sales	$	742,989	$	736,180		0.9			100.0		100.0

Sales increased in Latin America due to geographic expansion with notable increases in supplies, mobile, and card printer sales for the first nine months of 2012 compared to the same period in 2011. Sales in North America increased due to increased sales of supplies and a strong demand for desktop, card and tabletop printers. Zebra continues to build a broader base of customers to penetrate targeted industries more deeply. Movements in foreign exchange rates decreased sales by $10,281,000 in the Europe, Middle East and Africa regions due principally to a weaker euro against the U.S. dollar.

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Sales to customers by geographic region were as follows (in thousands, except percentages):

	Nine Months Ended
Geographic Region	September 29, 2012		October 1, 2011		Percent Change			Percent of Net Sales – 2012		Percent of Net Sales – 2011
Europe, Middle East and Africa	$	239,615	$	254,218		(5.7	)		32.3		34.5
Latin America		73,846		68,137		8.4			9.9		9.3
Asia-Pacific		105,912		109,518		(3.3	)		14.3		14.9
Total International		419,373		431,873		(2.9	)		56.5		58.7
North America		323,616		304,307		6.3			43.5		41.3
Total net sales	$	742,989	$	736,180		0.9			100.0		100.0

Gross Profit

Gross profit dollars increased 0.5% primarily due to favorable movements in product mix. Gross profit was affected by unfavorable foreign currency movements which decreased gross profit by $8,116,000. The above factors contributed to the decrease in gross margin from 49.6% to 49.4%.

Printer unit volumes and average selling price information is summarized below:

	Nine Months Ended
	September 29, 2012		October 1, 2011		Percent Change
Total printers shipped		938,827		876,483		7.1
Average selling price of printers shipped	$	488	$	535		(8.7	)

For the first nine months of 2012, unit volumes increased compared to the same period of 2011, with notable volume increases in desktop, mobile, and card printers. The 8.7% decrease in average selling price is primarily the result of a change in product mix.

Operating Expenses

Operating expenses in 2012 increased 9.6% due to greater selling and marketing and general and administrative expenses compared with the same period in 2011. Excluding the asset impairment charge, operating expenses increased 5.5% over 2011 levels. Several categories accounted for these increases, including compensation costs, business development, outside professional services, travel and entertainment, rent, depreciation and information systems expenses. These increases are principally related to activities supporting Zebra’s geographic expansion and market development activities. Acquisition costs are related to investigated and completed acquisitions during the period. Exit and restructuring costs in 2011 relate to the relocation and consolidation of administrative, accounting and distribution functions of our Location Solutions product line. Asset impairment charge in 2012 relates to the remaining goodwill associated with Zebra’s smaller reporting unit.

Operating expenses are summarized below (in thousands, except percentages):

	Nine Months Ended
Operating Expenses	September 29, 2012		October 1, 2011		Percent Change			Percent of Net Sales  2012		Percent of Net Sales  2011
Selling and marketing	$	96,593	$	91,420		5.7			13.0		12.4
Research and development		64,759		66,752		(3.0	)		8.7		9.1
General and administrative		71,203		62,372		14.2			9.6		8.5
Amortization of intangible assets		3,210		2,514		27.7			0.4		0.3
Acquisition costs		2,072		188		N/M			0.3		0.0
Exit and restructuring costs		0		2,090		N/M			0.0		0.3
Asset impairment charge		9,114		0		N/M			1.2		0.0
Total operating expenses	$	246,951	$	225,336		9.6			33.2		30.6

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Operating Income

The operating income decrease of 14.1% for the first nine months of 2012 was the result of increased operating expenses as noted above. Operating income actually decreased 7.6% considering the effect of the $9,114,000 goodwill impairment in 2012.

Other Income (Expense)

Investment income increased due to increased cash and investment balances in 2012 compared with 2011. Zebra recorded a larger foreign exchange loss in 2011.

Zebra’s non-operating income and expense items are summarized in the following table (in thousands):

	Nine Months Ended
	September 29, 2012			October 1, 2011
Investment income	$	1,959		$	1,350
Foreign exchange loss		(936	)		(1,300	)
Other, net		(1,144	)		(1,356	)
Total other income (expense)	$	(121	)	$	(1,306	)

Income Taxes

The effective income tax rate for the first nine months of 2012 was 27.5% compared with an income tax rate of 29.7% for the first nine months of 2011. The 2012 effective tax rate decline for the first nine months of 2012 compared to 2011 reflects the implementation of a new structure for Zebra’s international subsidiaries which has contributed to reducing the effective tax rate. In addition, the UK statutory rate decreased from 25.5% to 24.5% in August 2012. These reductions were offset by a discrete item in the third quarter of 2012 related to a non-deductible asset impairment charge which increased the effective tax rate for first nine months of 2012 by 2.0%. The rate in 2011 included a tax valuation allowance in the first quarter of 2011 against a subsequently disposed subsidiary.

Income from Discontinued Operations

Beginning in the first quarter of 2011, Zebra reported the results of Navis and proveo as discontinued operations. Each of these businesses was sold during 2011. The income in 2011 relates to these sales offset by losses on discontinued operations. The income from discontinued operations in 2012 is related to the amendment and extension of the proveo loan agreement and the reversal of a tax reserve.

Liquidity and Capital Resources

(Amounts in thousands, except percentages):

	Nine Months Ended
Rate of Return Analysis:	September 29, 2012			October 1, 2011
Average cash and marketable securities balances	$	347,745		$	278,823
Annualized rate of return		0.8	%		0.7	%

Average cash and marketable securities balances for the first nine months of 2012 increased compared to 2011 as a result of increased cash provided by operating activities and from the collection of the escrowed proceeds from the sale of Navis.

As of September 29, 2012, Zebra had $368,795,000 in cash and investments and marketable securities, compared with $326,695,000 at December 31, 2011. Factors affecting cash and investment balances during the first nine months of 2012 include the following (changes below include the impact of foreign currency):

• Inventories decreased $11,981,000 due to decreases in raw materials and finished goods.

• Accounts payable decreased $10,843,000 due to decreased inventory levels and timing of payments.

• Accrued liabilities decreased $11,341,000 due to the timing of annual bonus payments and regular payroll.

• Income taxes payable increased $14,711,000 due to the timing of tax payments.

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• Purchases of property and equipment totaled $17,140,000.

• Received escrowed proceeds from the sale of Navis totaling $27,580,000.

• Acquisition of LaserBand, LLC in the amount of $59,874,000

• Purchases of treasury shares totaled $39,697,000.

Zebra earns a significant amount of our operating income outside of the U.S., which is deemed to be permanently reinvested in foreign jurisdictions. Zebra does not intend to repatriate funds, however, should Zebra require more capital in the U.S. than is generated by our operations locally, Zebra could elect to repatriate funds held in foreign jurisdictions or raise capital in the U.S. through debt or equity issuances. These alternatives could result in higher effective tax rates or increased interest expense.

On October 10, 2012, Zebra entered into a revolving credit agreement for a five-year $250 million 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 the 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%. This spread for LIBOR-based loans depends on our ratio of Total Debt to EBITDA, as defined in the agreement, and 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 draw or loan request under the New Credit Agreement at the time of closing.

The credit agreement includes customary representations, warranties, affirmative and negative covenants (including, among others, restrictions on the payment of cash dividends) and events of default (and related remedies, including acceleration and increased interest rates following an event of default). It also contains financial covenants tied to Zebra’s leverage ratio and interest coverage ratio.

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

Critical Accounting Policies and Estimates

Management prepared the consolidated financial statements of Zebra under accounting principles generally accepted in the United States of America. These principles require the use of estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions we used are reasonable, based upon the information available.

Our estimates and assumptions affect the reported amounts in our financial statements. The following accounting policies comprise those that we believe are the most critical in understanding and evaluating Zebra’s reported financial results.

Revenue Recognition

Product revenue is recognized once four criteria are met: (1) we have persuasive evidence that an arrangement exists; (2) delivery has occurred and title has passed to the customer, which generally happens at the point of shipment provided that no significant obligations remain; (3) the price is fixed and determinable; and (4) collectability is reasonably assured. Other items that affect our revenue recognition include:

Customer Returns

Customers have the right to return products that do not function properly within a limited time after delivery. We monitor and track product returns and record a provision for the estimated future returns based on historical experience and any notification received of pending returns. Returns have historically been within expectations and the provisions established, but Zebra cannot guarantee that it will continue to experience return rates consistent with historical patterns. Historically, our product returns have not been significant. However, if a significant issue should arise, it could have a material impact on our financial statements.

Growth Rebates

Some of our channel program partners are offered incentive rebates based on the attainment of specific growth targets related to products they purchase from us over a quarter or year. These rebates are recorded as a reduction to revenue. Each quarter, we estimate the amount of outstanding rebates and establish a reserve for them based on shipment history. Historically, actual rebates have been in line with our estimates.

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Pass Through Rebate Program

Some of our distributors are offered monthly rebates based on distribution of products to our program partners. These rebates are recorded as a reduction to revenue. Each month we estimate the amount of rebate earned and establish a reserve for them based on recent trends of actual activity. The actual distributor rebates paid have historically been in line with our estimates.

Price Protection

Some of our customers are offered price protection by Zebra as an incentive to carry inventory of our product. These price protection plans provide that if we lower prices, we will credit them for the price decrease on inventory they hold. We estimate future payments under price protection programs quarterly and establish a reserve, which is charged against revenue. Our customers typically carry limited amounts of inventory, and Zebra infrequently lowers prices on current products. As a result, the amounts paid under these plans have been minimal.

Software Revenue

We sell three types of software and record revenue as follows:

• Our printers contain embedded firmware, which is part of the hardware purchase. We consider the sale of this firmware to be incidental to the sale of the printer and do not attribute any revenue to it.

• We sell a limited amount of prepackaged, or off-the-shelf, software for the creation of bar code labels using our printers. There is no customization required to use this software, and we have no post-shipment obligations on the software. Revenue is recognized at the time this prepackaged software is shipped.

• We sometimes provide custom software as part of a printer installation project. We bill custom software development services separate from the related hardware. Revenue related to custom software is recognized once the custom software development services have been completed and accepted by the customer.

• We recognize license revenue when (1) a signed contract is obtained; (2) delivery of the product has occurred; (3) the license fee is fixed or determinable; and (4) collection is probable.

Maintenance and Support Agreements

We enter into post-contract maintenance and support agreements. Revenues are recognized ratably over the service period and the cost of providing these services is expensed as incurred.

Shipping and Handling

We charge our customers for shipping and handling services based upon our internal price list for these items. The amounts billed to customers are recorded as revenue when the product ships. Any costs incurred related to these services are included in cost of sales.

Zebra enters into sales transactions that include more than one product type. This bundle of products might include printers, current or future supplies, and services. When this type of transaction occurs, we allocate the purchase price to each product type based on the fair value of the individual products determined by vendor specific objective evidence. The revenue for each individual product is then recognized when the recognition criteria for that product is fully met.

Investments and Marketable Securities

Investments and marketable securities at September 29, 2012, consisted of the following:

U.S. government and agency securities	29.5	%
Obligations of government-sponsored enterprises (1)	1.6	%
State and municipal bonds	31.9	%
Corporate securities	37.0	%

(1) Includes investments in notes issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Farm Credit Banks and the Federal Home Loan Bank.

We classify our debt and marketable equity securities in one of three categories: trading, available-for-sale or held-to-maturity. Trading securities are bought and held principally for the purpose of selling them in the near term. Held-to-maturity securities are those debt securities that Zebra has the ability and intent to hold until maturity. All securities not included in trading or held-to-maturity are classified as available-for-sale.

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Trading and available-for-sale securities are recorded at fair value. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of discounts or premiums. Unrealized holding gains and losses on trading securities are included in earnings. Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of stockholders’ equity until realized. As of September 29, 2012, Zebra’s investments in marketable debt securities are classified as available-for-sale. In addition, as of September 29, 2012, all of our investments in marketable debt securities with maturities greater than one year are classified as long-term investments in the balance sheet due to our ability and intent to hold them until maturity.

Accounts Receivable

We have standardized credit granting and review policies and procedures for all customer accounts, including:

• Credit reviews of all new customer accounts,

• Ongoing credit evaluations of current customers,

• Credit limits and payment terms based on available credit information,

• Adjustments to credit limits based upon payment history and the customer’s current credit worthiness,

• An active collection effort by regional credit functions, reporting directly to the corporate financial officers, and

• Limited credit insurance on the majority of our international receivables.

We reserve for estimated credit losses based upon historical experience and specific customer collection issues. Over the last three years, accounts receivable reserves varied from 0.7% to 1.2% of total accounts receivable. Accounts receivable reserves as of September 29, 2012, were $1,082,000, or 0.7% of the balance due. Accounts receivable reserves as of December 31, 2011, were $1,560,000, or 1.0% of the balance due. We believe our reserve level is appropriate considering the quality of the portfolio as of September 29, 2012. While credit losses have historically been within expectations and the provisions established, we cannot guarantee that our credit loss experience will continue to be consistent with historical experience.

Inventories

We value our inventories at the lower of the actual cost to purchase or manufacture using the first-in, first-out (FIFO) method, or the current estimated market value. We review inventory quantities on hand and record a provision for excess and obsolete inventory based on forecasts of product demand and production requirements for the subsequent twelve months.

Over the last three years, our reserves for excess and obsolete inventories have ranged from 8.0% to 11.9% of gross inventory. As of September 29, 2012, inventory reserves were $14,822,000, or 10.8% of gross inventory compared to inventory reserves of $14,710,000, or 9.9% of gross inventory as of December 31, 2011. We believe our reserve level is appropriate considering the quantities and quality of the inventories as of September 29, 2012.

Valuation of Goodwill

Goodwill of a reporting unit is tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Examples of such events or circumstances include:

• Significant adverse change in legal factors or in the business climate,

• Adverse action or assessment by a regulator,

• Unanticipated competition,

• Loss of key personnel,

• More-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or otherwise disposed of,

• Testing for recoverability of a significant asset group within a reporting unit, or

• Allocation of a portion of goodwill to a business to be disposed of.

If we believe that one or more of the above indicators of impairment have occurred, we perform an impairment test. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. We generally determine the fair value of our reporting units using three valuation methods: Income Approach – Discounted Cash Flow Analysis, Market Approach – Guideline Public Company Method and Market Approach – Comparative Transactions Method. The approach defined below is based upon our last impairment test conducted in June 2012 as of the end of May 2012.

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Under the “Income Approach – Discounted Cash Flow Analysis” the key assumptions consider sales, cost of sales and operating expenses projected through the year 2021. These assumptions were determined by management utilizing our internal operating plan and assuming growth rates for revenues and operating expenses, and margin assumptions. The fourth key assumption under this approach is the discount rate which is determined by looking at current risk-free rates of capital, current market interest rates and the evaluation of risk premium relevant to the business segment. If our assumptions relative to growth rates were to change or were incorrect, our fair value calculation may change which could result in impairment.

Under the “Market Approach – Guideline Company Method” we identified 20 publicly traded companies, including Zebra, which we believe have significant relevant similarities. For these 20 companies we calculated the mean ratio of invested capital to revenues and invested capital to EBITDA. Similar to the Income approach discussed above, sales, cost of sales, operating expenses and their respective growth rates were the key assumptions utilized. The market prices of Zebra and other guideline company shares are key assumptions. If these market prices increase, the estimated market value would increase. If the market prices decrease, the estimated market value would decrease.

Under the “Market Approach – Comparative Transactions Method” we looked at 19 market based transactions for companies that have similarities to our business segment, including similarities to one or more of the business lines, markets, growth prospects, margins and size. We calculated mean revenue and EBITDA multiples for the selected transactions. These multiples were applied to forecasted Zebra results for that segment to estimate market value. The key assumptions and impact to changes to those assumptions would be similar to those assumptions under the “Income Approach – Discounted Cash Flow Analysis” and the “Market Approach – Guideline Company Method”.

The results of these three methods are weighted based upon management’s determination with more weighing upon the Income approach because it considers anticipated future financial performance. The Market approaches are based upon historical and current economic conditions which might not reflect the long term prospects or opportunities for our business segment being evaluated.

If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test to determine the amount of impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill.

There have not been any significant changes to our impairment testing methodology other than updating the assumptions to reflect the current market environment. As discussed above, key assumptions used in the first step of the goodwill impairment test were determined by management utilizing the internal operating plan. The key assumptions utilized include forecasted growth rates for revenues and operating expenses as well as a discount rate which is determined by looking at current risk-free rates of capital, current market interest rates and the evaluation of risk premium relevant to the business segment. Zebra will monitor future results and if necessary will perform at test if indicators trigger an impairment review.

We test the impairment of goodwill each year as of the end of May or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We completed our annual assessment during June 2012 and determined that our goodwill was not impaired as of the end of May 2012.

Zebra has two reporting units required for its annual goodwill impairment test. As part of Zebra’s annual impairment test in the second quarter, Management determined that the larger of the two reporting units’ fair value exceeded its carrying value by a significant amount. The second smaller reporting unit’s amount by which the fair value exceeded the carrying value ranged from approximately 8% under the Income Approach to 31% under the Market Approach.

Due to the deterioration in the smaller reporting unit’s operating results during the third quarter, failing to meet our forecasted revenues and operating expenses, and a decline in expected growth rates, our fair value calculation for the smaller reporting unit changed and we determined our goodwill associated with the smaller reporting unit to be impaired. The above impairment indicators led us to conclude an interim goodwill test was necessary. Zebra performed the first step of the impairment test and failed. As a result, Zebra performed a preliminary second step analysis and recorded an estimated goodwill impairment charge of $9,114,000 as of September 29, 2012. This amount is an estimate and could be adjusted upon completion of a detailed impairment analysis. After this impairment charge, there is no remaining goodwill in the smaller reporting unit.

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Valuation of Long-Lived and Other Intangible Assets

We evaluate the impairment of identifiable intangibles and other long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered that may trigger an impairment review consist of:

• Significant underperformance relative to expected historical or projected future operating results,

• Significant changes in the manner of use of the acquired assets or the strategy for the overall business,

• Significant negative industry or economic trends,

• Significant decline in Zebra’s stock price for a sustained period, and

• Significant decline in market capitalization relative to net book value.

If we believe that one or more of the above indicators of impairment have occurred and the undiscounted cash flow test has failed in the case of amortizable assets, we measure impairment based on projected discounted cash flows using a discount rate that incorporates the risk inherent in the cash flows.

Net intangible assets, long-lived assets and goodwill amounted to $134,362,000 as of September 29, 2012. On July 13, 2012, Zebra acquired intangible assets related to Laserband LLC in the amount of $29,560,000 for patents, technology and customer relationships. On a preliminary basis and pending the receipt of final valuations, the purchase price was allocated to identifiable tangible assets, intangible assets, and liabilities assumed based on their estimated fair values which resulted in goodwill of $24,756,000. See Note 18 Business Combinations for specific information regarding the Laserband LLC acquisition.

Income Taxes

Zebra has identified, evaluated, and measured the amount of income tax benefits to be recognized for all of our income tax positions. Included in deferred tax assets are amounts related to federal and state net operating losses that resulted from our acquisition of WhereNet Corp in 2007. We intend to utilize these net operating loss carryforwards to offset future income taxes.

Zebra earns a significant amount of our operating income outside of the U.S., which is deemed to be permanently reinvested in foreign jurisdictions. Zebra does not intend to repatriate funds, however, should Zebra require more capital in the U.S. than is generated by our operations locally, Zebra could elect to repatriate funds held in foreign jurisdictions or raise capital in the U.S. through debt or equity issuances. These alternatives could result in higher effective tax rates or increased interest expense.

The U.S. federal tax return for 2011 is currently open and subject to an audit by the Internal Revenue Service. The 2007 tax return is open on a limited basis due to an amended return filed in August 2011. The tax years 2008 through 2010 remain open to examination by multiple state taxing jurisdictions. Tax authorities in the United Kingdom have completed income tax audits for tax years through 2006.

Zebra’s continuing practice is to recognize interest and/or penalties related to income tax matters as part of income tax expense. For the nine months ended September 29, 2012 and October 1, 2011, we did not accrue any interest or penalties into income tax expense.

Zebra’s estimates of taxes for interim periods are based upon the annual effective tax rate for the full-year, adjusted for any discrete items that relate to an interim period. The estimated annual effective tax rate is determined using projections of full-year taxable income by each Zebra legal entity with the appropriate statutory tax rate for that subsidiary applied. The effective rate may change during the year, typically due to the change in our estimated taxable income by jurisdiction as each year progresses.

	Nine Months Ended
	September 29, 2012			October 1, 2011
Effective tax rate		27.5	%		29.7	%

The 2012 effective tax rate decline for the first nine months of 2012 compared to 2011 reflects the implementation of a new structure for Zebra’s international subsidiaries which has contributed to reducing the effective tax rate. In addition, the UK statutory rate decreased from 25.5% to 24.5% in August 2012. These reductions were offset by a discrete item in the third quarter of 2012 related to a non-deductible asset impairment charge which increased the effective tax rate for first nine months of 2012 by 2.0%. The rate in 2011 included a tax valuation allowance in the first quarter of 2011 against a subsequently disposed subsidiary.

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Significant Customer

Our net sales to significant customers as a percentage of total net sales were as follows:

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Customer A		20.8	%		22.1	%		21.0	%		20.2	%
Customer B		11.2	%		9.7	%		11.0	%		10.4	%
Customer C		10.5	%		8.7	%		10.0	%		8.7	%

No other customer accounted for 10% or more of total net sales during these periods. The customers disclosed above are distributors (i.e. not end users) of Zebra’s products. The increase in the percentage of sales through distributors, which in turn sell to value-added resellers and other channel partners, is consistent with how other products in the automatic identification industry are distributed.

Safe Harbor

Forward-looking statements contained in this filing are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and are highly dependent upon a variety of important factors which could cause actual results to differ materially from those reflected or implied in such forward looking statements. These forward-looking statements are based on current expectations, forecasts and assumptions and are subject to the risks and uncertainties inherent in Zebra’s industry, market conditions, general domestic and international economic conditions, and other factors. These factors include:

• Market acceptance of Zebra’s printers, other hardware and software products and competitors’ product offerings and the potential effects of technological changes,

• The effect of market conditions in our geographic regions of North America, Europe, Middle East and Africa, Asia Pacific and Latin America,

• Our ability to control manufacturing and operating costs,

• Success of acquisitions and their integration, including the realization of revenue and cost synergies,

• Interest rate and financial market conditions because of our large investment portfolio,

• The growing regulatory burdens imposed by federal, state and local governments,

• The effect of natural disasters on our business,

• Currency exchange rates due to the large percentage of our sales and operations outside of the U.S., and

• The outcome of litigation in which Zebra is involved, particularly litigation or claims related to infringement of third-party intellectual property rights.

When used in this document and documents referenced, the words “anticipate,” “believe,” “estimate,” “will” and “expect” and similar expressions as they relate to Zebra or its management are intended to identify such forward-looking statements. We encourage readers of this report to review Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011, for a further discussion of issues that could affect Zebra’s future results. Zebra undertakes no obligation, other than as may be required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this report.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in Zebra’s market risk during the quarter ended September 29, 2012. For additional information on market risk, refer to the “Quantitative and Qualitative Disclosures About Market Risk” section of our Form 10-K for the year ended December 31, 2011. See Note 3 to the Consolidated Financial Statements included in this report for further discussion of investments and marketable securities.

In the normal course of business, portions of Zebra’s operations are subject to fluctuations in currency values. We manage these risks using derivative financial instruments. See Note 8 to the Consolidated Financial Statements included in this report for further discussion of derivative instruments.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this Form 10-Q. The evaluation was conducted under the supervision of our Disclosure Committee, and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective to provide reasonable assurance that (i) the information required to be disclosed by us in this report on Form 10-Q was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) information required to be disclosed by us in our reports that we file or furnish under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

Zebra began a program to update substantially all of its key financial systems in 2008. As portions of these systems are completed, they will be subject to the requirements related to internal control over financial reporting. The requirements for internal control over financial reporting will be a fundamental element of the design and implementation of these systems.

As of February 27, 2012, we completed the implementation of the new systems for our North America region. This implementation included customer order entry and invoicing, inventory procurement and management, certain accounts payable activity, and other related operational systems. As part of the implementation, we changed many of the related internal controls substantially by reducing the number of manual controls with system controls and streamlining Zebra’s internal operations. These new controls will be subject to testing throughout 2012. The effectiveness of these new controls will be disclosed in our December 31, 2012 internal control report.

During 2012, we made additional changes to our controls and procedures as part of our ongoing monitoring of our controls. None of these changes has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. In addition, there were no other changes that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Zebra have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

See Note 10 to the Consolidated Financial Statements included in this report.

Item 1A. Risk Factors

In addition to the other information included in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011, and the factors identified under “Safe Harbor” at the end of Item 2 of Part I of this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition, cash flows or results of operations. The risks described in our Annual Report on Form 10-K are not the only risks facing Zebra. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, cash flows and/or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Treasury Shares

During the third quarter of 2012, Zebra purchased 400,000 shares of Zebra’s Class A Common Stock at a weighted average share price of $37.63 per share, as follows:

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced programs		Maximum number of shares that may yet be purchased under the program
July 2012 (July 1 – July 28)		0	$	0.00		0		2,822,336
August 2012 (July 29 – August 25)		49,025	$	34.79		49,025		2,773,311
September 2012 (August 26 – September 29)		350,975	$	38.03		350,975		2,422,336

(1) On November 4, 2011, Zebra’s Board authorized the purchase of up to an additional 3,000,000 shares under our stock repurchase program. This authorization does not have an expiration date.

(2) During the third quarter, Zebra acquired 6,349 shares of Zebra Class A Common Stock through the withholding of shares necessary to satisfy tax withholding obligations upon the vesting of restricted stock awards. These shares were acquired at an average price of $36.68 per share.

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Item 6. Exhibits

10.1	J. P. Morgan Credit Agreement dated as of October 10, 2012
31.1	Rule 13a-14(a)/15d-14(a) Certification
31.2	Rule 13a-14(a)/15d-14(a) Certification
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from Zebra Technologies Corporation Quarterly Report on Form 10-Q, for the quarter ended September 29, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the consolidated balance sheets; (ii) the consolidated statements of earnings; (iii) the consolidated statements of comprehensive income, (iv) the consolidated statements of cash flows; and (v) notes to consolidated financial statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ZEBRA TECHNOLOGIES CORPORATION
Date: November 7, 2012	By:	/s/ Anders Gustafsson
		Anders Gustafsson
		Chief Executive Officer
Date: November 7, 2012	By:	/s/ Michael C. Smiley
		Michael C. Smiley
		Chief Financial Officer

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EX-10.1

Exhibit 10.1

EXECUTION COPY

CREDIT AGREEMENT

dated as of

October 10, 2012

among

ZEBRA TECHNOLOGIES CORPORATION,

as Borrower

The Lenders Party Hereto

RBS CITIZENS, N.A.,

as Syndication Agent

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Documentation Agent

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

J.P. MORGAN SECURITIES LLC and RBS CITIZENS, N.A.

as Joint Bookrunners and Joint Lead Arrangers

TABLE OF CONTENTS

	Page
ARTICLE I Definitions		1
SECTION 1.01. Defined Terms		1
SECTION 1.02. Classification of Loans and Borrowings		22
SECTION 1.03. Terms Generally		22
SECTION 1.04. Accounting Terms; GAAP		22
ARTICLE II The Credits		23
SECTION 2.01. Commitments		23
SECTION 2.02. Loans and Borrowings		23
SECTION 2.03. Requests for Revolving Borrowings		24
SECTION 2.04. [Reserved]		24
SECTION 2.05. Swingline Loans		24
SECTION 2.06. Letters of Credit		26
SECTION 2.07. Funding of Borrowings		30
SECTION 2.08. Interest Elections		31
SECTION 2.09. Termination and Reduction of Commitments		32
SECTION 2.10. Repayment of Loans; Evidence of Debt		32
SECTION 2.11. Prepayment of Loans		33
SECTION 2.12. Fees		34
SECTION 2.13. Interest		35
SECTION 2.14. Alternate Rate of Interest		36
SECTION 2.15. Increased Costs		36
SECTION 2.16. Break Funding Payments		37
SECTION 2.17. Taxes		38
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs		40
SECTION 2.19. Mitigation Obligations; Replacement of Lenders		42
SECTION 2.20. Expansion Option		42
SECTION 2.21. Senior Debt		44
SECTION 2.22. Designation of Foreign Subsidiary Borrowers		44
SECTION 2.23. Defaulting Lenders		44
ARTICLE III Representations and Warranties		46
SECTION 3.01. Organization; Powers; Subsidiaries		46
SECTION 3.02. Authorization; Enforceability		47
SECTION 3.03. Governmental Approvals; No Conflicts		47
SECTION 3.04. Financial Condition; No Material Adverse Change		47
SECTION 3.05. Properties		47
SECTION 3.06. Litigation and Environmental Matters		48
SECTION 3.07. Compliance with Laws and Agreements		48
SECTION 3.08. Investment Company Status		48
SECTION 3.09. Taxes		48

Table of Contents

(continued)

	Page
SECTION 3.10. ERISA		48
SECTION 3.11. Disclosure		49
SECTION 3.12. Federal Reserve Regulations		49
SECTION 3.13. Liens		49
SECTION 3.14. No Default		49
SECTION 3.15. No Burdensome Restrictions		49
ARTICLE IV Conditions		49
SECTION 4.01. Effective Date		49
SECTION 4.02. Each Credit Event		51
SECTION 4.03. Designation of a Foreign Subsidiary Borrower		51
ARTICLE V Affirmative Covenants		52
SECTION 5.01. Financial Statements and Other Information		52
SECTION 5.02. Notices of Material Events		53
SECTION 5.03. Existence; Conduct of Business		54
SECTION 5.04. Payment of Obligations		54
SECTION 5.05. Maintenance of Properties; Insurance		54
SECTION 5.06. Books and Records; Inspection Rights		54
SECTION 5.07. Compliance with Laws and Material Contractual Obligations		54
SECTION 5.08. Use of Proceeds		55
SECTION 5.09. Subsidiary Guaranty		55
SECTION 5.10. Delivery of ZES Articles of Incorporation		55
ARTICLE VI Negative Covenants		55
SECTION 6.01. Indebtedness		55
SECTION 6.02. Liens		57
SECTION 6.03. Fundamental Changes and Asset Sales		58
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions		59
SECTION 6.05. Swap Agreements		59
SECTION 6.06. Transactions with Affiliates		60
SECTION 6.07. Restricted Payments		60
SECTION 6.08. Restrictive Agreements		60
SECTION 6.09. Subordinated Indebtedness and Amendments to Subordinated Indebtedness Documents		61
SECTION 6.10. Sale and Leaseback Transactions		62
SECTION 6.11. Financial Covenants		62

ii

Table of Contents

(continued)

	Page
ARTICLE VII Events of Default		62
ARTICLE VIII The Administrative Agent		65
ARTICLE IX Miscellaneous		67
SECTION 9.01. Notices		67
SECTION 9.02. Waivers; Amendments		68
SECTION 9.03. Expenses; Indemnity; Damage Waiver		70
SECTION 9.04. Successors and Assigns		71
SECTION 9.05. Survival		75
SECTION 9.06. Counterparts; Integration; Effectiveness		75
SECTION 9.07. Severability		75
SECTION 9.08. Right of Setoff		75
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process		76
SECTION 9.10. WAIVER OF JURY TRIAL		76
SECTION 9.11. Headings		77
SECTION 9.12. Confidentiality		77
SECTION 9.13. USA PATRIOT Act		77
SECTION 9.14. Several Obligations; Nonreliance; Violation of Law		77
SECTION 9.15. Disclosure		78
SECTION 9.16. Releases of Subsidiary Guarantors		78
SECTION 9.17. Interest Rate Limitation		78
SECTION 9.18. No Advisory or Fiduciary Responsibility		79

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Table of Contents

(continued)

Page

SCHEDULES:

Schedule 2.01 – Commitments

Schedule 2.06 – Existing LCs

Schedule 3.01 – Subsidiaries

Schedule 6.01 – Existing Indebtedness

Schedule 6.02 – Existing Liens

Schedule 6.04 – Foreign Subsidiary Restructuring

EXHIBITS:

Exhibit A – Form of Assignment and Assumption

Exhibit B – Form of Opinion of Loan Parties’ Counsel

Exhibit C – Form of Increasing Lender Supplement

Exhibit D – Form of Augmenting Lender Supplement

Exhibit E – List of Closing Documents

Exhibit F – Form of Subsidiary Guaranty

Exhibit G – Form of Compliance Certificate

Exhibit H-1 – Form of Borrowing Subsidiary Agreement

Exhibit H-2 – Form of Borrowing Subsidiary Termination

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CREDIT AGREEMENT (this “Agreement”) dated as of October 10, 2012 among ZEBRA TECHNOLOGIES CORPORATION, as Borrower, the LENDERS from time to time party hereto, RBS CITIZENS, N.A., as Syndication Agent, WELLS FARGO BANK, NATIONAL ASSOCIATION, as Documentation Agent, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

The parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to a Loan, or the Loans comprising such Borrowing, bearing interest at a rate determined by reference to the Alternate Base Rate; provided, that with respect to Swingline Loans, such interest rate shall be the Alternate Base Rate unless the Borrower and the Swingline Lender have mutually agreed to another rate of interest.

“Adjusted LIBO Rate” means, with respect to any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means JPMorgan Chase Bank, N.A. (including its branches and affiliates), in its capacity as administrative agent for the Lenders hereunder.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Aggregate Commitment” means the aggregate of the Commitments of all of the Lenders, as reduced or increased from time to time pursuant to the terms and conditions hereof. As of the Effective Date, the Aggregate Commitment is $250,000,000.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus  ¹/₂ of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such service) at approximately 11:00 a.m. London time on such day. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

“Applicable Percentage” means, with respect to any Lender, the percentage of the Aggregate Commitment represented by such Lender’s Commitment; provided that, in the case of Section 2.23 when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage of the Aggregate Commitment (disregarding any Defaulting Lender’s Commitment) represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments and to any Lender’s status as a Defaulting Lender at the time of determination.

“Applicable Rate” means, for any day, with respect to any Eurodollar Revolving Loan or ABR Revolving Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “Eurodollar Spread”, “ABR Spread” or “Commitment Fee Rate”, as the case may be, based upon the Leverage Ratio applicable on such date:

	Leverage Ratio:	ABR Spread		Eurodollar Spread		Commitment Fee Rate
Category 1:	Greater than or equal to 2.50 to 1.00		0.75%		1.75%		0.30%
Category 2:	Greater than or equal to 2.00 to 1.00 but less than 2.50 to 1.00		0.50%		1.50%		0.25%
Category 3:	Greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00		0.25%		1.25%		0.20%
Category 4:	Greater than or equal to 1.00 to 1.00 but less than 1.50 to 1.00		0.125%		1.125%		0.175%
Category 5:	Less than 1.00 to 1.00		0%		1.00%		0.15%

For purposes of the foregoing,

(i) if at any time the Borrower fails to deliver the Financials on or before the date the Financials are due pursuant to Section 5.01, Category 1 shall be deemed applicable for the period commencing five (5) Business Days after the required date of delivery and ending on the date which is five (5) Business Days after the Financials are actually delivered, after which the Category shall be determined in accordance with the table above as applicable;

(ii) adjustments, if any, to the Category then in effect shall be effective five (5) Business Days after the Administrative Agent has received the applicable Financials (it being understood and agreed that each change in Category shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change); and

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(iii) notwithstanding the foregoing, Category 5 shall be deemed to be applicable until the Administrative Agent’s receipt of the applicable Financials for the Borrower’s fiscal quarter ending September 28, 2012 (unless such Financials demonstrate that a different Category should have been applicable during such period, in which case such other Category shall be deemed to be applicable during such period) and adjustments to the Category then in effect shall thereafter be effected in accordance with the preceding paragraphs.

“Approved Fund” has the meaning assigned to such term in Section 9.04.

“Assignment and Assumption” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

“Attributable Receivables Indebtedness” at any time shall mean the principal amount of Indebtedness which (i) if a Permitted Receivables Facility is structured as a secured lending agreement, constitutes the principal amount of such Indebtedness or (ii) if a Permitted Receivables Facility is structured as a purchase agreement, would be outstanding at such time under the Permitted Receivables Facility if the same were structured as a secured lending agreement rather than a purchase agreement.

“Augmenting Lender” has the meaning assigned to such term in Section 2.20.

“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

“Banking Services” means each and any of the following bank services provided to the Borrower or any Subsidiary by any Lender or any of its Affiliates: (a) commercial credit cards, (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

“Banking Services Agreement” means any agreement entered into by the Borrower or any Subsidiary in connection with Banking Services.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with

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immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

“Borrower” means Zebra Technologies Corporation, a Delaware corporation.

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect or (b) a Swingline Loan.

“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in accordance with Section 2.03.

“Borrowing Subsidiary Agreement” means a Borrowing Subsidiary Agreement substantially in the form of Exhibit H-1.

“Borrowing Subsidiary Termination” means a Borrowing Subsidiary Termination substantially in the form of Exhibit H-2.

“Burdensome Restrictions” means any consensual encumbrance or restriction of the type described in clause (a) or (b) of Section 6.08 (without giving effect to any exceptions described in clauses (i) through (iv) of such Section 6.08).

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market.

“Capital Expenditures” means, without duplication, any expenditures for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in

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effect on the date hereof), of Equity Interests representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower on a fully diluted basis; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated by the board of directors of the Borrower nor (ii) appointed by directors so nominated; (c) the acquisition of direct or indirect Control of the Borrower by any Person or group; or (d) the occurrence of a change in control, or other similar provision, as defined in any agreement or instrument evidencing any Material Indebtedness (triggering a default or mandatory prepayment, which default or mandatory prepayment has not been waived in writing).

“Change in Law” ” means the occurrence, after the date of this Agreement (or with respect to any Lender, if later, the date on which such Lender becomes a Lender), of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority, or (c) the making or issuance of any request, rules, guideline, requirement or directive (whether or not having the force of law) by any Governmental Authority; provided however, that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder, issued in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law” regardless of the date enacted, adopted, issued or implemented.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Commitment” means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a) reduced or terminated from time to time pursuant to Section 2.09, (b) increased from time to time pursuant to Section 2.20 and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.

“Consolidated Cash Interest Expense” means, with reference to any period, the cash component of interest expense (including without limitation interest expense under Capital Lease Obligations that is treated as interest in accordance with GAAP) of the Borrower and its Subsidiaries calculated on a consolidated basis for such period with respect to (a) all outstanding Indebtedness of the Borrower and its Subsidiaries allocable to such period in accordance with GAAP (including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers acceptance financing and net costs under

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interest rate Swap Agreements to the extent such net costs are allocable to such period in accordance with GAAP) and (b) the interest component of all Attributable Receivable Indebtedness of the Borrower and its Subsidiaries for such period.

“Consolidated EBITDA” means, with reference to any period, for the Borrower and its Subsidiaries calculated in accordance with GAAP on a consolidated basis, (a) Consolidated Net Income for such period plus (b) the sum of the following, without duplication, to the extent deducted in determining Consolidated Net Income for such period: (i) the provision for depreciation and amortization expense of the Borrower and its Subsidiaries for such period, (ii) income taxes of the Borrower and its Subsidiaries accrued for such period, (iii) net interest expense of the Borrower and its Subsidiaries for such period and (iv) non-cash expenses related to stock based compensation minus (c) to the extent included in determining Consolidated Net Income for such period, any cash payments made during such period in respect of items described in clause (b)(iv) above subsequent to the fiscal quarter in which the relevant non-cash expenses were incurred; provided that there shall be excluded from Consolidated EBITDA any non-cash, non-operating gains or losses (including, without limitation, extraordinary or unusual gains or losses, gains or losses arising from the sale of capital assets or the sale of owned buildings and properties, non-cash impairment charges related to intangible assets, and other non-recurring gains or losses) during such period. For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”), (i) if at any time during such Reference Period the Borrower or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period, and (ii) if during such Reference Period the Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the first day of such Reference Period. As used in this definition, “Material Acquisition” means any acquisition of property or series of related acquisitions of property that (a) constitutes (i) assets comprising all or substantially all or any significant portion of a business or operating unit of a business, or (ii) all or substantially all of the common stock or other Equity Interests of a Person, and (b) involves the payment of consideration by the Borrower and its Subsidiaries in excess of $100,000,000; and “Material Disposition” means any sale, transfer or disposition of property or series of related sales, transfers, or dispositions of property that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of $100,000,000.

“Consolidated Net Income” means, with reference to any period, the net income (or loss) of the Borrower and its Subsidiaries calculated in accordance with GAAP on a consolidated basis (without duplication) for such period.

“Consolidated Total Assets” means, as of the date of any determination thereof, total assets of the Borrower and its Subsidiaries calculated in accordance with GAAP on a consolidated basis as of such date.

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“Consolidated Total Funded Indebtedness” means at any time the sum, without duplication, of (a) the aggregate principal amount of Indebtedness of the Borrower and its Subsidiaries calculated on a consolidated basis as of such time in accordance with GAAP that is actually funded and outstanding at such time, whether or not such amount is due or payable at such time plus, (b) the aggregate amount of Indebtedness of the Borrower and its Subsidiaries relating to the maximum drawing amount of all letters of credit outstanding and bankers acceptances (irrespective of the amounts actually drawn) plus (c) the aggregate of all amounts owing by the Borrower and its Subsidiaries in respect of Capital Lease Obligations. For the avoidance of doubt, Consolidated Total Funded Indebtedness includes all Attributable Receivables Indebtedness.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Event” means a Borrowing, the issuance of a Letter of Credit or an LC Disbursement.

“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three (3) Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

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“Documentation Agent” means Wells Fargo Bank, National Association, in its capacity as documentation agent for the credit facility evidenced by this Agreement.

“Dollars” or “$” refers to lawful money of the United States of America.

“Domestic Subsidiary” means a Subsidiary organized under the laws of a jurisdiction located in the United States of America.

“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Eligible Foreign Subsidiary” means any Foreign Subsidiary that is approved to be a borrower under this Agreement from time to time by the Administrative Agent and all of the Lenders.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure with respect to any Plan to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 303(c) of

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ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any of its ERISA Affiliates of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“Eurodollar”, when used in reference to any Loan or Borrowing, means that such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 2.17(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.17(a) and (d) any United States federal withholding Taxes imposed under FATCA.

“Existing Credit Agreement” means that certain Credit Agreement, dated as of August 14, 2008, by and among the Borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, as amended, modified, supplemented or restated prior to the date hereof.

“Existing LCs” has the meaning set forth in Section 2.06.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

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“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“Financials” means the annual or quarterly financial statements, and accompanying certificates and other documents, of the Borrower and its Subsidiaries required to be delivered pursuant to Section 5.01(a) or 5.01(b).

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Subsidiary” means a Subsidiary that is not a Domestic Subsidiary.

“Foreign Subsidiary Borrower” means any Eligible Foreign Subsidiary that becomes a Foreign Subsidiary Borrower pursuant to Section 2.22 and that has not ceased to be a Foreign Subsidiary Borrower pursuant to such Section.

“GAAP” means generally accepted accounting principles in the United States of America.

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

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“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hostile Acquisition” means (a) the acquisition of the Equity Interests of a Person through a tender offer or similar solicitation of the owners of such Equity Interests which has not been approved (prior to such acquisition) by the board of directors (or any other applicable governing body) of such Person or by similar action if such Person is not a corporation and (b) any such acquisition as to which such approval has been withdrawn.

“Increasing Lender” has the meaning assigned to such term in Section 2.20.

“Incremental Term Loan” has the meaning assigned to such term in Section 2.20.

“Incremental Term Loan Amendment” has the meaning assigned to such term in Section 2.20.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (k) all Attributable Receivables Indebtedness of such Person and (l) obligations of such Person under Sale and Leaseback Transactions. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means Taxes, other than Excluded Taxes and Other Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document.

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“Information Memorandum” means the Confidential Information Memorandum dated September 2012 relating to the Borrower and the Transactions.

“Interest Coverage Ratio” has the meaning assigned to such term in Section 6.11(b).

“Interest Election Request” means a request by the Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.08.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December and the Maturity Date, (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and the Maturity Date and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the Maturity Date.

“Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i). The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

“LC Collateral Account” has the meaning assigned to such term in Section 2.06(j).

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

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“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a Lender hereunder pursuant to Section 2.20 or pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender and the Issuing Bank.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

“Leverage Ratio” has the meaning assigned to such term in Section 6.11(a).

“LIBO Rate” means, with respect to any Interest Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, as the rate for Dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which Dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Loan Documents” means this Agreement, any promissory notes issued pursuant to Section 2.10(e) of this Agreement, any Letter of Credit applications, the Subsidiary Guaranty, and all other agreements, instruments, documents and certificates identified in Section 4.01 executed and delivered to, or in favor of, the Administrative Agent or any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby. Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

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“Loan Parties” means, collectively, the Borrower and the Subsidiary Guarantors.

“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, property, or condition (financial or otherwise) of the Borrower and the Subsidiaries taken as a whole or (b) the validity or enforceability of this Agreement or any and all other Loan Documents or the rights or remedies of the Administrative Agent and the Lenders thereunder.

“Material Domestic Subsidiary” means each Domestic Subsidiary (i) which, as of the most recent fiscal quarter of the Borrower, for the period of four consecutive fiscal quarters then ended, for which financial statements have been delivered pursuant to Section 5.01 (or, if prior to the date of the delivery of the first financial statements to be delivered pursuant to Section 5.01, the most recent financial statements referred to in Section 3.04(a)), contributed greater than ten percent (10%) of the Borrower’s Consolidated EBITDA for such period or (ii) which contributed greater than ten percent (10%) of the Borrower’s Consolidated Total Assets as of such date; provided that, if at any time the aggregate amount of Consolidated EBITDA or Consolidated Total Assets attributable to all Domestic Subsidiaries that are not Material Domestic Subsidiaries exceeds fifteen percent (15%) of the Borrower’s Consolidated EBITDA for any such period or fifteen percent (15%) of the Borrower’s Consolidated Total Assets as of the end of any such fiscal quarter, the Borrower (or, in the event the Borrower has failed to do so within ten (10) days, the Administrative Agent) shall designate sufficient Domestic Subsidiaries as “Material Domestic Subsidiaries” to eliminate such excess, and such designated Subsidiaries shall for all purposes of this Agreement constitute Material Domestic Subsidiaries.

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $20,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

“Maturity Date” means October 10, 2017.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of

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whether allowed or allowable in such proceeding), obligations and liabilities of any of the Borrower and its Subsidiaries to any of the Lenders, the Administrative Agent, the Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents or to the Lenders or any of their Affiliates under any Swap Agreement or any Banking Services Agreement or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof.

“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

“Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

“Participant” has the meaning set forth in Section 9.04.

“Participant Register” has the meaning set forth in Section 9.04.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Permitted Acquisition” means any acquisition (whether by purchase, merger, consolidation or otherwise but excluding in any event a Hostile Acquisition) or series of related acquisitions by the Borrower or any Subsidiary of (i) all or substantially all the assets of or (ii) all or substantially all the Equity Interests in, a Person or division or line of business of a Person, if, at the time of and immediately after giving effect thereto, (a) no Default has occurred and is continuing or would arise after giving effect thereto, (b) such Person or division or line of business is engaged in the same or a similar line of business as the Borrower and the Subsidiaries or business reasonably related thereto, (c) all actions required to be taken with respect to such acquired or newly formed Subsidiary under Section 5.09 shall have been taken, (d) the Borrower and the Subsidiaries are in compliance, on a pro forma basis reasonably acceptable to the Administrative Agent after giving effect to such acquisition (but without giving effect to any synergies or cost savings), with the covenants contained in Section 6.11 recomputed as of the last day of the most recently ended fiscal quarter of the Borrower for which financial statements are available, as if such acquisition (and any related incurrence or repayment of Indebtedness, with any new Indebtedness being deemed to be amortized over the applicable testing period in accordance with its terms) had occurred on the first day of each relevant period for testing such compliance and, if the aggregate consideration paid in respect of such acquisition exceeds $100,000,000, the Borrower shall have delivered to the Administrative Agent a certificate of a Financial Officer of the Borrower to such effect, together with all relevant financial information, statements and projections reasonably requested by the Administrative Agent and (e) in the case of an acquisition or merger involving the Borrower or a Subsidiary, the Borrower or such Subsidiary is the surviving entity of such merger and/or consolidation.

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“Permitted Encumbrances” means:

(a) Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 5.04;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 5.04;

(c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e) judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII; and

(f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

“Permitted Investments” means:

(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America;

(b) obligations of any agency that carry the direct or implied guarantee of the U.S. government including obligations (such as notes, discount notes, medium term notes and floating rate notes) of Government National Mortgage Association, Federal Home Loan Bank, Federal Farm Credit Bank, Federal National Mortgage Association, Student Loan Marketing Association, World Bank, and Tennessee Valley Authority;

(c) investments in certificates of deposit, banker’s acceptances, time deposits and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000, and which investments are rated at least A1/P1 by S&P and Moody’s, respectively;

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(d) fully collateralized repurchase agreements for securities described in clause (a) above that are entered into with a financial institution satisfying the criteria described in clause (c) above or a financial institution that is recognized by the Federal Reserve Bank of New York as a primary dealer;

(e) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000;

(f) an auction-rate security owned by the Borrower and its Subsidiaries on the Closing Date described as Auction Rate Security Trust 2007-1 – Auction Rate 144A (ML), CUSIP number 050700202, which is rated BB+ by S&P as of the Closing Date;

(g) investments (other than in structured investment vehicles and instruments issued thereby) in asset-backed notes rated AAA by S&P;

(h) pre-refunded municipal bonds escrowed to maturity, fully secured or otherwise supported by securities described in clause (a) above, and which are rated at least A/A2 by S&P and Moody’s, respectively;

(i) tax-exempt municipal bonds rated SP-1/MIG-2 or better by S&P and Moody’s respectively and variable or fixed rate notes issued by a bank described in clause (c) above or by a corporation in either case that are rated A1/P1 or better by S&P and Moody’s respectively, and corporate bonds that are rated A/A2 or better by S&P and Moody’s respectively;

(j) corporate issued commercial paper rated A1/P1 or better by S&P and Moody’s respectively and corporate debt (including medium term notes and floating rate notes) denominated in US dollars and issued by US or non-US corporations rated A/A2 or better by S&P and Moody’s respectively; provided, that up to 10% of the investments covered by this clause (j) may consist of debt securities issued by corporations that are rated BBB/Baa or higher by S&P and Moody’s, respectively; and

(k) any other cash equivalent investments permitted by the Borrower’s investment policy as such policy is in effect, and as disclosed to the Administrative Agent and the Lenders, prior to the Effective Date and as such policy may be amended, restated, supplemented or otherwise modified from time to time with the consent of the Administrative Agent.

“Permitted Receivables Facility” shall mean the receivables facility or facilities created under the Permitted Receivables Facility Documents, providing for the sale or pledge by the Borrower and/or one or more other Receivables Sellers of Permitted Receivables Facility Assets (thereby providing financing to the Borrower and the Receivables Sellers) to the Receivables Entity (either directly or through another Receivables Seller), which in turn shall sell or pledge interests in the respective Permitted Receivables Facility Assets to third-party investors pursuant to the Permitted Receivables Facility Documents (with the Receivables Entity permitted

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to issue investor certificates, purchased interest certificates or other similar documentation evidencing interests in the Permitted Receivables Facility Assets) in return for the cash used by the Receivables Entity to purchase the Permitted Receivables Facility Assets from the Borrower and/or the respective Receivables Sellers, in each case as more fully set forth in the Permitted Receivables Facility Documents.

“Permitted Receivables Facility Assets” shall mean (i) Receivables (whether now existing or arising in the future) of the Borrower and its Subsidiaries which are transferred or pledged to the Receivables Entity pursuant to the Permitted Receivables Facility and any related Permitted Receivables Related Assets which are also so transferred or pledged to the Receivables Entity and all proceeds thereof and (ii) loans to the Borrower and its Subsidiaries secured by Receivables (whether now existing or arising in the future) and any Permitted Receivables Related Assets of the Borrower and its Subsidiaries which are made pursuant to the Permitted Receivables Facility.

“Permitted Receivables Facility Documents” shall mean each of the documents and agreements entered into in connection with the Permitted Receivables Facility, including all documents and agreements relating to the issuance, funding and/or purchase of certificates and purchased interests, all of which documents and agreements shall be in form and substance reasonably satisfactory to the Administrative Agent, in each case as such documents and agreements may be amended, modified, supplemented, refinanced or replaced from time to time so long as (i) any such amendments, modifications, supplements, refinancings or replacements do not impose any conditions or requirements on the Borrower or any of its Subsidiaries that are more restrictive in any material respect than those in existence immediately prior to any such amendment, modification, supplement, refinancing or replacement, (ii) any such amendments, modifications, supplements, refinancings or replacements are not materially adverse in any way to the interests of the Lenders and (iii) any such amendments, modifications, supplements, refinancings or replacements are otherwise in form and substance reasonably satisfactory to the Administrative Agent.

“Permitted Receivables Related Assets” means any other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving receivables similar to Receivables and any collections or proceeds of any of the foregoing.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

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“Receivables” shall mean all accounts receivable (including, without limitation, all rights to payment created by or arising from sales of goods, leases of goods or the rendition of services rendered no matter how evidenced whether or not earned by performance).

“Receivables Entity” shall mean a wholly-owned Subsidiary of the Borrower which engages in no activities other than in connection with the financing of accounts receivable of the Receivables Sellers and which is designated (as provided below) as the “Receivables Entity” (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Borrower or any other Subsidiary of the Borrower (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness)) pursuant to Standard Securitization Undertakings, (ii) is recourse to or obligates the Borrower or any other Subsidiary of the Borrower in any way (other than pursuant to Standard Securitization Undertakings) or (iii) subjects any property or asset of the Borrower or any other Subsidiary of the Borrower, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings, (b) with which neither the Borrower nor any of its Subsidiaries has any contract, agreement, arrangement or understanding (other than pursuant to the Permitted Receivables Facility Documents (including with respect to fees payable in the ordinary course of business in connection with the servicing of accounts receivable and related assets)) on terms less favorable to the Borrower or such Subsidiary than those that might be obtained at the time from persons that are not Affiliates of the Borrower, and (c) to which neither the Borrower nor any other Subsidiary of the Borrower has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation shall be evidenced to the Administrative Agent by filing with the Administrative Agent an officer’s certificate of the Borrower certifying that, to the best of such officer’s knowledge and belief after consultation with counsel, such designation complied with the foregoing conditions.

“Receivables Sellers” shall mean the Borrower and those Subsidiary Guarantors that are from time to time party to the Permitted Receivables Facility Documents.

“Register” has the meaning set forth in Section 9.04.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures and unused Commitments representing more than 50% of the sum of the total Revolving Credit Exposures and unused Commitments at such time.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Borrower or any option, warrant or other right to acquire any such Equity Interests in the Borrower.

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“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and Swingline Exposure at such time.

“Revolving Loan” means a Loan made pursuant to Section 2.01.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.

“Sale and Leaseback Transaction” means any sale or other transfer of any property or asset by any Person with the intent to lease such property or asset as lessee.

“Standard Securitization Undertakings” shall mean representations, warranties, covenants and indemnities entered into by the Borrower or any Subsidiary thereof in connection with the Permitted Receivables Facility which are reasonably customary in an accounts receivable financing transaction.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“Subordinated Indebtedness” means any Indebtedness of the Borrower or any Subsidiary the payment of which is contractually subordinated to payment of the Obligations.

“Subordinated Indebtedness Documents” means any document, agreement or instrument evidencing any Subordinated Indebtedness or entered into in connection with any Subordinated Indebtedness.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, Controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

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“Subsidiary” means any subsidiary of the Borrower.

“Subsidiary Guarantor” means each Material Domestic Subsidiary that is required to become a party to the Subsidiary Guaranty (including pursuant to a joinder or supplement thereto). The Subsidiary Guarantors on the Effective Date are identified as such in Schedule 3.01 hereto.

“Subsidiary Guaranty” means that certain Guaranty dated as of the Effective Date in the form of Exhibit F (including any and all supplements thereto) and executed by each Subsidiary Guarantor, as amended, restated, supplemented or otherwise modified from time to time.

“Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time.

“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder.

“Swingline Loan” means a Loan made pursuant to Section 2.05.

“Syndication Agent” means RBS Citizens, N.A., in its capacity as syndication agent for the credit facility evidenced by this Agreement.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, fees, assessments, charges or withholdings imposed by any Governmental Authority.

“Transactions” means the execution, delivery and performance by the Loan Parties of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate (i.e., a Eurodollar Loan or Borrowing) or the Alternate Base Rate (i.e., an ABR Loan or Borrowing).

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“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“ZES” means Zebra Enterprise Solutions Corp., a California corporation.

SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary

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at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

ARTICLE II

The Credits

SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (a) the amount of such Lender’s Revolving Credit Exposure exceeding the amount of such Lender’s Commitment, or (b) the sum of the amount of the total Revolving Credit Exposures exceeding the Aggregate Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required. Any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.05.

(b) Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate to the same extent as to such Lender); provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $2,000,000. At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000; provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Aggregate Commitment or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e). Each Swingline Loan shall be in an amount that is an integral multiple of $250,000 and not less than $500,000. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of ten (10) Eurodollar Borrowings outstanding.

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(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, one (1) Business Day before the date of the proposed Borrowing; provided that any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

(i) the aggregate amount of the requested Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

(v) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.07.

If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04. [Reserved].

SECTION 2.05. Swingline Loans. (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $20,000,000 or (ii) the amount of the total Revolving Credit Exposures exceeding the Aggregate Commitment; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

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(b) To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 2:00 p.m., New York City time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e), by remittance to the Issuing Bank) by 4:00 p.m., New York City time, on the requested date of such Swingline Loan.

(c) The Swingline Lender may by written notice given to the Administrative Agent not later than 11:00 a.m., New York City time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.

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SECTION 2.06. Letters of Credit. (a) General. Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for its own account, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. Schedule 2.06 sets forth certain letters of credit issued by the Issuing Bank to the Borrower prior to the date hereof (the “Existing LCs”). Upon the effectiveness hereof, each Existing LC shall constitute a Letter of Credit issued hereunder and shall benefit from and be subject to the terms and conditions set forth herein for so long as such Existing LC remains outstanding.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $50,000,000, and (ii) the total Revolving Credit Exposures shall not exceed the Aggregate Commitment.

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five (5) Business Days prior to the Maturity Date; provided that any Letter of Credit issued in the final year of the credit facility evidenced by this Agreement may expire up to one year beyond the Maturity Date so long as the Borrower cash collateralizes 105% of the face amount of such Letter of Credit in the manner described in Section 2.06(j) no later than thirty (30) days prior to the Maturity Date, on terms and conditions reasonably acceptable to the Borrower, the Issuing Bank and the Administrative Agent. Any Letter of Credit with a one-year tenor may contain customary automatic renewal provisions agreed upon by the Borrower and the Issuing

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Bank that provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referenced in clause (ii) above), subject to a right on the part of the Issuing Bank to prevent any such renewal from occurring by giving notice to the beneficiary of such Letter of Credit in advance of any such renewal.

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, New York City time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon, New York City time, on (i) the Business Day that the Borrower receives such notice, if such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that, if such LC Disbursement is not less than $500,000, the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount of such LC Disbursement and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to

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the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

(f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

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(g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement.

(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

(i) Replacement of Issuing Bank. The Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit then outstanding and issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(j) Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders (the “LC Collateral Account”), an amount in cash equal to 105% of the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without

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demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Article VII. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account and the Borrower hereby grants the Administrative Agent a security interest in the LC Collateral Account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other Obligations. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived.

SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders and in an amount equal to such Lender’s Applicable Percentage of such Loan; provided that Swingline Loans shall be made as provided in Section 2.05. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained with the Administrative Agent in New York City or Chicago and designated by the Borrower in the applicable Borrowing Request; provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank.

(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

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SECTION 2.08. Interest Elections. (a) Each Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Revolving Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.

(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which Interest Period shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

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(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Revolving Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Revolving Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.09. Termination and Reduction of Commitments. (a) Unless previously terminated, the Commitments shall terminate on the Maturity Date.

(b) The Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11, the Revolving Credit Exposures would exceed the Aggregate Commitment.

(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

SECTION 2.10. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan on the Maturity Date and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two (2) Business Days after such Swingline Loan is made; provided that on each date that a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans then outstanding.

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(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

(e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

SECTION 2.11. Prepayment of Loans.

(a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with the provisions of this Section 2.11(a). The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., New York City time, one (1) Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09. Promptly following receipt of any such notice relating to a Revolving Borrowing, the

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Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by (i) accrued interest to the extent required by Section 2.13 and (ii) break funding payments pursuant to Section 2.16.

SECTION 2.12. Fees. (a)The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the Applicable Rate on the average daily amount of the excess of the Aggregate Commitment over the aggregate Revolving Credit Exposures during the period from and including the Effective Date to but excluding the date on which such Commitment terminates; provided, that the aggregate principal amount of Swingline Loans shall not be included in any determination of Revolving Credit Exposure for purposes of calculating the commitment fee. Accrued commitment fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurodollar Revolving Loans on the face amount of each outstanding Letter of Credit hereunder during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the face amount of each outstanding Letter of Credit hereunder during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees and commissions with respect to the issuance, amendment, cancellation, negotiation, transfer, presentment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Unless otherwise specified above, participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third (3^rd) Business Day following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

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(c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

(d) All fees payable hereunder shall be paid in Dollars on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.

SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section.

(d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans, upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Revolving Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

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SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or

(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be ineffective and shall be repaid on the last day of the then current Interest Period applicable thereto, and (ii) if any Borrowing Request requests a Eurodollar Revolving Borrowing, such Borrowing shall be made as an ABR Borrowing.

SECTION 2.15. Increased Costs. (a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;

(ii) impose on any Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein; or

(iii) subject the Administrative Agent, any Lender or the Issuing Bank to any Taxes (other than (A) Indemnified Taxes, (B) Excluded Taxes and (C) Other Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to the Administrative Agent or such Lender of making or maintaining any Loan or of maintaining its obligation to make any such Loan or to increase the cost to the Administrative Agent, such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by the Administrative Agent, such Lender or the Issuing Bank hereunder, whether of principal, interest or otherwise, then the Borrower will pay to the Administrative Agent, such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate the Administrative Agent, such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

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(b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

(c) A certificate of the Administrative Agent, a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate the Administrative Agent, such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay the Administrative Agent, such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

(d) Failure or delay on the part of the Administrative Agent, any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of the Administrative Agent’s, such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate the Administrative Agent, a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that the Administrative Agent, such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of the Administrative Agent’s, such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.11), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.11(a) and is revoked in accordance therewith) or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event,

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the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for Dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

SECTION 2.17. Taxes. (a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, the Borrower shall pay any Other Taxes imposed on or incurred by the Administrative Agent, a Lender or the Issuing Bank to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

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(e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate.

(f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.17 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.

(g) Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes and Other Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes or Other Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (g).

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(h) If a payment made to a Lender under any Loan Document would be subject to United States federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this paragraph (h), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(i) For purposes of this Section 2.17, the term “Lender” includes the Issuing Bank and the term “applicable law” includes FATCA.

SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, New York City time on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 10 South Dearborn Street, Chicago, Illinois 60603, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in Dollars.

(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.

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(c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements and Swingline Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Section until all such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account over which the Administrative Agent shall have exclusive control as cash collateral for, and application to, any future funding obligations of such Lender under any such Section, in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

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SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under the Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

SECTION 2.20. Expansion Option. The Borrower may from time to time elect to increase the Commitments or enter into one or more tranches of term loans (each an “Incremental Term Loan”), in each case in minimum increments of $10,000,000 so long as, after giving effect thereto, the aggregate amount of all such increases and Incremental Term Loans does not exceed $150,000,000. The Borrower may arrange for any such increase or tranche to be provided by one or more Lenders (each Lender so agreeing to an increase in its Commitment, or to participate in such Incremental Term Loans, an “Increasing Lender”), or by one or more new banks, financial institutions or other entities (each such new bank, financial institution or other entity, an “Augmenting Lender”), to increase their existing Commitments, or to participate in such Incremental Term Loans, or extend Commitments, as the case may be; provided that (i)

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each Increasing Lender and Augmenting Lender shall be subject to the approval of the Borrower, the Issuing Bank (in the case of an increase of the Commitments) and the Administrative Agent and (ii) (x) in the case of an Increasing Lender, the Borrower and such Increasing Lender execute an agreement substantially in the form of Exhibit C hereto, and (y) in the case of an Augmenting Lender, the Borrower and such Augmenting Lender execute an agreement substantially in the form of Exhibit D hereto. No consent of any Lender (other than the Issuing Bank and the Lenders participating in the increase or any Incremental Term Loan) shall be required for any increase in Commitments or Incremental Term Loans pursuant to this Section 2.20. Increases and new Commitments and Incremental Term Loans created pursuant to this Section 2.20 shall become effective on the date agreed by the Borrower, the Administrative Agent and the relevant Increasing Lenders or Augmenting Lenders and the Administrative Agent shall notify each Lender thereof. Notwithstanding the foregoing, no increase in the Commitments (or in the Commitment of any Lender) or tranche of Incremental Term Loans shall become effective under this paragraph unless, (i) on the proposed date of the effectiveness of such increase or Incremental Term Loans, (A) the conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be satisfied or waived by the Required Lenders and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer of the Borrower and (B) the Borrower shall be in compliance (on a pro forma basis reasonably acceptable to the Administrative Agent) with the covenants contained in Section 6.11 and (ii) the Administrative Agent shall have received documents consistent with those delivered on the Effective Date as to the corporate power and authority of the Borrower to borrow hereunder after giving effect to such increase. On the effective date of any increase in the Commitments, (i) each relevant Increasing Lender and Augmenting Lender shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Revolving Loans of all the Lenders to equal its Applicable Percentage of such outstanding Revolving Loans, and (ii) the Borrower shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date of any increase in the Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the Borrower, in accordance with the requirements of Section 2.03). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurodollar Loan, shall be subject to indemnification by the Borrower pursuant to the provisions of Section 2.16 if the deemed payment occurs other than on the last day of the related Interest Periods. The Incremental Term Loans (a) shall rank pari passu in right of payment with the Revolving Loans, (b) shall not mature earlier than the Maturity Date (but may have amortization prior to such date) and (c) shall be treated substantially the same as (and in any event no more favorably than) the Revolving Loans; provided that (i) the terms and conditions applicable to any tranche of Incremental Term Loans maturing after the Maturity Date may provide for material additional or different financial or other covenants or prepayment requirements applicable only during periods after the Maturity Date and (ii) the Incremental Term Loans may be priced differently than the Revolving Loans. Incremental Term Loans may be made hereunder pursuant to an amendment or restatement (an “Incremental Term Loan Amendment”) of this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Increasing Lender participating in such tranche,

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each Augmenting Lender participating in such tranche, if any, and the Administrative Agent. The Incremental Term Loan Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent, to effect the provisions of this Section 2.20. Nothing contained in this Section 2.20 shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to increase its Commitment hereunder, or provide Incremental Term Loans, at any time.

SECTION 2.21. Senior Debt. The Borrower hereby designates all Obligations now or hereinafter incurred or otherwise outstanding, and agrees that the Obligations shall at all times constitute, senior indebtedness and designated senior indebtedness, or terms of similar import, which are entitled to the benefits of the subordination provisions of all Subordinated Indebtedness.

SECTION 2.22. Designation of Foreign Subsidiary Borrowers. The Borrower may at any time and from time to time designate any Eligible Foreign Subsidiary as a Foreign Subsidiary Borrower by delivery to the Administrative Agent of a Borrowing Subsidiary Agreement executed by such Subsidiary and the Borrower and the satisfaction of the other conditions precedent set forth in Section 4.03, and upon such delivery and satisfaction such Subsidiary shall for all purposes of this Agreement be a Foreign Subsidiary Borrower and a party to this Agreement until the Borrower shall have executed and delivered to the Administrative Agent a Borrowing Subsidiary Termination with respect to such Subsidiary, whereupon such Subsidiary shall cease to be a Foreign Subsidiary Borrower and a party to this Agreement. Notwithstanding the preceding sentence, no Borrowing Subsidiary Termination will become effective as to any Foreign Subsidiary Borrower at a time when any principal of or interest on any Loan to such Foreign Subsidiary Borrower shall be outstanding hereunder, provided that such Borrowing Subsidiary Termination shall be effective to terminate the right of such Foreign Subsidiary Borrower to make further Borrowings under this Agreement. As soon as practicable upon receipt of a Borrowing Subsidiary Agreement, the Administrative Agent shall furnish a copy thereof to each Lender. The Borrower, any Foreign Subsidiary Borrowers and the Administrative Agent may, following approval of any Foreign Subsidiary as an Eligible Foreign Subsidiary by the Administrative Agent and the Lenders, effect such amendments to this Agreement and the Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent, to effect the provisions of this Section 2.22 and the designation of such Foreign Subsidiary as a Foreign Subsidiary Borrower. Such amendments shall include the addition of a guaranty by the Borrower of the Obligations of such Foreign Subsidiary Borrower.

SECTION 2.23. Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.12(a);

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(b) the Commitment and Revolving Credit Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02); provided, that, except as otherwise provided in Section 9.02, this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender affected thereby;

(c) if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

(i) all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent that the sum of all non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ Commitments;

(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one (1) Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize for the benefit of the Issuing Bank only the Borrower’ obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;

(iii) if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

(v) if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

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(d) so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.23(c), and participating interests in any such newly made Swingline Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.23(c)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to a Parent of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the Issuing Bank, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.

In the event that the Administrative Agent, the Borrower, the Swingline Lender and the Issuing Bank each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders that:

SECTION 3.01. Organization; Powers; Subsidiaries. Each of the Borrower and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required. Schedule 3.01 hereto (as supplemented from time to time) identifies each Subsidiary, noting whether such Subsidiary is a Material Domestic Subsidiary, the jurisdiction of its incorporation or organization, as the case may be, the percentage of issued and outstanding shares of each class of its capital stock or other equity interests owned by the Borrower and the other Subsidiaries and, if such percentage is not 100% (excluding directors’ qualifying shares as required by law), a description of each class issued and outstanding. All of the outstanding shares of capital stock and other equity interests of each Subsidiary are validly issued and outstanding and fully paid

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and nonassessable and all such shares and other equity interests indicated on Schedule 3.01 as owned by the Borrower or another Subsidiary are owned, beneficially and of record, by the Borrower or any Subsidiary free and clear of all Liens. There are no outstanding commitments or other obligations of the Borrower or any Subsidiary to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of the Borrower or any Subsidiary.

SECTION 3.02. Authorization; Enforceability. The Transactions are within each Loan Party’s organizational powers and have been duly authorized by all necessary organizational and, if required, shareholder action. The Loan Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.

SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal year ended December 31, 2011 reported on by Ernst & Young LLP, independent public accountants, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended March 31, 2012 and June 30, 2012, certified by its chief financial officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b) Since December 31, 2011, there has been no material adverse change in the business, assets, property or condition, financial or otherwise, of the Borrower and its Subsidiaries, taken as a whole.

SECTION 3.05. Properties. (a) Each of the Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.

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(b) Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.06. Litigation and Environmental Matters. (a) There are no actions, suits, proceedings or investigations by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve this Agreement or the Transactions. There are no labor controversies pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, or (ii) that involve this Agreement or the Transactions.

(b) Except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

(c) Neither the Borrower nor any Subsidiary is party or subject to any law, regulation, rule or order, or any obligation under any agreement or instrument, that has a Material Adverse Effect.

SECTION 3.07. Compliance with Laws and Agreements. Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.08. Investment Company Status. No Loan Party is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.

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SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders all agreements, instruments and organizational or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. Neither the Information Memorandum nor any of the other reports, financial statements, certificates or other information furnished by or on behalf of the Borrower or any Subsidiary to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

SECTION 3.12. Federal Reserve Regulations. No part of the proceeds of any Loan have been used or will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

SECTION 3.13. Liens. There are no Liens on any of the real or personal properties of the Borrower or any Subsidiary except for Liens permitted by Section 6.02.

SECTION 3.14. No Default. No Default or Event of Default has occurred and is continuing.

SECTION 3.15. No Burdensome Restrictions. The Borrower is not subject to any Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.08.

ARTICLE IV

Conditions

SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

(a) The Administrative Agent (or its counsel) shall have received from (i) each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and (ii) each initial Subsidiary Guarantor either (A) a counterpart of the Subsidiary Guaranty signed on behalf of such Subsidiary Guarantor or (B) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of the Subsidiary Guaranty) that such Subsidiary Guarantor has signed a counterpart of the Subsidiary Guaranty.

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(b) The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of Quarles & Brady LLP, counsel for the Loan Parties, substantially in the form of Exhibit B, and covering such other matters relating to the Loan Parties, the Loan Documents or the Transactions as the Administrative Agent shall reasonably request. The Borrower hereby requests such counsel to deliver such opinion.

(c) The Lenders shall have received (i) satisfactory audited consolidated financial statements of the Borrower for the three most recent fiscal years ended prior to the Effective Date as to which such financial statements are available, (ii) satisfactory unaudited interim consolidated financial statements of the Borrower for each quarterly period ended subsequent to the date of the latest financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are publicly available and (iii) satisfactory financial statement projections through and including the Borrower’s 2017 fiscal year, together with such information as the Administrative Agent and the Lenders shall reasonably request (including, without limitation, a detailed description of the assumptions used in preparing such projections).

(d) The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the initial Loan Parties, the authorization of the Transactions and any other legal matters relating to such Loan Parties, the Loan Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel and as further described in the list of closing documents attached as Exhibit E.

(e) The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of the Borrower, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.02.

(f) The Administrative Agent shall have received evidence reasonably satisfactory to it that all governmental and third party approvals necessary or, in the discretion of the Administrative Agent, advisable in connection with the Transactions and the continuing operations of the Borrower and its Subsidiaries have been obtained and are in full force and effect.

(g) The Administrative Agent shall have received evidence satisfactory to it that the Existing Credit Agreement shall have been terminated and cancelled and all indebtedness thereunder shall have been fully repaid (except to the extent being so repaid with the initial Revolving Loans) and any and all liens thereunder shall have been terminated.

(h) The Administrative Agent shall have received all fees and other amounts due and payable to the Administrative Agent or any Lender on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.

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The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.

SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

(a) The representations and warranties of the Borrower set forth in this Agreement shall be true and correct in all material respects on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, unless any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct in all material respects on and as of such earlier date.

(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

SECTION 4.03. Designation of a Foreign Subsidiary Borrower. The designation of a Foreign Subsidiary Borrower pursuant to Section 2.22 is subject to the condition precedent that the Borrower or such proposed Foreign Subsidiary Borrower shall have furnished or caused to be furnished to the Administrative Agent:

(a) Copies, certified by the Secretary or Assistant Secretary of such Subsidiary, of its Board of Directors’ resolutions (and resolutions of other bodies, if any are deemed necessary by counsel for the Administrative Agent) approving the Borrowing Subsidiary Agreement and any other Loan Documents to which such Subsidiary is becoming a party and such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of such Subsidiary;

(b) An incumbency certificate, executed by the Secretary or Assistant Secretary of such Subsidiary, which shall identify by name and title and bear the signature of the officers of such Subsidiary authorized to request Borrowings hereunder and sign the Borrowing Subsidiary Agreement and the other Loan Documents to which such Subsidiary is becoming a party, upon which certificate the Administrative Agent and the Lenders shall be entitled to rely until informed of any change in writing by the Borrower or such Subsidiary;

(c) Opinions of counsel to such Subsidiary, in form and substance reasonably satisfactory to the Administrative Agent and its counsel, with respect to the laws of its jurisdiction of organization and such other matters as are reasonably requested by counsel to the Administrative Agent and addressed to the Administrative Agent and the Lenders; and

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(d) Any promissory notes requested by any Lender, and any other instruments and documents reasonably requested by the Administrative Agent.

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:

SECTION 5.01. Financial Statements and Other Information. The Borrower will furnish to the Administrative Agent and each Lender:

(a) within ninety (90) days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Ernst & Young LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;

(b) within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(c) concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Borrower in substantially the form of Exhibit G (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.11 and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;

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(d) concurrently with any delivery of financial statements under clause (a) above, a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default under or in respect of Section 6.11 hereof (which certificate may be limited to the extent required by accounting rules or guidelines);

(e) as soon as available, but in any event not more than one hundred twenty (120) days after the commencement of each fiscal year of the Borrower, a copy of the final version of a plan and forecast (including a projected consolidated balance sheet, income statement and funds flow statement) of the Borrower for such fiscal year, in form reasonably satisfactory to the Administrative Agent;

(f) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be; and

(g) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request.

Documents required to be delivered pursuant to clauses (a), (b) and (f) of this Section 5.01 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which such documents are filed for public availability on the Securities and Exchange Commission’s Electronic Data Gathering and Retrieval System; provided that the Borrower shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the filing of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the compliance certificates required by clause (c) of this Section 5.01 to the Administrative Agent.

SECTION 5.02. Notices of Material Events. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following:

(a) the occurrence of any Default;

(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; and

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(d) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to (i) preserve, renew and keep in full force and effect its legal existence, (ii) preserve, renew and keep in full force and effect the rights, qualifications, licenses, permits, privileges, franchises, governmental authorizations and intellectual property rights material to the conduct of its business, and (iii) maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted except, in the case of the foregoing clauses (ii) and (iii), where the failure to do so would not have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.

SECTION 5.04. Payment of Obligations. The Borrower will, and will cause each of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.05. Maintenance of Properties; Insurance. The Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are currently maintained by the Borrower.

SECTION 5.06. Books and Records; Inspection Rights. The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested; provided, that in no event shall there be more than one such visit or inspection per calendar year except during the continuance of an Event of Default.

SECTION 5.07. Compliance with Laws and Material Contractual Obligations. The Borrower will, and will cause each of its Subsidiaries to, (i) comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property (including without limitation Environmental Laws) and (ii) perform in all material respects its obligations under material agreements to which it is a party, in each case except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

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SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only to finance the working capital needs, and for general corporate purposes, of the Borrower and its Subsidiaries in the ordinary course of business, Permitted Acquisitions and Restricted Payments. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

SECTION 5.09. Subsidiary Guaranty. As promptly as possible but in any event within thirty (30) days (or such later date as may be agreed upon by the Administrative Agent) after any Person becomes a Subsidiary or any Subsidiary qualifies independently as, or is designated by the Borrower or the Administrative Agent as, a Subsidiary Guarantor pursuant to the definitions of “Material Domestic Subsidiary” and “Subsidiary Guarantor”, the Borrower shall provide the Administrative Agent with written notice thereof setting forth information in reasonable detail describing the material assets of such Person and shall cause each such Subsidiary which also qualifies as a Subsidiary Guarantor to deliver to the Administrative Agent a joinder to the Subsidiary Guaranty (in the form contemplated thereby) pursuant to which such Subsidiary agrees to be bound by the terms and provisions of thereof, such Subsidiary Guaranty to be accompanied by appropriate corporate resolutions, other corporate documentation and legal opinions in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

SECTION 5.10. Delivery of ZES Articles of Incorporation. As promptly as possible but in any event within ten (10) Business Days (or such later date as may be agreed upon by the Administrative Agent) after the Effective Date, the Borrower shall deliver to the Administrative Agent a copy of the articles of incorporation of ZES certified as of a recent date by the Secretary of State of the State of California.

ARTICLE VI

Negative Covenants

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:

SECTION 6.01. Indebtedness. The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

(a) the Obligations;

(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and extensions, renewals and replacements of any such Indebtedness with Indebtedness of a similar type that does not increase the outstanding principal amount thereof;

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(c) intercompany Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided that Indebtedness of any Subsidiary that is not a Loan Party to any Loan Party shall be subject to the limitations set forth in Section 6.04(d);

(d) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary;

(e) Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred prior to or within one hundred eighty (180) days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) shall not exceed $25,000,000 at any time outstanding;

(f) Indebtedness of the Borrower or any Subsidiary incurred pursuant to Permitted Receivables Facilities; provided that the Attributable Receivables Indebtedness thereunder shall not exceed an aggregate amount of $125,000,000 at any time outstanding;

(g) Indebtedness of the Borrower or any Subsidiary as an account party in respect of trade letters of credit;

(h) Indebtedness of the Borrower or any Subsidiary secured by a Lien on any asset of the Borrower or any Subsidiary; provided that the aggregate outstanding principal amount of Indebtedness permitted by this clause (h) shall not in the aggregate exceed $25,000,000 at any time;

(i) unsecured Indebtedness of Foreign Subsidiaries in an aggregate principal amount not exceeding $100,000,000 at any time outstanding;

(j) unsecured Indebtedness of Subsidiaries (other than Subsidiary Guarantors) in an aggregate principal amount not exceeding $25,000,000 at any time outstanding;

(k) obligations relating to depository or securities custody relations with banks or other financial institutions and overdraft or similar obligations incurred in the ordinary course of business of the Borrower and its Subsidiaries;

(l) Indebtedness incurred by the Borrower or any of its Subsidiaries arising from agreements providing for indemnification, holdbacks, working capital or other purchase price adjustments, earn-outs or similar obligations, or from guaranties or letters of credit, surety bonds or performance bonds securing the performance of the Borrower or any Subsidiary pursuant to such agreements, in connection with Permitted Acquisitions or dispositions permitted under Section 6.03 of any business, assets or Subsidiary of the Borrower or any of its Subsidiaries;

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(m) Indebtedness consisting of a Sale and Leaseback Transaction permitted by Section 6.10;

(n) obligations under any Swap Agreements permitted under Section 6.05; and

(o) unsecured Indebtedness of the Borrower and the Subsidiary Guarantors; provided, that no Default or Event of Default has occurred and is continuing prior to the incurrence of such Indebtedness or would arise after giving effect (including pro forma effect) thereto.

SECTION 6.02. Liens. The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

(a) Permitted Encumbrances;

(b) any Lien on any property or asset of the Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(c) any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(d) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within one hundred eighty (180) days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Borrower or any Subsidiary;

(e) Liens arising under Permitted Receivables Facilities;

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(f) Liens (including the right of set off) attaching to deposit accounts or securities accounts of the Borrower or any of its Subsidiaries (i) relating to depository or securities custody relations with banks or other financial institutions or (ii) securing overdraft or similar obligations incurred in the ordinary course of business of the Borrower and its Subsidiaries; and

(g) Liens on assets of the Borrower and its Subsidiaries not otherwise permitted above so long as the aggregate principal amount of the Indebtedness subject to such Liens does not at any time exceed $25,000,000.

SECTION 6.03. Fundamental Changes and Asset Sales. (a) The Borrower will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) any of its assets (including pursuant to a Sale and Leaseback Transaction), or any of the Equity Interests of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing:

(i) any Person may merge into the Borrower in a transaction in which the Borrower is the surviving corporation;

(ii) any Subsidiary may merge into a Loan Party in a transaction in which the surviving entity is such Loan Party (provided that any such merger involving the Borrower must result in the Borrower as the surviving entity);

(iii) (A) any Loan Party may sell, transfer, lease or otherwise dispose of its assets, or any of the Equity Interests of any of its Subsidiaries, to another Loan Party and (B) any Subsidiary that is not a Loan Party may sell, transfer, lease or otherwise dispose of its assets, or any of the Equity Interests of any of its Subsidiaries, to the Borrower or any other Subsidiary;

(iv) the Borrower or any Subsidiary may sell Receivables under Permitted Receivables Facilities (subject to the limitation that the Attributable Receivables Indebtedness thereunder shall not exceed an aggregate amount of $125,000,000);

(v) the Borrower and its Subsidiaries may (A) sell inventory in the ordinary course of business, (B) effect sales, trade-ins or dispositions of used equipment for value in the ordinary course of business consistent with past practice, (C) enter into licenses of technology in the ordinary course of business, and (D) make any other sales, transfers, leases or dispositions that, together with all other property of the Borrower and its Subsidiaries previously leased, sold or disposed of as permitted by this clause (D) during any fiscal year of the Borrower, does not exceed an amount equal to ten percent (10%) of Consolidated Total Assets as of the end of the preceding fiscal year of the Borrower; and

(vi) any Subsidiary may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.

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(b) The Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.

(c) The Borrower will not, nor will it permit any of its Subsidiaries to, change its fiscal year from the basis in effect on the Effective Date.

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. The Borrower will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any Person or any assets of any other Person constituting a business unit, except:

(a) Permitted Investments;

(b) Permitted Acquisitions;

(c) investments by the Borrower or any Subsidiary existing on the date hereof in the Equity Interests of any Subsidiary;

(d) intercompany investments, loans or advances made by the Borrower in or to any Subsidiary or made by any Subsidiary in or to the Borrower or any other Subsidiary; provided that the aggregate amount of investments made, and loans and advances outstanding, during the term of this Agreement by any Loan Party in or to a Subsidiary that is not a Loan Party shall not exceed $50,000,000;

(e) Guarantees constituting Indebtedness permitted by Section 6.01;

(f) Guarantees by the Borrower of obligations of Subsidiaries under Swap Agreements permitted by Section 6.05; and

(g) any other investment, loan or advance (other than acquisitions) so long as the aggregate amount of all such investments, loans and advances does not exceed $50,000,000 during the term of this Agreement.

SECTION 6.05. Swap Agreements. The Borrower will not, and will not permit any of its Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Borrower or any Subsidiary has actual and future anticipated or expected exposure (other than those in respect of Equity Interests of the Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in order to effectively cap,

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collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary.

SECTION 6.06. Transactions with Affiliates. The Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Borrower and its wholly owned Subsidiaries not involving any other Affiliate and (c) any Restricted Payment permitted by Section 6.07.

SECTION 6.07. Restricted Payments. The Borrower will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (a) the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional shares of its common stock, (b) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (c) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for directors, management or employees of the Borrower and its Subsidiaries and (d) the Borrower may (i) repurchase, redeem or otherwise retire its Equity Interests and (ii) declare and pay cash dividends ratably with respect to its Equity Interests so long as the Leverage Ratio is less than 2.0 to 1.0 at the time of the applicable repurchase, redemption or retirement or the declaration of the applicable cash dividend after giving effect thereto on a pro forma basis and so long as no Default or Event of Default is then outstanding; provided, that, if no Default or Event of Default is then outstanding, but the Leverage Ratio is equal to or greater than 2.0 to 1.0 at the time of the applicable repurchase, redemption or retirement or the declaration of the applicable cash dividend after giving effect thereto on a pro forma basis, the Borrower may consummate such repurchase, redemption or retirement or pay such cash dividend so long as the aggregate amount paid in respect of all repurchases, redemptions and retirements made or cash dividends declared in the applicable calendar year does not exceed (i) if the Leverage Ratio is equal to or greater than 2.0 to 1.0 and less than 2.5 to 1.0 at the time of such repurchase, redemption, retirement or declaration after giving effect thereto on a pro forma basis, $100,000,000, (ii) if the Leverage Ratio is equal to or greater than 2.5 to 1.0 and less than 2.75 to 1.0 at the time of such repurchase, redemption, retirement or declaration after giving effect thereto on a pro forma basis, $50,000,000 or (iii) if the Leverage Ratio is equal to or greater than 2.75 to 1.0 at the time of such repurchase, redemption, retirement or declaration after giving effect thereto on a pro forma basis, $25,000,000; provided, further, that the Borrower shall provide the Administrative Agent with a written certification in respect of its compliance with any action under this clause (d) prior to the consummation thereof, with such certification being in form and substance reasonably acceptable to the Administrative Agent.

SECTION 6.08. Restrictive Agreements. The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions

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with respect to holders of its Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to a Permitted Receivables Facility or the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iii) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (iv) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.

SECTION 6.09. Subordinated Indebtedness and Amendments to Subordinated Indebtedness Documents. The Borrower will not, and will not permit any Subsidiary to, directly or indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or otherwise acquire, any Subordinated Indebtedness or any Indebtedness from time to time outstanding under the Subordinated Indebtedness Documents. Furthermore, the Borrower will not, and will not permit any Subsidiary to, amend the Subordinated Indebtedness Documents or any document, agreement or instrument evidencing any Indebtedness incurred pursuant to the Subordinated Indebtedness Documents (or any replacements, substitutions, extensions or renewals thereof) or pursuant to which such Indebtedness is issued where such amendment, modification or supplement provides for the following or which has any of the following effects:

(a) increases the overall principal amount of any such Indebtedness or increases the amount of any single scheduled installment of principal or interest;

(b) shortens or accelerates the date upon which any installment of principal or interest becomes due or adds any additional mandatory redemption provisions;

(c) shortens the final maturity date of such Indebtedness or otherwise accelerates the amortization schedule with respect to such Indebtedness;

(d) increases the rate of interest accruing on such Indebtedness;

(e) provides for the payment of additional fees or increases existing fees;

(f) amends or modifies any financial or negative covenant (or covenant which prohibits or restricts the Borrower or any Subsidiary from taking certain actions) in a manner which is more onerous or more restrictive in any material respect to the Borrower or such Subsidiary or which is otherwise materially adverse to the Borrower, any Subsidiary and/or the Lenders or, in the case of any such covenant, which places material additional restrictions on the Borrower or such Subsidiary or which requires the Borrower or such Subsidiary to comply with more restrictive financial ratios or which requires the Borrower to better its financial performance, in each case from that set forth in the existing applicable covenants in the Subordinated Indebtedness Documents or the applicable covenants in this Agreement; or

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(g) amends, modifies or adds any affirmative covenant in a manner which (i) when taken as a whole, is materially adverse to the Borrower, any Subsidiary and/or the Lenders or (ii) is more onerous than the existing applicable covenant in the Subordinated Indebtedness Documents or the applicable covenant in this Agreement.

SECTION 6.10. Sale and Leaseback Transactions. The Borrower shall not, nor shall it permit any Subsidiary to, enter into any Sale and Leaseback Transaction, other than (i) a Sale and Leaseback Transaction in respect of its property located at C2 Unit 23, Pittman Way, Fulwood, Preston, United Kingdom, and (ii) Sale and Leaseback Transactions in respect of which the net cash proceeds received in connection therewith do not exceed $20,000,000 in the aggregate during any fiscal year of the Borrower, determined on a consolidated basis for the Borrower and its Subsidiaries.

SECTION 6.11. Financial Covenants.

(a) Maximum Leverage Ratio. The Borrower will not permit the ratio (the “Leverage Ratio”), determined as of the end of each of its fiscal quarters ending on and after September 28, 2012 of (i) Consolidated Total Funded Indebtedness to (ii) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters ending with the end of such fiscal quarter, all calculated for the Borrower and its Subsidiaries on a consolidated basis, to be greater than 3.00 to 1.00.

(b) Minimum Interest Coverage Ratio. The Borrower will not permit the ratio (the “Interest Coverage Ratio”), determined as of the end of each of its fiscal quarters ending on and after September 28, 2012 of (i) Consolidated EBITDA to (ii) Consolidated Cash Interest Expense, in each case for the period of four (4) consecutive fiscal quarters ending with the end of such fiscal quarter, all calculated for the Borrower and its Subsidiaries on a consolidated basis, to be less than 3.50 to 1.00.

ARTICLE VII

Events of Default

If any of the following events (“Events of Default”) shall occur:

(a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) days;

(c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder

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or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect to the Borrower’s existence), 5.08, 5.09 or 5.10 or in Article VI;

(e) the Borrower or any Subsidiary Guarantor, as applicable, shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article) or any other Loan Document, and such failure shall continue unremedied for a period of thirty (30) days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);

(f) the Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable;

(g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

(i) the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

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(j) the Borrower or any Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

(k) one or more judgments for the payment of money in an aggregate amount in excess of $25,000,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment;

(l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

(m) a Change in Control shall occur;

(n) the occurrence of any “default”, as defined in any Loan Document (other than this Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided; or

(o) any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or the Borrower or any Subsidiary shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms), or any Subsidiary Guarantor shall fail to make payment when due under the Subsidiary Guaranty;

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder and under the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

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ARTICLE VIII

The Administrative Agent

Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, including execution of subordination agreements in respect of Subordinated Indebtedness (if any) and the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.

The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

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The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as the Administrative Agent.

Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrower. The Administrative Agent shall not be removed at any time or for any reason without its prior written consent. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

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None of the Lenders, if any, identified in this Agreement as a Syndication Agent or Documentation Agent shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to the relevant Lenders in their respective capacities as Syndication Agent or Documentation Agent, as applicable, as it makes with respect to the Administrative Agent in the preceding paragraph.

Except with respect to the exercise of setoff rights of any Lender, in accordance with Section 9.08, the proceeds of which are applied in accordance with this Agreement, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against the Borrower or with respect to any Loan Document, without the prior written consent of the Required Lenders or, as may be provided in this Agreement or the other Loan Documents, with the consent of the Administrative Agent.

The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender. The Administrative Agent shall have the exclusive right on behalf of the Lenders to enforce the payment of the principal of and interest on any Loan after the date such principal or interest has become due and payable pursuant to the terms of this Agreement.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

(i) if to the Borrower, to it at 475 Half Day Road, Suite 500, Lincolnshire, IL, 60069, Attention of Michael Budzik (Telecopy No. 847-793-5586; Telephone No. 847-793-6754);

(ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 10 S. Dearborn Street, Floor 7, Chicago, IL 60603-2003, Attention of Sharon Bosch (Telecopy No. (312) 385-7107), with a copy to JPMorgan Chase Bank, N.A., 10 S. Dearborn Street, Chicago, IL 60603-2300, Attention of Susan Thomas, Telecopy No. 888-303-9732);

(iii) if to the Issuing Bank, to it at JPMorgan Chase Bank, N.A., 10 S. Dearborn Street, Floor 7, Chicago, IL 60603-2003, Attention of Sharon Bosch (Telecopy No. (312) 385-7107);

(iv) if to the Swingline Lender, to it at JPMorgan Chase Bank, N.A., 10 S. Dearborn Street, Floor 7, Chicago, IL 60603-2003, Attention of Sharon Bosch (Telecopy No. (312) 385-7107); and

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(v) if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

(c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

(b) Except as provided in Section 2.20 with respect to an Incremental Term Loan Amendment and Section 2.22 with respect to the designation of a Foreign Subsidiary Borrower, neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender directly affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon (other than the waiver of default interest), or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly affected thereby, (iv) change Section 2.18(b) or

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(c), the definition of “Applicable Percentage” or any other provision providing for the pro rata nature of disbursements by or payments to Lenders in a manner that would alter the pro rata sharing of disbursements or payments required thereby, without the written consent of each Lender (it being understood that any increase (or any amendment effecting any increase) in the total Commitments or any Incremental Term Loan pursuant to Section 2.20 shall not be deemed to alter such pro rata sharing of disbursements or payments), (v) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender (it being understood that, solely with the consent of the parties prescribed by Section 2.20 to be parties to an Incremental Term Loan Amendment, Incremental Term Loans may be included in the determination of Required Lenders on substantially the same basis as the Commitments and the Revolving Loans are included on the Effective Date) or (vi) release all or substantially all of the Subsidiary Guarantors from their obligations under the Subsidiary Guaranty, without the written consent of each Lender; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be (it being understood that any change to Section 2.23 shall require the consent of the Administrative Agent, the Issuing Bank and the Swingline Lender). Notwithstanding the foregoing, no consent with respect to any amendment, waiver or other modification of this Agreement shall be required of any Defaulting Lender, except with respect to any amendment, waiver or other modification referred to in clause (i), (ii) or (iii) of the first proviso of this paragraph and then only in the event such Defaulting Lender shall be affected by such amendment, waiver or other modification.

(c) Notwithstanding the foregoing, this Agreement and any other Loan Document may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (x) to add one or more credit facilities (in addition to the Incremental Term Loans pursuant to an Incremental Term Loan Amendment) to this Agreement and to permit extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Revolving Loans, Incremental Term Loans and the accrued interest and fees in respect thereof and (y) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and Lenders.

(d) If, in connection with any proposed amendment, waiver or consent requiring the consent of “each Lender” or “each Lender affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but not obtained being referred to herein as a “Non-Consenting Lender”), then the Borrower may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrower and the Administrative Agent shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an

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Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04, and (ii) the Borrower shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the date of termination, including, without limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.

(e) Notwithstanding anything to the contrary herein the Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.

SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement and any other Loan Document, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b) The Borrower shall indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such

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Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount (it being understood that the Borrower’s failure to pay any such amount shall not relieve the Borrower of any default in the payment thereof); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such.

(d) To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable not later than fifteen (15) days after written demand therefor.

SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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(b)(i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A) the Borrower; provided, that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof; provided, further, that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee;

(B) the Administrative Agent; and

(C) the Issuing Bank.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, provided that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans;

(C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, such fee to be paid by either the assigning Lender or the assignee Lender or shared between such Lenders; and

(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

For the purposes of this Section 9.04(b), the term “Approved Fund” has the following meaning:

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“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

(iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the

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performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Commitments, Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(ii) A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as though it were a Lender.

(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

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SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.

SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or electronic attachment (e.g., .pdf or .tif) shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 9.07. Severability. Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final and in whatever currency denominated) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower or any Subsidiary Guarantor against any of and all the Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

75

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the internal laws (including, without limitation, 735 ILCS Section 105/5-1 et seq but otherwise without giving effect to the conflicts of laws provision) of the State of Illinois.

(b) The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any U.S. Federal or Illinois State court, and any appellate court from any thereof, sitting in Chicago, Illinois in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Illinois State court or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

(c) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

76

SECTION 9.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower. For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 9.13. USA PATRIOT Act. Each Lender that is subject to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies each Loan Party that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Act.

SECTION 9.14. Several Obligations; Nonreliance; Violation of Law. The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock for the repayment of the Borrowings provided for herein. Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrower in violation of any Requirement of Law. The Obligations of each Foreign Subsidiary Borrower are several and not joint, except to the extent that a Foreign Subsidiary Borrower has executed a Guarantee with respect to the Obligations of another Foreign Subsidiary Borrower.

77

SECTION 9.15. Disclosure. The Borrower and each Lender hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of the Borrower, its Subsidiaries and their respective Affiliates.

SECTION 9.16. Releases of Subsidiary Guarantors.

(a) A Subsidiary Guarantor shall automatically be released from its obligations under the Subsidiary Guaranty upon the consummation of any transaction permitted by this Agreement as a result of which such Subsidiary Guarantor ceases to be a Subsidiary; provided that, if so required by this Agreement, the Required Lenders shall have consented to such transaction and the terms of such consent shall not have provided otherwise. In connection with any termination or release pursuant to this Section, the Administrative Agent shall (and is hereby irrevocably authorized by each Lender to) execute and deliver to any Loan Party, at such Loan Party’s expense, all documents that such Loan Party shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent.

(b) At such time as the principal and interest on the Loans, all LC Disbursements, the fees, expenses and other amounts payable under the Loan Documents and the other Obligations (other than obligations under any Swap Agreement or any Banking Services Agreement, and other Obligations expressly stated to survive such payment and termination) shall have been paid in full in cash, the Commitments shall have been terminated and no Letters of Credit shall be outstanding, the Subsidiary Guaranty and all obligations (other than those expressly stated to survive such termination) of each Subsidiary Guarantor thereunder shall automatically terminate, all without delivery of any instrument or performance of any act by any Person.

SECTION 9.17. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively, the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest hereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

78

SECTION 9.18. No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement provided by the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Lenders and their Affiliates, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each of the Lenders and their Affiliates is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) no Lender or any of its Affiliates has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except, in the case of a Lender, those obligations expressly set forth herein and in the other Loan Documents; and (iii) each of the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and no Lender or any of its Affiliates has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against each of the Lenders and their Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

[Signature Pages Follow]

79

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

ZEBRA TECHNOLOGIES CORPORATION, as the Borrower
By
	Name: Michael C. Smiley
	Title: Chief Financial Officer

Signature Page to Credit Agreement

Zebra Technologies Corporation

JPMORGAN CHASE BANK, N.A., individually as a Lender, as the Swingline Lender, as the Issuing Bank and as Administrative Agent
By
	Name:
	Title:

Signature Page to Credit Agreement

Zebra Technologies Corporation

RBS CITIZENS, N.A., individually as a Lender
and as Syndication Agent

By

Name:

Title:

Signature Page to Credit Agreement

Zebra Technologies Corporation

WELLS FARGO BANK, NATIONAL ASSOCIATION, individually as a Lender and as Documentation Agent
By
	Name:
	Title:

Signature Page to Credit Agreement

Zebra Technologies Corporation

BANK OF AMERICA, N.A., as a Lender
By
	Name:
	Title:

Signature Page to Credit Agreement

Zebra Technologies Corporation

HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender
By
	Name:
	Title:

Signature Page to Credit Agreement

Zebra Technologies Corporation

THE NORTHERN TRUST COMPANY, as a Lender
By
	Name:
	Title:

Signature Page to Credit Agreement

Zebra Technologies Corporation

PNC BANK, NATIONAL ASSOCIATION, as a Lender
By
	Name:
	Title:

Signature Page to Credit Agreement

Zebra Technologies Corporation

SCHEDULE 2.01

COMMITMENTS

LENDER	COMMITMENT
JPMORGAN CHASE BANK, N.A.	$	55,000,000.00
RBS CITIZENS, N.A.	$	55,000,000.00
WELLS FARGO BANK, NATIONAL ASSOCIATION	$	40,000,000.00
BANK OF AMERICA, N.A.	$	25,000,000.00
HSBC BANK USA, NATIONAL ASSOCIATION	$	25,000,000.00
THE NORTHERN TRUST COMPANY	$	25,000,000.00
PNC BANK, NATIONAL ASSOCIATION	$	25,000,000.00
AGGREGATE COMMITMENT	$	250,000,000.00

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

1.    Assignor:
2.    Assignee:
	[and is an Affiliate/Approved Fund of [identify Lender]1]
3.    Borrower(s):	Zebra Technologies Corporation
4.    Administrative Agent:	JPMorgan Chase Bank, N.A., as the administrative agent under the Credit Agreement

¹  Select as applicable.

A-1

5.    Credit Agreement:	The Credit Agreement dated as of October 10, 2012 among Zebra Technologies Corporation, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents parties thereto
6.    Assigned Interest:

Aggregate Amount of Commitment/Loans for all Lenders	Amount of Commitment/ Loans Assigned	Percentage Assigned of Commitment/Loans2
$	$		%
$	$		%
$	$		%

Effective Date:                                  , 20             [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR
[NAME OF ASSIGNOR]
By:
	Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
	Title:

Consented to and Accepted:
JPMORGAN CHASE BANK, N.A., as Administrative Agent and Issuing Bank
By:
	Title:

²  Set forth, so at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

A-2

[Consented to:]3
ZEBRA TECHNOLOGIES CORPORATION
By:
	Title:

³  To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.

A-3

ANNEX I

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

A-4

3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of Illinois.

A-5

EXHIBIT B

OPINION OF COUNSEL FOR THE LOAN PARTIES

Attached

B-1

EXHIBIT C

FORM OF INCREASING LENDER SUPPLEMENT

INCREASING LENDER SUPPLEMENT, dated                                 , 20         (this “Supplement”), by and among each of the signatories hereto, to the Credit Agreement, dated as of October 10, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Zebra Technologies Corporation (the “Borrower”), the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H

WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the Borrower has the right, subject to the terms and conditions thereof, to effectuate from time to time an increase in the aggregate Commitment and/or one or more tranches of Incremental Term Loans under the Credit Agreement by requesting one or more Lenders to increase the amount of its Commitment and/or to participate in such a tranche;

WHEREAS, the Borrower has given notice to the Administrative Agent of its intention to [increase the Aggregate Commitment] [and] [enter into a tranche of Incremental Term Loans] pursuant to such Section 2.20; and

WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the undersigned Increasing Lender now desires to [increase the amount of its Commitment] [and] [participate in a tranche of Incremental Term Loans] under the Credit Agreement by executing and delivering to the Borrower and the Administrative Agent this Supplement;

NOW, THEREFORE, each of the parties hereto hereby agrees as follows:

1. The undersigned Increasing Lender agrees, subject to the terms and conditions of the Credit Agreement, that on the date of this Supplement it shall [have its Commitment increased by $[            ], thereby making the aggregate amount of its total Commitments equal to $[            ]] [and] [participate in a tranche of Incremental Term Loans with a commitment amount equal to $[            ] with respect thereto].

2. The Borrower hereby represents and warrants that no Default or Event of Default has occurred and is continuing on and as of the date hereof.

3. Terms defined in the Credit Agreement shall have their defined meanings when used herein.

4. This Supplement shall be governed by, and construed in accordance with, the laws of the State of Illinois.

5. This Supplement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same document.

C-1

IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.

[INSERT NAME OF INCREASING LENDER]

By:

Name:

Title:

Accepted and agreed to as of the date first written above:

ZEBRA TECHNOLOGIES CORPORATION

By:

Name:

Title:

Acknowledged as of the date first written above:

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

By:

Name:

Title:

[JPMORGAN CHASE BANK, N.A.

as Issuing Bank

By:

Name:

Title:]

C-2

EXHIBIT D

FORM OF AUGMENTING LENDER SUPPLEMENT

AUGMENTING LENDER SUPPLEMENT, dated                                 , 20         (this “Supplement”), to the Credit Agreement, dated as of October 10, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Zebra Technologies Corporation (the “Borrower”), the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H

WHEREAS, the Credit Agreement provides in Section 2.20 thereof that any bank, financial institution or other entity may [extend Commitments] [and] [participate in tranches of Incremental Term Loans] under the Credit Agreement subject to the approval of the Borrower, [the Issuing Bank] and the Administrative Agent, by executing and delivering to the Borrower and the Administrative Agent a supplement to the Credit Agreement in substantially the form of this Supplement; and

WHEREAS, the undersigned Augmenting Lender was not an original party to the Credit Agreement but now desires to become a party thereto;

NOW, THEREFORE, each of the parties hereto hereby agrees as follows:

1. The undersigned Augmenting Lender agrees to be bound by the provisions of the Credit Agreement and agrees that it shall, on the date of this Supplement, become a Lender for all purposes of the Credit Agreement to the same extent as if originally a party thereto, with a Commitment with respect to Revolving Loans of $[            ] [and] [a commitment with respect to Incremental Term Loans of $[            ]].

2. The undersigned Augmenting Lender (a) represents and warrants that it is legally authorized to enter into this Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and has reviewed such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Supplement; (c) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

D-1

3. The undersigned’s address for notices for the purposes of the Credit Agreement is as follows:

[            ]

4. The Borrower hereby represents and warrants that no Default or Event of Default has occurred and is continuing on and as of the date hereof.

5. Terms defined in the Credit Agreement shall have their defined meanings when used herein.

6. This Supplement shall be governed by, and construed in accordance with, the laws of the State of Illinois.

7. This Supplement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same document.

[remainder of this page intentionally left blank]

D-2

IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.

[INSERT NAME OF AUGMENTING LENDER]

By:

Name:

Title:

Accepted and agreed to as of the date first written above:

ZEBRA TECHNOLOGIES CORPORATION

By:

Name:

Title:

Acknowledged as of the date first written above:

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

By:

Name:

Title:

[JPMORGAN CHASE BANK, N.A.

as Issuing Bank

By:

Name:

Title:]

D-3

EXHIBIT E

LIST OF CLOSING DOCUMENTS

ZEBRA TECHNOLOGIES CORPORATION

CREDIT FACILITY

October 10, 2012

LIST OF CLOSING DOCUMENTS¹

A. LOAN DOCUMENTS

1. Credit Agreement (the “Credit Agreement”) by and among Zebra Technologies Corporation, a Delaware corporation (the “Borrower”), the institutions from time to time parties thereto as Lenders (the “Lenders”) and JPMorgan Chase Bank, N.A., in its capacity as Administrative Agent for itself and the other Lenders (the “Administrative Agent”), evidencing a revolving credit facility to the Borrower from the Lenders in an initial aggregate principal amount of $250,000,000.

SCHEDULES

Schedule 2.01	—	Commitments
Schedule 2.06	—	Existing LCs
Schedule 3.01	—	Subsidiaries
Schedule 6.01	—	Existing Indebtedness
Schedule 6.02	—	Existing Liens
EXHIBITS
Exhibit A	—	Form of Assignment and Assumption
Exhibit B	—	Form of Opinion of Loan Parties’ Counsel
Exhibit C	—	Form of Increasing Lender Supplement
Exhibit D	—	Form of Augmenting Lender Supplement
Exhibit E	—	List of Closing Documents
Exhibit F	—	Form of Subsidiary Guaranty
Exhibit G	—	Form of Compliance Certificate
Exhibit H-1	—	Form of Borrowing Subsidiary Agreement
Exhibit H-2	—	Form of Borrowing Subsidiary Termination

¹  Each capitalized term used herein and not defined herein shall have the meaning assigned to such term in the above-defined Credit Agreement. Items appearing in bold and italics shall be prepared and/or provided by the Borrower and/or Borrower’s counsel.

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2. Notes executed by the Borrower in favor of each of the Lenders, if any, which has requested a note pursuant to Section 2.10(e) of the Credit Agreement.

3. Guaranty executed by the initial Subsidiary Guarantors (collectively with the Borrower, the “Loan Parties”) in favor of the Administrative Agent.

B. CORPORATE DOCUMENTS

4. Certificate of the Secretary, an Assistant Secretary or a Manager of each Loan Party certifying (i) that there have been no changes in the Certificate of Incorporation or other charter document of such Loan Party, as attached thereto and as certified as of a recent date (other than with respect to ZES) by the Secretary of State of the jurisdiction of its organization, since the date of the certification thereof by such secretary of state, (ii) the By-Laws or other applicable organizational document, as attached thereto, of such Loan Party as in effect on the date of such certification, (iii) resolutions of the Board of Directors or other governing body of such Loan Party authorizing the execution, delivery and performance of each Loan Document to which it is a party, and (iv) the names and true signatures of the incumbent officers of each Loan Party authorized to sign the Loan Documents to which it is a party, and (in the case of the Borrower) authorized to request a Borrowing or the issuance of a Letter of Credit under the Credit Agreement.

5. Good Standing Certificate for each Loan Party from the Secretary of State of the jurisdiction of its organization.

C. OPINIONS

6. Opinion of Quarles & Brady LLP, counsel for the Loan Parties.

D. CLOSING CERTIFICATES AND MISCELLANEOUS

7. A Certificate signed by the President, a Vice President or a Financial Officer of the Borrower certifying the following: (i) all of the representations and warranties of the Borrower set forth in the Credit Agreement are true and correct and (ii) no Default has occurred and is then continuing.

8. Payoff documentation providing evidence satisfactory to the Administrative Agent that the Existing Credit Agreement has been terminated and cancelled (along with all of the agreements, documents and instruments delivered in connection therewith) and all Indebtedness owing thereunder has been repaid and any and all liens thereunder have been terminated.

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EXHIBIT F

FORM OF SUBSIDIARY GUARANTY

GUARANTY

THIS GUARANTY (as amended, restated, supplemented or otherwise modified from time to time, this “Guaranty”) is made as of October 10, 2012, by and among each of the undersigned Affiliates of Zebra Technologies Corporation (the “Initial Guarantors” and along with any additional Subsidiaries of Zebra Technologies Corporation which become parties to this Guaranty by executing a supplement hereto in the form attached as Annex I, the “Guarantors”) in favor of the Administrative Agent, for the ratable benefit of the Holders of Guaranteed Obligations (as defined below), under the Credit Agreement referred to below.

WITNESSETH

WHEREAS, Zebra Technologies Corporation, a Delaware corporation (the “Borrower”), the institutions from time to time parties thereto as lenders (the “Lenders”), and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Administrative Agent”), have entered into a certain Credit Agreement dated as of October 10, 2012 (as the same may be amended, modified, supplemented and/or restated, and as in effect from time to time, the “Credit Agreement”), providing, subject to the terms and conditions thereof, for extensions of credit and other financial accommodations to be made by the Lenders to the Borrower;

WHEREAS, it is a condition precedent to the extensions of credit by the Lenders under the Credit Agreement that each of the Guarantors (constituting all of the Subsidiaries of the Borrower required to execute this Guaranty pursuant to Section 5.09 of the Credit Agreement) execute and deliver this Guaranty, whereby each of the Guarantors shall guarantee the payment when due of all Obligations; and

WHEREAS, in consideration of the direct and indirect financial and other support that the Borrower has provided, and such direct and indirect financial and other support as the Borrower may in the future provide, to the Guarantors, and in order to induce the Lenders and the Administrative Agent to enter into the Credit Agreement, each of the Guarantors is willing to guarantee the Obligations of the Borrower;

NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. Definitions. Terms defined in the Credit Agreement and not otherwise defined herein have, as used herein, the respective meanings provided for therein.

SECTION 2. Representations, Warranties and Covenants. Each of the Guarantors represents and warrants to each Holder of Guaranteed Obligations and the Administrative Agent (which representations and warranties shall be deemed to have been

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renewed at the time of the making, conversion or continuation of any Loan or issuance, amendment, renewal or extension of any Letter of Credit or at any other time the Borrower re-makes its representations and warranties under the Credit Agreement) that:

(A) It is a corporation, partnership or limited liability company duly and properly incorporated or organized, as the case may be, validly existing and (to the extent such concept applies to such entity) in good standing under the laws of its jurisdiction of incorporation, organization or formation and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except to the extent that the failure to have such authority could not reasonably be expected to have a Material Adverse Effect.

(B) It (to the extent applicable) has the requisite power and authority and legal right to execute and deliver this Guaranty and to perform its obligations hereunder. The execution and delivery by each Guarantor of this Guaranty and the performance by each of its obligations hereunder have been duly authorized by proper proceedings, and this Guaranty constitutes a legal, valid and binding obligation of such Guarantor, respectively, enforceable against such Guarantor, respectively, in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally.

(C) Neither the execution and delivery by it of this Guaranty, nor the consummation by it of the transactions herein contemplated, nor compliance by it with the provisions hereof will (i) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on it or its articles or certificate of incorporation (or equivalent charter documents), limited liability company or partnership agreement, certificate of partnership, articles or certificate of organization, by-laws, or operating agreement or other management agreement, as the case may be, or the provisions of any indenture, instrument or agreement to which the Borrower or any of its Subsidiaries is a party or is subject, or by which it, or its property, is bound, or (ii) conflict with, or constitute a default under, or result in, or require, the creation or imposition of any Lien in, of or on its property pursuant to the terms of, any such indenture, instrument or agreement (other than any Loan Document). No order, consent, adjudication, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or authority, or any subdivision thereof, which has not been obtained by it, is required to be obtained by it in connection with the execution, delivery and performance by it of, or the legality, validity, binding effect or enforceability against it of, this Guaranty.

In addition to the foregoing, each of the Guarantors covenants that, so long as any Lender has any Commitment or Letter of Credit outstanding under the Credit Agreement or any amount payable under the Credit Agreement or any other Guaranteed Obligations (other than contingent indemnity obligations) shall remain unpaid, it will, and, if necessary, will enable the Borrower to, fully comply with those covenants and agreements of the Borrower applicable to such Guarantor set forth in the Credit Agreement.

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SECTION 3. The Guaranty. Each of the Guarantors hereby unconditionally guarantees, jointly with the other Guarantors and severally, the full and punctual payment and performance when due (whether at stated maturity, upon acceleration or otherwise) of the Obligations, including, without limitation, (i) the principal of and interest on each Loan made to the Borrower pursuant to the Credit Agreement, (ii) any obligations of the Borrower to reimburse LC Disbursements (“Reimbursement Obligations”), (iii) all obligations of the Borrower or any of its Subsidiaries owing to any Lender or any affiliate of any Lender under any Swap Agreement or Banking Services Agreement, (iv) all other amounts payable by the Borrower or any of its Subsidiaries under the Credit Agreement, any Swap Agreement, any Banking Services Agreement and the other Loan Documents and (v) the punctual and faithful performance, keeping, observance, and fulfillment by the Borrower of all of the agreements, conditions, covenants, and obligations of the Borrower contained in the Loan Documents (all of the foregoing being referred to collectively as the “Guaranteed Obligations” and the holders from time to time of the Guaranteed Obligations being referred to collectively as the “Holders of Guaranteed Obligations”). Upon (x) the failure by the Borrower or any of its Affiliates, as applicable, to pay punctually any such amount or perform such obligation, and (y) such failure continuing beyond any applicable grace or notice and cure period, each of the Guarantors agrees that it shall forthwith on demand pay such amount or perform such obligation at the place and in the manner specified in the Credit Agreement, any Swap Agreement, any Banking Services Agreement or the relevant Loan Document, as the case may be. Each of the Guarantors hereby agrees that this Guaranty is an absolute, irrevocable and unconditional guaranty of payment and is not a guaranty of collection. All payments shall be made in Dollars.

SECTION 4. Guaranty Unconditional. The obligations of each of the Guarantors hereunder shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

(A) any extension, renewal, settlement, indulgence, compromise, waiver or release of or with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto, or with respect to any obligation of any other guarantor of any of the Guaranteed Obligations, whether (in any such case) by operation of law or otherwise, or any failure or omission to enforce any right, power or remedy with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto, or with respect to any obligation of any other guarantor of any of the Guaranteed Obligations;

(B) any modification or amendment of or supplement to the Credit Agreement, any Swap Agreement, any Banking Services Agreement or any other Loan Document, including, without limitation, any such amendment which may increase the amount of, or the interest rates applicable to, any of the Obligations guaranteed hereby;

(C) any release, surrender, compromise, settlement, waiver, subordination or modification, with or without consideration, of any collateral securing the Guaranteed Obligations or any part thereof, any other guaranties with respect to the Guaranteed Obligations or any part thereof, or any other obligation of any person or entity with respect to the Guaranteed Obligations or any part thereof, or any nonperfection or invalidity of any direct or indirect security for the Guaranteed Obligations;

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(D) any change in the corporate, partnership, limited liability company or other existence, structure or ownership of the Borrower or any other guarantor of any of the Guaranteed Obligations, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Borrower or any other guarantor of the Guaranteed Obligations, or any of their respective assets or any resulting release or discharge of any obligation of the Borrower or any other guarantor of any of the Guaranteed Obligations;

(E) the existence of any claim, setoff or other rights which the Guarantors may have at any time against the Borrower, any other guarantor of any of the Guaranteed Obligations, the Administrative Agent, any Holder of Guaranteed Obligations or any other Person, whether in connection herewith or in connection with any unrelated transactions; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

(F) the enforceability or validity of the Guaranteed Obligations or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto or with respect to any collateral securing the Guaranteed Obligations or any part thereof, or any other invalidity or unenforceability relating to or against the Borrower or any other guarantor of any of the Guaranteed Obligations, for any reason related to the Credit Agreement, any Swap Agreement, any Banking Services Agreement, any other Loan Document, or any provision of applicable law, decree, order or regulation of any jurisdiction purporting to prohibit the payment by the Borrower or any other guarantor of the Guaranteed Obligations, of any of the Guaranteed Obligations or otherwise affecting any term of any of the Guaranteed Obligations;

(G) the failure of the Administrative Agent to take any steps to perfect and maintain any security interest in, or to preserve any rights to, any security or collateral for the Guaranteed Obligations, if any;

(H) the election by, or on behalf of, any one or more of the Holders of Guaranteed Obligations, in any proceeding instituted under Chapter 11 of Title 11 of the United States Code (11 U.S.C. 101 et seq.) (or any successor statute, the “Bankruptcy Code”), of the application of Section 1111(b)(2) of the Bankruptcy Code;

(I) any borrowing or grant of a security interest by the Borrower, as debtor-in-possession, under Section 364 of the Bankruptcy Code;

(J) the disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of the claims of the Holders of Guaranteed Obligations or the Administrative Agent for repayment of all or any part of the Guaranteed Obligations;

(K) the failure of any other guarantor to sign or become party to this Guaranty or any amendment, change, or reaffirmation hereof; or

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(L) any other act or omission to act or delay of any kind by the Borrower, any other guarantor of the Guaranteed Obligations, the Administrative Agent, any Holder of Guaranteed Obligations or any other Person or any other circumstance whatsoever which might, but for the provisions of this Section 4, constitute a legal or equitable discharge of any Guarantor’s obligations hereunder except as provided in Section 5.

SECTION 5. Discharge Only Upon Payment In Full: Reinstatement In Certain Circumstances. Each of the Guarantors’ obligations hereunder shall remain in full force and effect until all Guaranteed Obligations (other than contingent indemnity obligations) shall have been paid in full in cash and the Commitments and all Letters of Credit issued under the Credit Agreement shall have terminated or expired. If at any time any payment of the principal of or interest on any Loan, any Reimbursement Obligation or any other amount payable by the Borrower or any other party under the Credit Agreement, any Swap Agreement, any Banking Services Agreement or any other Loan Document (including a payment effected through exercise of a right of setoff) is rescinded, or is or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise (including pursuant to any settlement entered into by a Holder of Guaranteed Obligations in its discretion), each of the Guarantors’ obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time.

SECTION 6. General Waivers; Additional Waivers.

(A) General Waivers. Each of the Guarantors irrevocably waives acceptance hereof, presentment, demand or action on delinquency, protest, the benefit of any statutes of limitations and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Borrower, any other guarantor of the Guaranteed Obligations, or any other Person.

(B) Additional Waivers. Notwithstanding anything herein to the contrary, each of the Guarantors hereby absolutely, unconditionally, knowingly, and expressly waives, to the fullest extent permitted by law:

(i) any right it may have to revoke this Guaranty as to future indebtedness or notice of acceptance hereof;

(ii) (a) notice of acceptance hereof; (b) notice of any loans or other financial accommodations made or extended under the Loan Documents or the creation or existence of any Guaranteed Obligations; (c) notice of the amount of the Guaranteed Obligations, subject, however, to each Guarantor’s right to make inquiry of Administrative Agent and Holders of Guaranteed Obligations to ascertain the amount of the Guaranteed Obligations at any reasonable time; (d) notice of any adverse change in the financial condition of the Borrower or of any other fact that might increase such Guarantor’s risk hereunder; (e) notice of presentment for payment, demand, protest, and notice thereof as to any instruments among the Loan Documents; (f) notice of any

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Default or Event of Default; and (g) all other notices (except if such notice is specifically required to be given to such Guarantor hereunder or under the Loan Documents) and demands to which each Guarantor might otherwise be entitled;

(iii) its right, if any, to require the Administrative Agent and the other Holders of Guaranteed Obligations to institute suit against, or to exhaust any rights and remedies which the Administrative Agent and the other Holders of Guaranteed Obligations has or may have against, the other Guarantors or any third party, or against any collateral provided by the other Guarantors, or any third party; and each Guarantor further waives any defense arising by reason of any disability or other defense (other than the defense that the Guaranteed Obligations shall have been fully and finally performed and indefeasibly paid in full in cash) of the other Guarantors or by reason of the cessation from any cause whatsoever of the liability of the other Guarantors in respect thereof;

(iv) (a) any rights to assert against the Administrative Agent and the other Holders of Guaranteed Obligations any defense (legal or equitable), set-off, counterclaim, or claim which such Guarantor may now or at any time hereafter have against the other Guarantors or any other party liable to the Administrative Agent and the other Holders of Guaranteed Obligations; (b) any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Guaranteed Obligations or any security therefor; (c) any defense such Guarantor has to performance hereunder, and any right such Guarantor has to be exonerated, arising by reason of: the impairment or suspension of the Administrative Agent’s and the other Holders of Guaranteed Obligations’ rights or remedies against the other Guarantors; the alteration by the Administrative Agent and the other Holders of Guaranteed Obligations of the Guaranteed Obligations; any discharge of the other Guarantors’ obligations to the Administrative Agent and the other Holders of Guaranteed Obligations by operation of law as a result of the Administrative Agent’s and the other Holders of Guaranteed Obligations’ intervention or omission; or the acceptance by the Administrative Agent and the other Holders of Guaranteed Obligations of anything in partial satisfaction of the Guaranteed Obligations; and (d) the benefit of any statute of limitations affecting such Guarantor’s liability hereunder or the enforcement thereof, and any act which shall defer or delay the operation of any statute of limitations applicable to the Guaranteed Obligations shall similarly operate to defer or delay the operation of such statute of limitations applicable to such Guarantor’s liability hereunder; and

(v) any defense arising by reason of or deriving from (a) any claim or defense based upon an election of remedies by the Administrative Agent and the other Holders of Guaranteed Obligations; or (b) any election by the Administrative Agent and the other Holders of Guaranteed Obligations under Section 1111(b) of Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect (or any successor statute), to limit the amount of, or any collateral securing, its claim against the Guarantors.

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SECTION 7. Subordination of Subrogation; Subordination of Intercompany Indebtedness.

(A) Subordination of Subrogation. Until the Guaranteed Obligations (other than contingent indemnity obligations) have been fully and finally performed and indefeasibly paid in full in cash, the Guarantors (i) shall have no right of subrogation with respect to such Guaranteed Obligations and (ii) waive any right to enforce any remedy which the Holders of Guaranteed Obligations, the Issuing Bank or the Administrative Agent now have or may hereafter have against the Borrower, any endorser or any guarantor of all or any part of the Guaranteed Obligations or any other Person, and the Guarantors waive any benefit of, and any right to participate in, any security or collateral given to the Holders of Guaranteed Obligations, the Issuing Bank and the Administrative Agent to secure the payment or performance of all or any part of the Guaranteed Obligations or any other liability of the Borrower to the Holders of Guaranteed Obligations, the Issuing Bank or the Administrative Agent. Should any Guarantor have the right, notwithstanding the foregoing, to exercise its subrogation rights, each Guarantor hereby expressly and irrevocably (A) subordinates any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off that such Guarantor may have to the indefeasible payment in full in cash of the Guaranteed Obligations and (B) waives any and all defenses available to a surety, guarantor or accommodation co-obligor until the Guaranteed Obligations are indefeasibly paid in full in cash. Each Guarantor acknowledges and agrees that this subordination is intended to benefit the Administrative Agent and the other Holders of Guaranteed Obligations and shall not limit or otherwise affect such Guarantor’s liability hereunder or the enforceability of this Guaranty, and that the Administrative Agent, the other Holders of Guaranteed Obligations and their respective successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this Section 7(A).

(B) Subordination of Intercompany Indebtedness. Each Guarantor agrees that any and all claims of such Guarantor against the Borrower or any other Guarantor hereunder (each an “Obligor”) with respect to any “Intercompany Indebtedness” (as hereinafter defined), any endorser, obligor or any other guarantor of all or any part of the Guaranteed Obligations, or against any of its properties shall be subordinate and subject in right of payment to the prior payment, in full and in cash, of all Guaranteed Obligations (other than contingent indemnity obligations); provided that, as long as no Event of Default has occurred and is continuing, such Guarantor may receive payments of principal and interest from any Obligor with respect to Intercompany Indebtedness. Notwithstanding any right of any Guarantor to ask, demand, sue for, take or receive any payment from any Obligor, all rights, liens and security interests of such Guarantor, whether now or hereafter arising and howsoever existing, in any assets of any other Obligor shall be and are subordinated to the rights of the Holders of Guaranteed Obligations and the Administrative Agent in those assets. No Guarantor shall have any right to possession of any such asset or to foreclose upon any such asset, whether by judicial action or otherwise, unless and until all of the Guaranteed Obligations (other than contingent indemnity obligations) shall have been fully paid and satisfied (in cash) and

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all financing arrangements pursuant to any Loan Document, any Swap Agreement or any Banking Services Agreement have been terminated. If all or any part of the assets of any Obligor, or the proceeds thereof, are subject to any distribution, division or application to the creditors of such Obligor, whether partial or complete, voluntary or involuntary, and whether by reason of liquidation, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action or proceeding, or if the business of any such Obligor is dissolved or if substantially all of the assets of any such Obligor are sold, then, and in any such event (such events being herein referred to as an “Insolvency Event”), any payment or distribution of any kind or character, either in cash, securities or other property, which shall be payable or deliverable upon or with respect to any indebtedness of any Obligor to any Guarantor (“Intercompany Indebtedness”) shall be paid or delivered directly to the Administrative Agent for application on any of the Guaranteed Obligations, due or to become due, until such Guaranteed Obligations (other than contingent indemnity obligations) shall have first been fully paid and satisfied (in cash). Should any payment, distribution, security or instrument or proceeds thereof be received by the applicable Guarantor upon or with respect to the Intercompany Indebtedness after any Insolvency Event and prior to the satisfaction of all of the Guaranteed Obligations (other than contingent indemnity obligations) and the termination of all financing arrangements pursuant to any Loan Document among the Borrower and the Holders of Guaranteed Obligations, such Guarantor shall receive and hold the same in trust, as trustee, for the benefit of the Holders of Guaranteed Obligations and shall forthwith deliver the same to the Administrative Agent, for the benefit of the Holders of Guaranteed Obligations, in precisely the form received (except for the endorsement or assignment of the Guarantor where necessary), for application to any of the Guaranteed Obligations, due or not due, and, until so delivered, the same shall be held in trust by the Guarantor as the property of the Holders of Guaranteed Obligations. If any such Guarantor fails to make any such endorsement or assignment to the Administrative Agent, the Administrative Agent or any of its officers or employees is irrevocably authorized to make the same. Each Guarantor agrees that until the Guaranteed Obligations (other than the contingent indemnity obligations) have been paid in full (in cash) and satisfied and all financing arrangements pursuant to any Loan Document among the Borrower and the Holders of Guaranteed Obligations have been terminated, no Guarantor will assign or transfer to any Person (other than the Administrative Agent) any claim any such Guarantor has or may have against any Obligor.

SECTION 8. Contribution with Respect to Guaranteed Obligations.

(A) To the extent that any Guarantor shall make a payment under this Guaranty (a “Guarantor Payment”) which, taking into account all other Guarantor Payments then previously or concurrently made by any other Guarantor, exceeds the amount which otherwise would have been paid by or attributable to such Guarantor if each Guarantor had paid the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same proportion as such Guarantor’s “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Guarantors as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash

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of the Guarantor Payment and the Guaranteed Obligations (other than contingent indemnity obligations) and termination of the Credit Agreement, the Swap Agreements and the Banking Services Agreements (including all commitments thereunder and Letters of Credit issued pursuant thereto), such Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

(B) As of any date of determination, the “Allocable Amount” of any Guarantor shall be equal to the excess of the fair saleable value of the property of such Guarantor over the total liabilities of such Guarantor (including the maximum amount reasonably expected to become due in respect of contingent liabilities, calculated, without duplication, assuming each other Guarantor that is also liable for such contingent liability pays its ratable share thereof), giving effect to all payments made by other Guarantors as of such date in a manner to maximize the amount of such contributions.

(C) This Section 8 is intended only to define the relative rights of the Guarantors, and nothing set forth in this Section 8 is intended to or shall impair the obligations of the Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Guaranty.

(D) The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Guarantor or Guarantors to which such contribution and indemnification is owing.

(E) The rights of the indemnifying Guarantors against other Guarantors under this Section 8 shall be exercisable upon the full and indefeasible payment of the Guaranteed Obligations (other than contingent indemnity obligations) in cash and the termination of the Credit Agreement, the Swap Agreements and the Banking Services Agreements (including all Commitments thereunder and Letters of Credit issued pursuant thereto).

SECTION 9. Limitation of Guaranty. Notwithstanding any other provision of this Guaranty, the amount guaranteed by each Guarantor hereunder shall be limited to the extent, if any, required so that its obligations hereunder shall not be subject to avoidance under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law. In determining the limitations, if any, on the amount of any Guarantor’s obligations hereunder pursuant to the preceding sentence, it is the intention of the parties hereto that any rights of subrogation, indemnification or contribution which such Guarantor may have under this Guaranty, any other agreement or applicable law shall be taken into account.

SECTION 10. Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Borrower under the Credit Agreement, any Swap Agreement, any Banking Services Agreement or any other Loan Document is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration

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under the terms of the Credit Agreement, any Swap Agreement, any Banking Services Agreement or any other Loan Document shall nonetheless be payable by each of the Guarantors hereunder forthwith on demand by the Administrative Agent.

SECTION 11. Notices. All notices, requests and other communications to any party hereunder shall be given in the manner prescribed in Article IX of the Credit Agreement with respect to the Administrative Agent at its notice address therein and with respect to any Guarantor, in care of the Borrower at the address of the Borrower set forth in the Credit Agreement or such other address or telecopy number as such party may hereafter specify for such purpose by notice to the Administrative Agent in accordance with the provisions of such Article IX.

SECTION 12. No Waivers. No failure or delay by the Administrative Agent or any other Holder of Guaranteed Obligations in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided in this Guaranty, the Credit Agreement, any Swap Agreement, any Banking Services Agreement and the other Loan Documents shall be cumulative and not exclusive of any rights or remedies provided by law.

SECTION 13. Successors and Assigns. This Guaranty is for the benefit of the Administrative Agent and the other Holders of Guaranteed Obligations and their respective successors and permitted assigns; provided, that no Guarantor shall have any right to assign its rights or obligations hereunder without the consent of all of the Lenders, and any such assignment in violation of this Section 13 shall be null and void; and in the event of an assignment of any amounts payable under the Credit Agreement, any Swap Agreement, any Banking Services Agreement or the other Loan Documents in accordance with the respective terms thereof, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. This Guaranty shall be binding upon each of the Guarantors and their respective successors and assigns.

SECTION 14. Changes in Writing. Other than in connection with the addition of additional Subsidiaries, which become parties hereto by executing a supplement hereto in the form attached as Annex I, neither this Guaranty nor any provision hereof may be changed, waived, discharged or terminated orally, except in writing signed by each of the Guarantors and the Administrative Agent with the consent of the Required Lenders under the Credit Agreement.

SECTION 15. GOVERNING LAW. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ BUT OTHERWISE WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PROVISION) OF THE STATE OF ILLINOIS.

SECTION 16. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL; IMMUNITY.

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(A) CONSENT TO JURISDICTION. EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY AND EACH GUARANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GUARANTOR AGAINST THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS GUARANTY OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

(B) WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER AND FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY IN SUCH ACTION.

(C) TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), EACH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.

SECTION 17. No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Guaranty. In the event an ambiguity or question of intent or interpretation arises, this Guaranty shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Guaranty.

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SECTION 18. Taxes, Expenses of Enforcement, etc.

(A) Taxes.

(i) All payments by any Guarantor to or for the account of any Lender, the Issuing Bank, the Administrative Agent or any other Holder of Guaranteed Obligations hereunder or under any promissory note or application for a Letter of Credit shall be made free and clear of and without deduction for any and all Indemnified Taxes or Other Taxes. If any Guarantor shall be required by law to deduct any Indemnified Taxes or Other Taxes from or in respect of any sum payable hereunder to any Lender, the Issuing Bank, the Administrative Agent or any other Holder of Guaranteed Obligations, (a) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 17(A)) such Lender, the Issuing Bank, the Administrative Agent or any other Holder of Guaranteed Obligations (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (b) such Guarantor shall make such deductions, (c) such Guarantor shall pay the full amount deducted to the relevant authority in accordance with applicable law and (d) such Guarantor shall furnish to the Administrative Agent the original copy of a receipt evidencing payment thereof within thirty (30) days after such payment is made.

(ii) In addition, the Guarantors hereby agree to pay any present or future stamp or documentary taxes and any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under any promissory note or application for a Letter of Credit or from the execution or delivery of, or otherwise with respect to, this Guaranty or any promissory note or application for a Letter of Credit (“Other Taxes”).

(iii) The Guarantors hereby agree to indemnify the Administrative Agent, the Issuing Bank, each Lender and any other Holder of Guaranteed Obligations for the full amount of Indemnified Taxes or Other Taxes (including, without limitation, any Indemnified Taxes or Other Taxes imposed on amounts payable under this Section 17(A)) paid by the Administrative Agent, the Issuing Bank, such Lender or such other Holder of Guaranteed Obligations and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Payments due under this indemnification shall be made within thirty (30) days of the date the Administrative Agent, the Issuing Bank, such Lender or such other Holder of Guaranteed Obligations makes demand therefor.

(iv) By accepting the benefits hereof, each Foreign Lender agrees that it will comply with Section 2.17(e) and Section 2.17(h) of the Credit Agreement.

(B) Expenses of Enforcement, Etc. Subject to the terms of the Credit Agreement, after the occurrence of an Event of Default under the Credit Agreement, the Lenders shall have the right at any time to direct the Administrative Agent to commence enforcement proceedings with respect to the Guaranteed Obligations. The Guarantors agree to

F-12

reimburse the Administrative Agent and the other Holders of Guaranteed Obligations for any reasonable costs and out-of-pocket expenses (including reasonable attorneys’ fees and time charges of attorneys for the Administrative Agent and the other Holders of Guaranteed Obligations, which attorneys may be employees of the Administrative Agent or the other Holders of Guaranteed Obligations) paid or incurred by the Administrative Agent or any other Holder of Guaranteed Obligations in connection with the collection and enforcement of amounts due under the Loan Documents, including without limitation this Guaranty. The Administrative Agent agrees to distribute payments received from any of the Guarantors hereunder to the other Holders of Guaranteed Obligations on a pro rata basis for application in accordance with the terms of the Credit Agreement.

SECTION 19. Setoff. At any time after all or any part of the Guaranteed Obligations have become due and payable (by acceleration or otherwise), each Holder of Guaranteed Obligations (including the Administrative Agent) and its Affiliates is hereby authorized at any time and from time to time, without notice to any Guarantor and regardless of the acceptance of any security or collateral for the payment hereof, to set off and apply any and all deposits (general or special, time or demand, provisional or final and in whatever currency denominated) at any time held and other obligations at any time owing by such Holder of Guaranteed Obligations or such Affiliate to or for the credit or the account of any Guarantor against any of and all the Guaranteed Obligations held by such Holder of Guaranteed Obligations or such Affiliate, irrespective of whether or not such Holder of Guaranteed Obligations or such Affiliate shall have made any demand under the Loan Documents and although such obligations may be unmatured. The rights of each Holder of Guaranteed Obligations under this Section are in addition to other rights and remedies (including other rights of setoff) which such Holder of Guaranteed Obligations may have.

SECTION 20. Financial Information. Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Borrower and any and all endorsers and/or other Guarantors of all or any part of the Guaranteed Obligations, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations, or any part thereof, that diligent inquiry would reveal, and each Guarantor hereby agrees that none of the Holders of Guaranteed Obligations (including the Administrative Agent) shall have any duty to advise such Guarantor of information known to any of them regarding such condition or any such circumstances. In the event any Holder of Guaranteed Obligations (including the Administrative Agent), in its sole discretion, undertakes at any time or from time to time to provide any such information to a Guarantor, such Holder of Guaranteed Obligations (including the Administrative Agent) shall be under no obligation (i) to undertake any investigation not a part of its regular business routine, (ii) to disclose any information which such Holder of Guaranteed Obligations (including the Administrative Agent), pursuant to accepted or reasonable commercial finance or banking practices, wishes to maintain confidential or (iii) to make any other or future disclosures of such information or any other information to such Guarantor.

SECTION 21. Severability. Wherever possible, each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Guaranty.

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SECTION 22. Merger. This Guaranty represents the final agreement of each of the Guarantors with respect to the matters contained herein and may not be contradicted by evidence of prior or contemporaneous agreements, or subsequent oral agreements, between the Guarantor and any Holder of Guaranteed Obligations (including the Administrative Agent).

SECTION 23. Headings. Section headings in this Guaranty are for convenience of reference only and shall not govern the interpretation of any provision of this Guaranty.

SECTION 24. Termination of Guaranty. The obligations of any Guarantor under this Guaranty shall automatically terminate in accordance with Section 9.16 of the Credit Agreement.

Remainder of Page Intentionally Blank.

F-14

IN WITNESS WHEREOF, each of the Initial Guarantors has caused this Guaranty to be duly executed by its authorized officer as of the day and year first above written.

[GUARANTORS]

By:

Name:

Title:

F-15

Acknowledged and Agreed

as of the date first written above:

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:

Name:

Title:

F-16

ANNEX I TO GUARANTY

Reference is hereby made to the Guaranty (the “Guaranty”) made as of October 10, 2012 by and among [GUARANTORS] (the “Initial Guarantors” and along with any additional Subsidiaries of the Borrower, which become parties thereto and together with the undersigned, the “Guarantors”) in favor of the Administrative Agent, for the ratable benefit of the Holders of Guaranteed Obligations, under the Credit Agreement. Capitalized terms used herein and not defined herein shall have the meanings given to them in the Guaranty. By its execution below, the undersigned [NAME OF NEW GUARANTOR], a [corporation] [partnership] [limited liability company], agrees to become, and does hereby become, a Guarantor under the Guaranty and agrees to be bound by such Guaranty as if originally a party thereto. By its execution below, the undersigned represents and warrants as to itself that all of the representations and warranties contained in Section 2 of the Guaranty are true and correct in all respects as of the date hereof.

IN WITNESS WHEREOF, [NAME OF NEW GUARANTOR], a [corporation] [partnership] [limited liability company] has executed and delivered this Annex I counterpart to the Guaranty as of this               day of             , 20            .

[NAME OF NEW GUARANTOR]

By:

Its:

F-17

EXHIBIT G

FORM OF COMPLIANCE CERTIFICATE

COMPLIANCE CERTIFICATE

To: The Lenders parties to the

Credit Agreement described below

This Compliance Certificate is furnished pursuant to that certain Credit Agreement dated as of October 10, 2012 (as amended, modified, renewed or extended from time to time, the “Agreement”) among Zebra Technologies Corporation (the “Borrower”), the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders and as the Issuing Bank. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES, SOLELY IN HIS/HER CAPACITY AS AN OFFICER OF THE BORROWER, THAT:

1. I am the duly elected             of the Borrower;

2. In my capacity as             of the Borrower, I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements [for quarterly financial statements add: and such financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes];

3. The examinations described in paragraph 2 did not disclose, except as set forth below, and I have no knowledge of (i) the existence of any condition or event which constitutes a Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate or (ii) any change in GAAP or in the application thereof that has occurred since the date of the audited financial statements referred to in Section 3.04 of the Agreement;

4. Schedule I attached hereto sets forth financial data and computations evidencing the Borrower’s compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct; and

5. Schedule II hereto sets forth the computations necessary to determine the Applicable Rate commencing on the Business Day this certificate is delivered.

G-1

Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the (i) nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event or (ii) the change in GAAP or the application thereof and the effect of such change on the attached financial statements:

The foregoing certifications, together with the computations set forth in Schedule I and Schedule II hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this          day of             ,             .

ZEBRA TECHNOLOGIES CORPORATION
By:
	Name:
	Title:

G-2

SCHEDULE I

SCHEDULE I TO COMPLIANCE CERTIFICATE

The computations set forth in this Schedule I are designed to facilitate the calculation of financial covenants in the Credit Agreement relating to the information set forth in the Borrower’s consolidated financial statements delivered with this Certificate. The computations set forth in this Schedule I have been made in accordance with GAAP. The use of abbreviated terminology and/or descriptions in the computations below are not in any way intended to override or eliminate the more detailed descriptions for such computations set forth in the relevant provisions of the Credit Agreement, all of which shall be deemed to control. In addition, the failure to identify any specific provisions or terms of the Credit Agreement in this Schedule I does not in any way affect their applicability during the periods covered by such financial statements or otherwise, which shall in all cases be governed by the Credit Agreement.

FINANCIAL COVENANTS

A. Consolidated EBITDA for the most recently ended 4 fiscal quarters
With reference to any period:
(i) Consolidated Net Income for such period	$
plus, without duplication and to the extent deducted in determining Consolidated Net Income for such period,
(ii) the provision for depreciation expense of the Borrower and its Subsidiaries for such period	+ $
(iii) the provision for amortization expense of the Borrower and its Subsidiaries for such period	+ $
(iv) income taxes of the Borrower and its Subsidiaries for such period	+ $
(v) net interest expense of the Borrower and its Subsidiaries for such period	+ $

G-3

(vi) any non-cash, non-operating losses (including, without limitation, extraordinary or unusual losses, losses arising from the sale of capital assets or the sale of owned buildings and properties, non-cash impairment charges related to intangible assets and other non-recurring losses) during such period	+ $
(vii) non-cash stock based compensation expenses for such period	+ $
minus, without duplication and to the extent included in determining Consolidated Net Income for such period,
(viii) any non-cash, non-operating gains (including, without limitation, extraordinary or unusual gains, gains arising from the sale of capital assets or the sale of owned buildings and properties and other non-recurring gains) during such period	– $
(ix) cash payments in respect of non-cash items previously added-back under clause (vii)	– $
(x) Consolidated EBITDA (aggregate of Item A.(i) through Item A.(ix)) NOTE: If a Material Disposition has occurred during the applicable Reference Period, the following amount should be subtracted from A.(x): $             Note: If a Material Acquisition has occurred during the applicable Reference Period, the following amount should be given effect to A.(x) on a proforma basis: $	= $
B. Maximum Leverage Ratio (Section 6.11(a))
(i) Consolidated Total Funded Indebtedness		$
(ii) Consolidated EBITDA (from A.(x) above, giving effect to Material Dispositions and Material Acquisitions as described above)		$

G-4

(iii) Leverage Ratio (ratio of B.(i) to B.(ii))	to 1.00
(iv) Maximum Leverage Ratio permitted under Section 6.11(a)	3.00 to 1.00
(v) In compliance?	Yes/No (select one)
C. Minimum Interest Coverage Ratio (Section 6.11(b))
(i) Consolidated EBITDA (from A.(x) above, giving effect to Material Dispositions and Material Acquisitions as described above)	$
(ii) Consolidated Cash Interest Expense	$
(iii) Interest Coverage Ratio (ratio of C.(i) to C.(ii))	to 1.00
(iv) Minimum Interest Coverage Ratio permitted under Section 6.11(b)	3.50 to 1.00
(v) In compliance?	Yes/No (select one)

G-5

SCHEDULE II

Borrower’s Applicable Rate Calculation

(Attached)

G-6

EXHIBIT H-1

[FORM OF]

BORROWING SUBSIDIARY AGREEMENT

BORROWING SUBSIDIARY AGREEMENT dated as of [            ], among Zebra Technologies Corporation, a Delaware corporation (the “Company”), [Name of Foreign Subsidiary Borrower], a [            ] (the “New Borrowing Subsidiary”), and JPMorgan Chase Bank, N.A. as Administrative Agent (the “Administrative Agent”).

Reference is hereby made to the Credit Agreement dated as of October 10, 2012 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Company, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A. as Administrative Agent. Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. Under the Credit Agreement, the Lenders have agreed, upon the terms and subject to the conditions therein set forth, to make Loans to certain Foreign Subsidiary Borrowers (collectively with the Company, the “Borrowers”), and the Company and the New Borrowing Subsidiary desire that the New Borrowing Subsidiary become a Foreign Subsidiary Borrower. In addition, the New Borrowing Subsidiary hereby authorizes the Company to act on its behalf as and to the extent provided for in Article II of the Credit Agreement. [Notwithstanding the preceding sentence, the New Borrowing Subsidiary hereby designates the following officers as being authorized to request Borrowings under the Credit Agreement on behalf of the New Subsidiary Borrower and sign this Borrowing Subsidiary Agreement and the other Loan Documents to which the New Borrowing Subsidiary is, or may from time to time become, a party: [            ].]

Each of the Company and the New Borrowing Subsidiary represents and warrants that the representations and warranties of the Company in the Credit Agreement relating to the New Borrowing Subsidiary and this Agreement are true and correct on and as of the date hereof, other than representations given as of a particular date, in which case they shall be true and correct as of that date. [The Company and the New Borrowing Subsidiary further represent and warrant that the execution, delivery and performance by the New Borrowing Subsidiary of the transactions contemplated under this Agreement and the use of any of the proceeds raised in connection with this Agreement will not contravene or conflict with, or otherwise constitute unlawful financial assistance under, Sections 677 to 683 (inclusive) of the United Kingdom Companies Act 2006 of England and Wales (as amended).]¹ [INSERT OTHER PROVISIONS REASONABLY REQUESTED BY ADMINISTRATIVE AGENT OR ITS COUNSELS] [The Company agrees that the Guarantee of the Company contained in the Credit Agreement will apply to the Obligations of the New Borrowing Subsidiary]. Upon execution of this Agreement by each of the Company, the New Borrowing Subsidiary and the Administrative Agent, the New Borrowing Subsidiary shall be a party to the Credit Agreement and shall constitute a “Foreign Subsidiary Borrower” for all purposes thereof, and the New Borrowing Subsidiary hereby agrees to be bound by all provisions of the Credit Agreement.

¹  To be included only if a New Borrowing Subsidiary will be a Borrower organized under the laws of England and Wales.

H-1-1

This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois.

[Signature Page Follows]

H-1-2

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their authorized officers as of the date first appearing above.

ZEBRA TECHNOLOGIES CORPORATION
By:
	Name:
	Title:

[NAME OF NEW BORROWING SUBSIDIARY]
By:
	Name:
	Title:

JPMORGAN CHASE BANK, N.A., as Administrative Agent
By:
	Name:
	Title:

H-1-3

EXHIBIT H-2

[FORM OF]

BORROWING SUBSIDIARY TERMINATION

JPMorgan Chase Bank, N.A.

as Administrative Agent

for the Lenders referred to below

10 South Dearborn Street, Floor 7

Chicago, Illinois 60603

Attention: Sharon Bosch

[Date]

Ladies and Gentlemen:

The undersigned, Zebra Technologies Corporation (the “Company”), refers to the Credit Agreement dated as of October 10, 2012 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Company, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

The Company hereby terminates the status of [            ] (the “Terminated Borrowing Subsidiary”) as a Foreign Subsidiary Borrower under the Credit Agreement. [The Company represents and warrants that no Loans made to the Terminated Borrowing Subsidiary are outstanding as of the date hereof and that all amounts payable by the Terminated Borrowing Subsidiary in respect of interest and/or fees (and, to the extent notified by the Administrative Agent or any Lender, any other amounts payable under the Credit Agreement) pursuant to the Credit Agreement have been paid in full on or prior to the date hereof.] [The Company acknowledges that the Terminated Borrowing Subsidiary shall continue to be a Foreign Subsidiary Borrower until such time as all Loans made to the Terminated Borrowing Subsidiary shall have been prepaid and all amounts payable by the Terminated Borrowing Subsidiary in respect of interest and/or fees (and, to the extent notified by the Administrative Agent or any Lender, any other amounts payable under the Credit Agreement) pursuant to the Credit Agreement shall have been paid in full, provided that the Terminated Borrowing Subsidiary shall not have the right to make further Borrowings under the Credit Agreement.]

[Signature Page Follows]

H-2-1

This instrument shall be construed in accordance with and governed by the laws of the State of Illinois.

Very truly yours,
ZEBRA TECHNOLOGIES CORPORATION
By:
	Name:
	Title:

H-2-2

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Anders Gustafsson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Zebra Technologies Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and the internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2012	By:	/s/Anders Gustafsson
		Anders Gustafsson
		Chief Executive Officer

40

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael C. Smiley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Zebra Technologies Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and the internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2012	By:	/s/ Michael C. Smiley
		Michael C. Smiley
		Chief Financial Officer

41

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Zebra Technologies Corporation (Zebra) on Form 10-Q for the period that ended September 29, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anders Gustafsson, Chief Executive Officer of Zebra, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of Zebra.

A signed original of this written statement required by Section 906, or another document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Zebra and will be retained by Zebra and furnished to the Securities and Exchange Commission or its staff upon request.

Date: November 7, 2012	By:	/s/Anders Gustafsson
		Anders Gustafsson
		Chief Executive Officer

42

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Zebra Technologies Corporation (Zebra) on Form 10-Q for the period that ended September 29, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael C. Smiley, Chief Financial Officer of Zebra, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of Zebra.

A signed original of this written statement required by Section 906, or another document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Zebra and will be retained by Zebra and furnished to the Securities and Exchange Commission or its staff upon request.

Date: November 7, 2012	By:	/s/ Michael C. Smiley
		Michael C. Smiley
		Chief Financial Officer

43

XML

Fair Value Measurements (Financial Assets And Liabilities Carried At Fair Value) (Detail) (USD $)	Sep. 29, 2012		Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	$ 316,542		$ 290,277
Total assets at fair value	319,966		302,686
Total liabilities at fair value	4,500		3,199
US Government Corporations And Agencies Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	93,376		50,847
Obligations Of Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	5,048	[1]	16,612	[1]
State And Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	101,024		142,873
Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	117,058		79,909
Other Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	36		36
Money Market Investments Related To The Deferred Compensation Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	3,424		3,199
Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value			9,210	[2]
Total liabilities at fair value	1,076	[2]
Liabilities Related To The Deferred Compensation Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities at fair value	3,424		3,199
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	80,885		25,540
Total assets at fair value	84,309		31,365
Total liabilities at fair value	5,267		3,199
Fair Value, Inputs, Level 1 [Member] | US Government Corporations And Agencies Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	80,885		25,540
Fair Value, Inputs, Level 1 [Member] | Obligations Of Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	0	[1]	0	[1]
Fair Value, Inputs, Level 1 [Member] | State And Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	0		0
Fair Value, Inputs, Level 1 [Member] | Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	0		0
Fair Value, Inputs, Level 1 [Member] | Other Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	0		0
Fair Value, Inputs, Level 1 [Member] | Money Market Investments Related To The Deferred Compensation Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	3,424		3,199
Fair Value, Inputs, Level 1 [Member] | Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value			2,626	[2]
Total liabilities at fair value	1,843	[2]
Fair Value, Inputs, Level 1 [Member] | Liabilities Related To The Deferred Compensation Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities at fair value	3,424		3,199
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	233,069		262,149
Total assets at fair value	233,069		268,733
Total liabilities at fair value	(767)		0
Fair Value, Inputs, Level 2 [Member] | US Government Corporations And Agencies Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	12,491		25,307
Fair Value, Inputs, Level 2 [Member] | Obligations Of Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	5,048	[1]	16,612	[1]
Fair Value, Inputs, Level 2 [Member] | State And Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	101,024		142,873
Fair Value, Inputs, Level 2 [Member] | Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	114,470		77,321
Fair Value, Inputs, Level 2 [Member] | Other Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	36		36
Fair Value, Inputs, Level 2 [Member] | Money Market Investments Related To The Deferred Compensation Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	0		0
Fair Value, Inputs, Level 2 [Member] | Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value			6,584	[2]
Total liabilities at fair value	(767)	[2]
Fair Value, Inputs, Level 2 [Member] | Liabilities Related To The Deferred Compensation Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities at fair value	0		0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	2,588		2,588
Total assets at fair value	2,588		2,588
Total liabilities at fair value	0		0
Fair Value, Inputs, Level 3 [Member] | US Government Corporations And Agencies Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	0		0
Fair Value, Inputs, Level 3 [Member] | Obligations Of Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	0	[1]	0	[1]
Fair Value, Inputs, Level 3 [Member] | State And Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	0		0
Fair Value, Inputs, Level 3 [Member] | Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	2,588		2,588
Fair Value, Inputs, Level 3 [Member] | Other Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments subtotal	0		0
Fair Value, Inputs, Level 3 [Member] | Money Market Investments Related To The Deferred Compensation Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value	0		0
Fair Value, Inputs, Level 3 [Member] | Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets at fair value			0	[2]
Total liabilities at fair value	0	[2]
Fair Value, Inputs, Level 3 [Member] | Liabilities Related To The Deferred Compensation Plan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities at fair value	$ 0		$ 0

[1] (1) Includes investments in notes issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Farm Credit Banks, and the Federal Home Loan Bank.

[2] The fair value of contracts are calculated as follows: a. Fair value of a collar or put option contract associated with forecasted sales hedges are calculated using bid and ask rates for similar contracts. b. Fair value of regular forward contracts associated with forecasted sales hedges are calculated using the period-end exchange rate adjusted for current forward points. c. Fair value of balance sheet hedges are calculated at the period end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at period end. If this is the case, the fair value is calculated at the rate at which the hedge is being settled.

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Derivative Instruments (Forward Contracts Amounts Recorded In Consolidated Balance Sheet) (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2012	Dec. 31, 2011
Derivatives, Fair Value [Line Items]
Total Assets	$ 0	$ 9,210
Total Liabilities	1,076	0
Prepaid Expenses And Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Total Assets	0	9,210
Accrued Liabilities [Member]
Derivatives, Fair Value [Line Items]
Total Liabilities	$ 1,076	$ 0

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Goodwill And Other Intangible Assets (Carrying Value Amount of Goodwill) (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 29, 2012	Dec. 31, 2011
Goodwill [Line Items]
Goodwill at gross		$ 180,731
Impairment charge - 2008	(9,114)	(101,028)
Goodwill beginning balance	79,703
Goodwill ending balance	95,345
Acquisitions - LaserBand	$ 24,756

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Income Taxes (Narrative) (Detail)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012	Oct. 01, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Open tax years by major tax jurisdiction					2010	2009	2008
Increase in efective tax rate	6.00%		2.00%
Current Statutory tax rate			24.50%
Effective tax rate	31.00%	28.80%	27.50%	29.70%
Previous [Member]
Current Statutory tax rate			25.50%

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Warranty (Summary Of Accrued Warranty Obligation) (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011
Balance at the beginning of the year	$ 4,613	$ 4,554
Warranty expense	4,667	4,051
Warranty payments	(5,222)	(4,115)
Balance at the end of the period	$ 4,058	$ 4,490

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Business Combinations (Summary Of Estimated Fair Value Of Assets And Liabilities) (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2012	Jul. 13, 2012
Business Acquisition [Line Items]
Current assets		$ 6,614
Property and equipment		46
Other assets		17
Goodwill	24,756	24,756
Other intangibles	29,560	29,560
Total assets acquired		60,993
Current liabilities		1,119
Net assets acquired		$ 59,874

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Goodwill And Other Intangible Assets (Intangible Assets) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012	Oct. 01, 2011	Dec. 31, 2011
Finite-Lived Intangible Assets [Line Items]
Gross Amount	$ 67,443		$ 67,443		$ 37,883
Accumulated Amortization	(28,426)		(28,426)		(25,216)
Net Amount	39,017		39,017		12,667
Amortization expense	1,670	843	3,210	2,514
Current Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Amount	18,978		18,978		12,718
Accumulated Amortization	(11,975)		(11,975)		(11,403)
Net Amount	7,003		7,003		1,315
Patent And Patent Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Amount	27,972		27,972		23,392
Accumulated Amortization	(14,175)		(14,175)		(12,079)
Net Amount	13,797		13,797		11,313
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Amount	20,493		20,493		1,773
Accumulated Amortization	(2,276)		(2,276)		(1,734)
Net Amount	$ 18,217		$ 18,217		$ 39

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Earnings Per Share (Tables)

9 Months Ended

Sep. 29, 2012

Computation Of Earnings Per Share

Earnings per share were computed as follows (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Weighted average shares:
Weighted average common shares outstanding		51,566		53,339		51,775		54,405
Effect of dilutive securities outstanding		243		289		266		365
Diluted weighted average shares outstanding		51,809		53,628		52,041		54,770
Earnings:
Income from continuing operations	$	26,581	$	34,187	$	87,098	$	97,484
Income from discontinued operations		516		10,814		816		42,115
Net income	$	27,097	$	45,001	$	87,914	$	139,599
Basic per share amounts:
Income from continuing operations	$	0.52	$	0.64	$	1.68	$	1.79
Income from discontinued operations		0.01		0.20		0.02		0.77
Net income	$	0.53	$	0.84	$	1.70	$	2.56
Diluted per share amounts:
Income from continuing operations	$	0.51	$	0.64	$	1.67	$	1.78
Income from discontinued operations		0.01		0.20		0.02		0.77
Net income	$	0.52	$	0.84	$	1.69	$	2.55

Potentially Dilutive Securities Excluded From Earnings Per Share Calculation

	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Potentially dilutive shares		2,150,000		1,851,000		1,809,000		1,446,000

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Business Combinations (Allocation Of Purchase Price To Identifiable Tangible And Acquisition Of Intangible Assets And Liabilities) (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 29, 2012
Business Acquisition [Line Items]
Intangible Assets ,Amount	$ 29,560
Current Technology [Member]
Business Acquisition [Line Items]
Intangible Assets ,Amount	6,260
Intangible Assets Useful life	5 years
Patent And Patent Rights [Member]
Business Acquisition [Line Items]
Intangible Assets ,Amount	4,580
Intangible Assets Useful life	7 years
Customer Relationships [Member]
Business Acquisition [Line Items]
Intangible Assets ,Amount	$ 18,720
Customer Relationships [Member] | Minimum [Member]
Business Acquisition [Line Items]
Intangible Assets Useful life	5 years
Customer Relationships [Member] | Maximum [Member]
Business Acquisition [Line Items]
Intangible Assets Useful life	9 years

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Other Comprehensive Income (Components Of Accumulated Other Comprehensive Income (Loss)) (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2012	Dec. 31, 2011
Unrealized gains and (losses) on hedging transactions, Gross	$ (1,244)	$ 7,355
Unrealized gains and (losses) on hedging transactions, Income tax (benefit) expense	(311)	2,096
Unrealized gains and (losses) on hedging transactions, Net	(933)	5,259
Unrealized gains and (losses) on investments classified as available-for-sale, Gross	558	(797)
Unrealized gains and (losses) on investments classified as available-for-sale, Income tax (benefit) expense	150	(288)
Unrealized gains and (losses) on investments classified as available-for-sale, Net	408	(509)
Foreign currency translation adjustments	(8,765)	(8,963)
Total accumulated other comprehensive loss	$ (9,290)	$ (4,213)

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Stockholders' Equity (Share Count And Par Value Data Related To Stockholders' Equity) (Detail) (USD $)	Sep. 29, 2012	Dec. 31, 2011	Oct. 01, 2011	Dec. 31, 2010
Stockholders Equity [Line Items]
Preferred Stock, Par value per share	$ 0.01	$ 0.01
Preferred Stock, Shares authorized	10,000,000	10,000,000
Preferred Stock, Shares outstanding	0	0
Common Stock-Class A, Par value per share	$ 0.01	$ 0.01
Common Stock-Class A, Shares authorized	150,000,000	150,000,000
Common Stock-Class A, Shares issued	72,151,857	72,151,857
Common Stock-Class A, Shares outstanding	51,252,384	52,095,166	52,388,510	55,711,325
Treasury stock, Shares held	20,899,473	20,056,691

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Discontinued Operations (Components Of Cash Flows Of Discontinued Operations) (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011
Net cash used by operating activities	$ 0	$ (1,301)
Net cash provided by (used in) investing activities	0	0
Net cash provided by (used in) financing activities	0	0
Effect of exchange rate changes on cash	0	0
Net decrease in cash and cash equivalents	0	(1,301)
Cash balance of discontinued operations at beginning of period	0	1,301
Less: Cash balance of discontinued operations at end of period	$ 0	$ 0

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Business Combinations - Narrative (Detail) (USD $)	Sep. 29, 2012	Jul. 13, 2012
Business Acquisition [Line Items]
Business acquisition ,net of cash		$ 59,874,000
Escrow balance established against the total purchase price		8,700,000
Business acquisition goodwill amount	24,756,000	24,756,000
Business acquisition intangible assets	$ 29,560,000	$ 29,560,000

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Income Taxes (Summary Of Effective Tax Rate) (Detail)	3 Months Ended		9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012	Oct. 01, 2011
Income Taxes [Line Items]
Effective tax rate	31.00%	28.80%	27.50%	29.70%

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 29, 2012

Financial Assets And Liabilities Carried At Fair Value

	Level 1		Level 2			Level 3		Total
Assets:
U.S. government and agency securities	$	80,885	$	12,491		$	0	$	93,376
Obligations of government-sponsored enterprises (1)		0		5,048			0		5,048
State and municipal bonds		0		101,024			0		101,024
Corporate securities		0		114,470			2,588		117,058
Other investments		0		36			0		36
Investments subtotal		80,885		233,069			2,588		316,542
Money market investments related to the deferred compensation plan		3,424		0			0		3,424
Total assets at fair value	$	84,309	$	233,069		$	2,588	$	319,966
Liabilities:
Forward contracts (2)	$	1,843	$	(767	)	$	0	$	1,076
Liabilities related to the deferred compensation plan		3,424		0			0		3,424
Total liabilities at fair value	$	5,267	$	(767	)	$	0	$	4,500

Financial assets and liabilities carried at fair value as of December 31, 2011, are classified below (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
U.S. government and agency securities	$	25,540	$	25,307	$	0	$	50,847
Obligations of government-sponsored enterprises (1)		0		16,612		0		16,612
State and municipal bonds		0		142,873		0		142,873
Corporate securities		0		77,321		2,588		79,909
Other investments		0		36		0		36
Investments subtotal		25,540		262,149		2,588		290,277
Forward contracts (2)		2,626		6,584		0		9,210
Money market investments related to the deferred compensation plan		3,199		0		0		3,199
Total assets at fair value	$	31,365	$	268,733	$	2,588	$	302,686
Liabilities:
Liabilities related to the deferred compensation plan	$	3,199	$	0	$	0	$	3,199
Total liabilities at fair value	$	3,199	$	0	$	0	$	3,199

(1) Includes investments in notes issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Farm Credit Banks, and the Federal Home Loan Bank.

(2) The fair value of contracts are calculated as follows:

a. Fair value of a collar or put option contract associated with forecasted sales hedges are calculated using bid and ask rates for similar contracts.

b. Fair value of regular forward contracts associated with forecasted sales hedges are calculated using the period-end exchange rate adjusted for current forward points.

c. Fair value of balance sheet hedges are calculated at the period end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at period end. If this is the case, the fair value is calculated at the rate at which the hedge is being settled.

Assets Measured Fair Value On Recurring Basis

	Nine Months Ended
	September 29, 2012		October 1, 2011
Balance at beginning of the year	$	2,588	$	5,597
Transfers to Level 3		0		0
Total losses (realized or unrealized):
Included in earnings		0		(362	)
Included in other comprehensive income (loss)		0		317
Purchases and settlements (net)		0		(2,964	)
Balance at end of period	$	2,588	$	2,588
Total gains and (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets still held at end of period	$	0	$	0

Summary Of Short-Term And Long-Term Investments

The following is a summary of current and long-term investments (in thousands):

	As of September 29, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	93,286	$	90	$	0		$	93,376
Obligations of government-sponsored enterprises		5,037		11		0			5,048
State and municipal bonds		100,836		202		(14	)		101,024
Corporate securities		116,791		802		(535	)		117,058
Other investments		36		0		0			36
Total investments	$	315,986	$	1,105	$	(549	)	$	316,542

	As of December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	50,738	$	115	$	(6	)	$	50,847
Obligations of government-sponsored enterprises		16,581		32		(1	)		16,612
State and municipal bonds		142,586		330		(43	)		142,873
Corporate securities		81,132		164		(1,387	)		79,909
Other investments		36		0		0			36
Total investments	$	291,073	$	641	$	(1,437	)	$	290,277

Maturity Dates Of Investments

The maturity dates of investments are as follows (in thousands):

	As of September 29, 2012
	Amortized Cost		Estimated Fair Value
Less than 1 year	$	160,523	$	160,690
1 to 5 years		150,818		151,579
6 to 10 years		4,645		4,273
Thereafter		0		0
Total	$	315,986	$	316,542

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Cost Associated With Exit And Restructuring Activities (Liabilities And Expenses Related To Exit And Restructuring Activities) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012	Oct. 01, 2011
Restructuring Cost and Reserve [Line Items]
Balance at beginning of period			$ 1,048	$ 1,301
Charged to earnings	0	138	0	2,090
Cash paid			(872)	(2,086)
Balance at the end of period	$ 176	$ 1,305	$ 176	$ 1,305

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Fair Value Measurements (Maturity Dates Of Investments) (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2012	Dec. 31, 2011
Fair Value Measurements, Maturity Dates Of Investments [Line Items]
As of September Amortized Cost	$ 315,986	$ 291,073
29, 2012 Estimated Fair Value	316,542	290,277
Less Than 1 Year [Member]
Fair Value Measurements, Maturity Dates Of Investments [Line Items]
As of September Amortized Cost	160,523
29, 2012 Estimated Fair Value	160,690
1 To 5 Years [Member]
Fair Value Measurements, Maturity Dates Of Investments [Line Items]
As of September Amortized Cost	150,818
29, 2012 Estimated Fair Value	151,579
6 To 10 Years [Member]
Fair Value Measurements, Maturity Dates Of Investments [Line Items]
As of September Amortized Cost	4,645
29, 2012 Estimated Fair Value	4,273
Thereafter [Member]
Fair Value Measurements, Maturity Dates Of Investments [Line Items]
As of September Amortized Cost	0
29, 2012 Estimated Fair Value	$ 0

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Discontinued Operations (Summary Results For Discontinued Operations In Unaudited Consolidated Statement Of Earnings) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012	Oct. 01, 2011
Net sales	$ 0	$ 233	$ 0	$ 13,945
Income (loss) from discontinued operations	15	(1,246)	(135)	(13,970)
Income tax (expense) benefit	501	0	338	1,105
Gain (loss) on sale of discontinued operations	0	(1,248)	613	66,753
Income tax (expense) benefit on sale	0	13,308	0	(11,773)
Income from discontinued operations	$ 516	$ 10,814	$ 816	$ 42,115

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Discontinued Operations (Tables)

9 Months Ended

Sep. 29, 2012

Summary Results For Discontinued Operations In Unaudited Consolidated Statement Of Earnings

Summary results for discontinued operations in our unaudited consolidated statement of earnings are as follows (in thousands):

	Three Months Ended					Nine Months Ended
	September 29, 2012		October 1, 2011			September 29, 2012			October 1, 2011
Net sales	$	0	$	233		$	0		$	13,945
Income (loss) from discontinued operations	$	15	$	(1,246	)	$	(135	)	$	(13,970	)
Income tax (expense) benefit		501		0			338			1,105
Gain (loss) on sale of discontinued operations		0		(1,248	)		613			66,753
Income tax (expense) benefit on sale		0		13,308			0			(11,773	)
Income from discontinued operations	$	516	$	10,814		$	816		$	42,115

Components Of Cash Flows Of Discontinued Operations

The components of cash flows of discontinued operations in our unaudited consolidated statement of cash flows are as follows (in thousands):

	Nine Months Ended
	September 29, 2012		October 1, 2011
Cash flows from discontinued operations:
Net cash used by operating activities	$	0	$	(1,301	)
Net cash provided by (used in) investing activities		0		0
Net cash provided by (used in) financing activities		0		0
Effect of exchange rate changes on cash		0		0
Net decrease in cash and cash equivalents		0		(1,301	)
Cash and cash equivalents at beginning of period		0		1,301
Cash and cash equivalents at end of period	$	0	$	0

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Derivative Instruments (Financial Information Related To Cash Flow Hedges) (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2012	Dec. 31, 2011	Sep. 29, 2012 Cash Flow Hedging [Member]	Oct. 01, 2011 Cash Flow Hedging [Member]
Derivative [Line Items]
Unrealized losses on hedging transactions, Gross	$ (1,244)	$ 7,355	$ (8,599)	$ 4,164
Unrealized losses on hedging transactions, Income tax expense (benefit)	311	(2,096)	(2,407)	1,326
Unrealized losses on hedging transactions, Net	$ (933)	$ 5,259	$ (6,192)	$ 2,838

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Equity-Based Compensation (Summary Of Restricted Stock Award Activity) (Detail) (Restricted Stock Awards And Performance Share Awards [Member], USD $)	9 Months Ended
	Sep. 29, 2012
Restricted Stock Awards And Performance Share Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-Average Grant Date Fair Value, Outstanding at beginning of year	$ 28.34
Weighted-Average Grant Date Fair Value, Granted	$ 38.53
Weighted-Average Grant Date Fair Value, Released	$ 20.93
Weighted-Average Grant Date Fair Value, Forfeited	$ 23.26
Weighted-Average Grant Date Fair Value, Outstanding at end of period	$ 34.72
Shares, Outstanding at beginning of year	836,141
Shares, Granted	235,889
Shares, Released	(226,978)
Shares, Forfeited	(113,640)
Shares, Outstanding at end of period	731,412

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Earnings Per Share (Potentially Dilutive Securities Excluded From Earnings Per Share Calculation) (Detail)	3 Months Ended		9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012	Oct. 01, 2011
Potentially dilutive shares	2,150,000	1,851,000	1,809,000	1,446,000

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Goodwill And Other Intangible Assets (Additional Information) (Detail) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended		9 Months Ended		9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012 Segment	Oct. 01, 2011	Dec. 31, 2011	Jul. 13, 2012	Sep. 30, 2012 Minimum [Member]	May 31, 2012 Minimum [Member]	Sep. 29, 2012 Maximum [Member]	May 31, 2012 Maximum [Member]
Goodwill And Intangible Assets [Line Items]
Acquired intangible assets						$ 29,560,000
Estimated useful life of Intangible Assets							5 years		9 years
Intangible asset commitments accrued			3,000,000	200,000	3,000,000
Fair value exceeding the carrying value								8.00%		31.00%
Number of reporting units			2
Goodwill impairment charge	$ 9,114,000	$ 0	$ 9,114,000	$ 0

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Accounts Receivable

9 Months Ended

Sep. 29, 2012

Accounts Receivable

Note 4 – Accounts Receivable

The components of accounts receivable are as follows (in thousands):

	As of
	September 29, 2012			December 31, 2011
Accounts receivable, gross	$	166,242		$	156,790
Accounts receivable reserves		(1,082	)		(1,560	)
Accounts receivable, net	$	165,160		$	155,230

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Equity-Based Compensation - Narrative (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	5 years
Tax benefits classified as financing cash flows	$ 1,492	$ 1,265
Expected maximum life of employee stock purchase plan (in years)	5 years 5 months 23 days	5 years 5 months 1 day
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	5 years
Expiration period (in years)	10 years
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected maximum life of employee stock purchase plan (in years)	3 months
Minimum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected maximum life of employee stock purchase plan (in years)	1 year
Maximum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	5 years

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Investments And Marketable Securities (Narrative) (Detail) (USD $)	6 Months Ended	9 Months Ended
	Jun. 30, 2012	Sep. 29, 2012	Oct. 01, 2011	Dec. 31, 2011
Percentage of ownership interest	2.70%
Purchase of long-term equity investment	$ 5,000,000	$ 5,000,000	$ 0
Foreign cash and investments		$ 153,693,000		$ 96,829,000

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Costs Associated with Exit and Restructuring Activities (Tables)

9 Months Ended

Sep. 29, 2012

Summary Of Exit And Restructuring Costs Incurred

The following is a summary of 2011 exit and restructuring costs incurred (in thousands):

	Three Months Ended		Nine Months Ended
Type of Cost:	October 1, 2011		October 1, 2011
Severance, stay bonuses, and other employee-related expenses	$	100	$	1,171
Professional services		38		885
Relocation and transition costs		0		34
Other exit costs		0		0
Total	$	138	$	2,090

Zes [Member]

Liabilities And Expenses Related To Exit And Restructuring Activities

Liabilities and expenses related to exit and restructuring activities were as follows (in thousands):

	Nine Months Ended
	September 29, 2012			October 1, 2011
Balance at beginning of period	$	1,048		$	1,301
Charged to earnings		0			2,090
Cash paid		(872	)		(2,086	)
Balance at the end of period	$	176		$	1,305

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 29, 2012

Amortized Intangible Assets

Intangible assets are as follows (in thousands):

	As of September 29, 2012
	Gross Amount		Accumulated Amortization			Net Amount
Current technology	$	18,978	$	(11,975	)	$	7,003
Patent and patent rights		27,972		(14,175	)		13,797
Customer relationships		20,493		(2,276	)		18,217
Other intangibles, net	$	67,443	$	(28,426	)	$	39,017
Amortization expense for the nine months ended September 29, 2012			$	3,210

	As of December 31, 2011
	Gross Amount		Accumulated Amortization			Net Amount
Current technology	$	12,718	$	(11,403	)	$	1,315
Patent and patent rights		23,392		(12,079	)		11,313
Customer relationships		1,773		(1,734	)		39
Other intangibles, net	$	37,883	$	(25,216	)	$	12,667
Amortization expense for the nine months ended October 1, 2011			$	2,514

Carrying Value Amount of Goodwill

Changes in the net carrying value amount of goodwill were as follows (in thousands):

Unamortized intangible assets:	Total
Goodwill at gross	$	180,731
Impairment charge – 2008		(101,028	)
Goodwill as of December 31, 2011		79,703
Acquisitions – LaserBand		24,756
Impairment charge – 2012		(9,114	)
Goodwill as of September 29, 2012	$	95,345

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Contingencies - Narrative (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended		9 Months Ended
	Oct. 10, 2012 Y	Sep. 29, 2012	Sep. 29, 2012 Prime and Federal Fund Rate [Member]	Sep. 29, 2012 London Interbank Offered Rate (LIBOR) [Member]
Loss Contingencies [Line Items]
Revolving credit agreement in years	5
Revolving credit agreement in years	$ 250
Spread on Federal funds effective rate			0.50%
Ratio of total debt to EBITDA			Ranges from 0.25% to 1.75%	Ranges from 1.00% to 1.75%
Spread in effect at closing for LIBOR-based loans			0.00%	1.00%
credit agreement		$ 100

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Accounts Receivable (Components Of Accounts Receivable) (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, gross	$ 166,242	$ 156,790
Accounts receivable reserves	(1,082)	(1,560)
Accounts receivable, net	$ 165,160	$ 155,230

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Derivative Instruments (Tables)

9 Months Ended

Sep. 29, 2012

Financial Information Related To Hedging Of Net Assets Included In Consolidated Statement Of Earnings

Summary financial information related to these activities included in our consolidated statement of earnings as other income (expense) is as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Change in gains (losses) from foreign exchange derivatives	$	(1,649	)	$	3,108		$	(208	)	$	(3,155	)
Gains (losses) on net foreign currency assets		1,135			(3,281	)		(728	)		1,855
Foreign exchange loss	$	(514	)	$	(173	)	$	(936	)	$	(1,300	)

	As of
	September 29, 2012			December 31, 2011
Notional balance of outstanding contracts:
Pound/US dollar	£	3,412		£	6,016
Euro/US dollar	€	36,640		€	36,684
Net fair value of outstanding contracts	$	(17	)	$	(54	)

Financial Information Related To Cash Flow Hedges

Summary financial information related to the cash flow hedges is as follows (in thousands):

	As of
	September 29, 2012			October 1, 2011
Unrealized gains and (losses) on hedging transactions:
Gross	$	(8,599	)	$	4,164
Income tax expense (benefit)		(2,407	)		1,326
Net	$	(6,192	)	$	2,838

Financial Information Related To Cash Flow Hedges Of Future Revenues

Summary financial information related to the cash flow hedges of future revenues follows (in thousands, except percentages):

	As of
	September 29, 2012			December 31, 2011
Notional balance of outstanding contracts versus the dollar	€	91,560		€	92,305
Hedge effectiveness		100	%		100	%

	Three Months Ended					Nine Months Ended
	September 29, 2012		October 1, 2011			September 29, 2012		October 1, 2011
Net gains and (losses) included in revenue	$	1,967	$	(1,487	)	$	4,616	$	(4,272	)

Forward Contract Amounts Recorded In Consolidated Balance Sheet

statements. The amounts recorded on our consolidated balance sheet are as follows (in thousands):

	As of
	September 29, 2012		December 31, 2011
Assets:
Prepaid expenses and other current assets	$	0	$	9,210
Total	$	0	$	9,210
Liabilities:
Accrued liabilities	$	1,076	$	0
Total	$	1,076	$	0

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Warranty (Tables)

9 Months Ended

Sep. 29, 2012

Summary Of Accrued Warranty Obligation

	Nine Months Ended
	September 29, 2012			October 1, 2011
Balance at the beginning of the year	$	4,613		$	4,554
Warranty expense		4,667			4,051
Warranty payments		(5,222	)		(4,115	)
Balance at the end of the period	$	4,058		$	4,490

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Investments and Marketable Securities

9 Months Ended

Sep. 29, 2012

Investments and Marketable Securities

Note 3 – Investments and Marketable Securities

We classify our investments in marketable debt securities as available-for-sale. As of September 29, 2012, all of our investments in marketable debt securities with maturities greater than one year are classified as long-term investments on the balance sheet due to our ability and intent to hold them until maturity.

Changes in the market value of available-for-sale securities are reflected in the accumulated other comprehensive income caption of stockholders’ equity in the balance sheet, until we dispose of the securities. Once these securities are disposed of, either by sale or maturity, the accumulated changes in market value are transferred to investment income. On the statement of cash flows, changes in the balances of available-for-sale securities are shown as purchases, sales and maturities of investments and marketable securities under investing activities.

Changes in market value of trading securities would be recorded in investment income as they occur, and the related statement of cash flows would include changes in the balances of trading securities as operating cash flows. See Note 15 Other Comprehensive Income.

In the second quarter of 2012 Zebra acquired a 2.7% interest in a venture capital technology company for $5,000,000. This investment is classified as a long term asset.

Included in Zebra’s cash and investments and marketable securities are amounts held by foreign subsidiaries which are generally invested in U.S. dollar-denominated holdings. Zebra had foreign cash and investments of $153,693,000 as of September 29, 2012, and $96,829,000 as of December 31, 2011. Amounts held by foreign subsidiaries are generally subject to U.S. income taxation upon repatriation, however, Zebra does not intend to repatriate these funds.

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 29, 2012

Share Count And Par Value Data Related To Stockholders' Equity

Share count and par value data related to stockholders’ equity are as follows:

	As of
	September 29, 2012		December 31, 2011
Preferred Stock
Par value per share	$	0.01	$	0.01
Shares authorized		10,000,000		10,000,000
Shares outstanding		0		0
Common Stock - Class A
Par value per share	$	0.01	$	0.01
Shares authorized		150,000,000		150,000,000
Shares issued		72,151,857		72,151,857
Shares outstanding		51,252,384		52,095,166
Treasury stock
Shares held		20,899,473		20,056,691

Roll Forward Of Class A Common Shares Outstanding

	Nine Months Ended
	September 29, 2012			October 1, 2011
Balance at the beginning of the year		52,095,166			55,711,325
Repurchases		(1,073,863	)		(3,924,910	)
Stock option and ESPP issuances		176,274			453,728
Restricted share issuances		236,576			214,324
Restricted share forfeitures		(113,640	)		(14,013	)
Shares withheld for tax obligations		(68,129	)		(51,944	)
Balance at the end of the period		51,252,384			52,388,510

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Fair Value Measurements (Assets Measured Fair Value On Recurring Basis) (Detail) (USD $)	9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at beginning of the year	$ 2,588	$ 5,597
Transfers to Level 3	0	0
Included in earnings	0	(362)
Included in other comprehensive income (loss)	0	317
Purchases and settlements (net)	0	(2,964)
Balance at end of period	2,588	2,588
Total gains and (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets still held at end of period	$ 0	$ 0

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Derivative Instruments (Financial Information Related To Cash Flow Hedges Of Future Revenues) (Detail) (Cash Flow Hedging [Member]) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2012 USD ($)	Oct. 01, 2011 USD ($)	Sep. 29, 2012 USD ($)	Oct. 01, 2011 USD ($)	Sep. 29, 2012 EUR (€)	Dec. 31, 2011 EUR (€)
Derivative [Line Items]
Notional balance of outstanding contracts versus the dollar					€ 91,560	€ 92,305
Hedge effectiveness					100.00%	100.00%
Net gains and (losses) included in revenue	$ 1,967	$ (1,487)	$ 4,616	$ (4,272)

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Other Comprehensive Income (Components Of Other Comprehensive Income Gross And Net Of Income Tax) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012	Oct. 01, 2011
Unrealized gains (losses) on hedging transactions, Gross	$ (5,458)	$ 8,617	$ (8,599)	$ 4,164
Unrealized gains (losses) on hedging transactions, Income tax (benefit) expense	(1,512)	3,002	(2,407)	1,326
Unrealized gains (losses) on hedging transactions, Net	(3,946)	5,615	(6,192)	2,838
Unrealized gains (losses) on investments, Gross	556	(989)	1,355	(455)
Unrealized gains (losses) on investments, Income tax (benefit) expense	164	(353)	438	(152)
Unrealized gains (losses) on investments, Net	$ 392	$ (636)	$ 917	$ (303)

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 29, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 52,253	$ 36,418
Investments and marketable securities	160,690	182,398
Accounts receivable, net	165,160	155,230
Receivable from buyer	0	27,580
Inventories, net	122,915	133,288
Deferred income taxes	15,506	13,931
Income tax receivable	0	13,111
Prepaid expenses and other current assets	14,454	22,917
Total current assets	530,978	584,873
Property and equipment at cost, less accumulated depreciation and amortization	102,537	97,822
Long-term deferred income taxes	7,536	11,866
Goodwill	95,345	79,703
Other intangibles, net	39,017	12,667
Long-term investments and marketable securities	155,852	107,879
Other assets	9,425	4,196
Total assets	940,690	899,006
Current liabilities:
Accounts payable	28,180	33,273
Accrued liabilities	50,568	64,612
Deferred revenue	12,288	11,089
Income taxes payable	2,031	0
Total current liabilities	93,067	108,974
Deferred rent	1,406	1,592
Other long-term liabilities	13,188	11,515
Total liabilities	107,661	122,081
Stockholders' equity:
Preferred Stock	0	0
Class A Common Stock	722	722
Additional paid-in capital	136,750	131,422
Treasury stock	(628,683)	(596,622)
Retained earnings	1,333,530	1,245,616
Accumulated other comprehensive loss	(9,290)	(4,213)
Total stockholders' equity	833,029	776,925
Total liabilities and stockholders' equity	$ 940,690	$ 899,006

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Inventories (Components Of Inventories) (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2012	Dec. 31, 2011
Inventories [Line Items]
Raw material	$ 38,397	$ 45,795
Work in process	597	872
Deferred costs of long-term contracts	547	220
Finished goods	98,196	101,111
Inventories, gross	137,737	147,998
Inventory reserves	(14,822)	(14,710)
Inventories, net	$ 122,915	$ 133,288

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Basis of Presentation

9 Months Ended

Sep. 29, 2012

Basis of Presentation

Note 1 – Basis of Presentation

Management prepared these unaudited interim consolidated financial statements for Zebra Technologies Corporation and subsidiaries (“Zebra”) according to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. These financial statements do not include all of the information and footnotes required by United States generally accepted accounting principles (“GAAP”) for complete financial statements. Therefore, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in Zebra’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

The consolidated balance sheet as of December 31, 2011 included in this Form 10-Q is taken from the audited consolidated balance sheet in our Form 10-K. These interim financial statements include all adjustments (of a normal, recurring nature) necessary to present fairly Zebra’s consolidated financial position as of September 29, 2012, the consolidated statement of earnings for the three and nine months ended September 29, 2012 and October 1, 2011, consolidated statement of comprehensive income for the three and nine months ended September 29, 2012 and October 1, 2011, and the consolidated statement of cash flows for the nine months ended September 29, 2012 and October 1, 2011. These results, however, are not necessarily indicative of results for the full year.

Reclassifications. Prior-period amounts will differ from amounts previously reported because certain immaterial amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation.

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Stockholders' Equity (Roll Forward of Classa Common Shares Outstanding) (Detail)	9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011
Balance at the beginning of the year	52,095,166	55,711,325
Repurchases	(1,073,863)	(3,924,910)
Stock option and ESPP issuances	176,274	453,728
Restricted share issuances	236,576	214,324
Restricted share forfeitures	(113,640)	(14,013)
Shares withheld for tax obligations	(68,129)	(51,944)
Balance at the end of the period	51,252,384	52,388,510

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Income Taxes (Tables)

9 Months Ended

Sep. 29, 2012

Summary Of Effective Tax Rate

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Effective tax rate		31.0	%		28.8	%		27.5	%		29.7	%

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Equity-Based Compensation (Summary of Sar Activity) (Detail) (USD $)	9 Months Ended
	Sep. 29, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Outstanding at beginning of year	1,702,650
Shares, Granted	0
Shares, Exercised	(102,230)
Shares, Forfeited	(1,663)
Shares, Expired	(20,341)
Shares, Outstanding at end of period	1,578,416
Shares, Exercisable at end of period	1,572,730
Intrinsic value of exercised options	$ 1,090,858
Weighted-Average Exercise Price, Outstanding at beginning of year	$ 40.43
Weighted-Average Exercise Price, Granted	$ 0.00
Weighted-Average Exercise Price, Exercised	$ 27.26
Weighted-Average Exercise Price, Forfeited	$ 36.36
Weighted-Average Exercise Price, Expired	$ 43.63
Weighted-Average Exercise Price, Outstanding at end of period	$ 41.24
Weighted-Average Exercise Price, Exercisable at end of period	$ 41.32
Stock Option And Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Outstanding at beginning of year	1,287,724
Shares, Granted	428,987
Shares, Exercised	(64,582)
Shares, Forfeited	(35,725)
Shares, Expired	(2,011)
Shares, Outstanding at end of period	1,614,393
Shares, Exercisable at end of period	553,996
Intrinsic value of exercised options	$ 953,020
Weighted-Average Exercise Price, Outstanding at beginning of year	$ 28.91
Weighted-Average Exercise Price, Granted	$ 38.51
Weighted-Average Exercise Price, Exercised	$ 23.05
Weighted-Average Exercise Price, Forfeited	$ 34.30
Weighted-Average Exercise Price, Expired	$ 41.57
Weighted-Average Exercise Price, Outstanding at end of period	$ 31.56
Weighted-Average Exercise Price, Exercisable at end of period	$ 26.48

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Discontinued Operations

9 Months Ended

Sep. 29, 2012

Discontinued Operations

Note 17 Discontinued Operations

Sale of Navis, LLC - On March 18, 2011, we sold our Navis marine terminal solutions business and the related WhereNet marine terminal solutions product line of our Zebra Enterprise Solutions (“ZES”) business segment for approximately $188,588,000 in cash to Cargotec Corporation. We received $13,790,000 of the previously escrowed funds in the first quarter of 2012, and we received the remaining escrowed funds in the amount of $13,790,000 in the third quarter of 2012.

Sale of proveo AG - On August 3, 2011, we entered into a Share Purchase Agreement with F Two NV (a Belgium company) to sell all of our interest in Zebra Enterprise Solutions GmbH (formerly proveo AG) business. The loss recorded upon divestiture was $1,248,000. As part of the sale, Zebra agreed with the buyer to provide a revolving loan of up to €1,000,000 which was due August 3, 2012 and bore interest at 6.5%. Zebra realized tax benefits in the amount of $13,308,000 with the divestiture of proveo AG. These tax benefits are primarily related to the difference in book basis versus tax basis. On June 29, 2012 F Two NV (a Belgium company) sold the business and assigned the revolving loan to OBQ SA (a Luxembourg company) with Zebra’s consent. The revolving loan commitment was reduced to a lesser amount of up to €526,058. The due date for borrowings under the agreement was extended from August 3, 2012 to December 31, 2012. The interest rate remains unchanged at 6.5%.

Beginning in the first quarter of 2011, Zebra reported the results of these businesses as discontinued operations. The amounts presented below for discontinued operations include the operating results of Navis and proveo for the three and nine months ended September 29, 2012 and October 1, 2011. After the Navis sale, Zebra consolidated the remaining Location Solutions product lines.

Summary results for discontinued operations in our unaudited consolidated statement of earnings are as follows (in thousands):

	Three Months Ended					Nine Months Ended
	September 29, 2012		October 1, 2011			September 29, 2012			October 1, 2011
Net sales	$	0	$	233		$	0		$	13,945
Income (loss) from discontinued operations	$	15	$	(1,246	)	$	(135	)	$	(13,970	)
Income tax (expense) benefit		501		0			338			1,105
Gain (loss) on sale of discontinued operations		0		(1,248	)		613			66,753
Income tax (expense) benefit on sale		0		13,308			0			(11,773	)
Income from discontinued operations	$	516	$	10,814		$	816		$	42,115

The components of cash flows of discontinued operations in our unaudited consolidated statement of cash flows are as follows (in thousands):

	Nine Months Ended
	September 29, 2012		October 1, 2011
Cash flows from discontinued operations:
Net cash used by operating activities	$	0	$	(1,301	)
Net cash provided by (used in) investing activities		0		0
Net cash provided by (used in) financing activities		0		0
Effect of exchange rate changes on cash		0		0
Net decrease in cash and cash equivalents		0		(1,301	)
Cash and cash equivalents at beginning of period		0		1,301
Cash and cash equivalents at end of period	$	0	$	0

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Other Comprehensive Income (Tables)

9 Months Ended

Sep. 29, 2012

Components Of Other Comprehensive Income Gross And Net Of Income Tax

The significant components of other comprehensive income gross and net of income tax are as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Unrealized gains (losses) on hedging transactions:
Gross	$	(5,458	)	$	8,617		$	(8,599	)	$	4,164
Income tax (benefit) expense		(1,512	)		3,002			(2,407	)		1,326
Net	$	(3,946	)	$	5,615		$	(6,192	)	$	2,838
Unrealized gains (losses) on investments:
Gross	$	556		$	(989	)	$	1,355		$	(455	)
Income tax (benefit) expense		164			(353	)		438			(152	)
Net	$	392		$	(636	)	$	917		$	(303	)

Components Of Accumulated Other Comprehensive Income (Loss)

	As of
	September 29, 2012			December 31, 2011
Unrealized gains and (losses) on hedging transactions:
Gross	$	(1,244	)	$	7,355
Income tax (benefit) expense		(311	)		2,096
Net		(933	)		5,259
Unrealized gains and (losses) on investments classified as available-for-sale:
Gross		558			(797	)
Income tax (benefit) expense		150			(288	)
Net		408			(509	)
Foreign currency translation adjustments		(8,765	)		(8,963	)
Total accumulated other comprehensive loss	$	(9,290	)	$	(4,213	)

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Basis of Presentation (Policies)

9 Months Ended

Sep. 29, 2012

Reclassifications

Reclassifications. Prior-period amounts will differ from amounts previously reported because certain immaterial amounts in the prior years’ financial statements have been reclassified to conform to the current year’s presentation.

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Equity-Based Compensation (Summary Of Awards Granted Under Equity-Based Compensation Plans) (Detail) (USD $)	9 Months Ended
	Sep. 29, 2012
Shareholders Equity And Share Based Payments [Line Items]
Unearned compensation costs related to awards granted	$ 21,978,000
Period expected to be recognized over	2 years 7 months 6 days

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Fair Value Measurements

9 Months Ended

Sep. 29, 2012

Fair Value Measurements

Note 2 – Fair Value Measurements

Financial assets and liabilities are to be measured using inputs from three levels of the fair value hierarchy. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Zebra uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs (i.e. U.S. Treasuries and money market funds).

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in the assessment of fair value. Included in our investment portfolio at September 29, 2012, is an auction rate security which is classified as available for sale and is reflected at fair value. Due to events in credit markets, however, the auction event for the instrument held by Zebra is failed. Therefore, the fair value of this security is estimated utilizing broker quotations, discounted cash flow analysis or other types of valuation adjustment methodologies at September 29, 2012. These analyses consider, among other items, the collateral underlying the security instruments, the creditworthiness of the counterparty, the timing of expected future cash flows, estimates of the next time the security is expected to have a successful auction, and Zebra’s intent and ability to hold such securities until credit markets improve. The security was also compared, when possible, to other securities with similar characteristics.

The decline in the market value of our auction rate security discussed above is considered temporary and has been recorded in accumulated other comprehensive income loss on Zebra’s balance sheet. Since Zebra has the intent and ability to hold this auction rate security until it is sold at auction, redeemed at carrying value or reaches maturity, we have classified it as a long-term investment on the balance sheet.

Financial assets and liabilities carried at fair value as of September 29, 2012, are classified below (in thousands):

	Level 1		Level 2			Level 3		Total
Assets:
U.S. government and agency securities	$	80,885	$	12,491		$	0	$	93,376
Obligations of government-sponsored enterprises (1)		0		5,048			0		5,048
State and municipal bonds		0		101,024			0		101,024
Corporate securities		0		114,470			2,588		117,058
Other investments		0		36			0		36
Investments subtotal		80,885		233,069			2,588		316,542
Money market investments related to the deferred compensation plan		3,424		0			0		3,424
Total assets at fair value	$	84,309	$	233,069		$	2,588	$	319,966
Liabilities:
Forward contracts (2)	$	1,843	$	(767	)	$	0	$	1,076
Liabilities related to the deferred compensation plan		3,424		0			0		3,424
Total liabilities at fair value	$	5,267	$	(767	)	$	0	$	4,500

Financial assets and liabilities carried at fair value as of December 31, 2011, are classified below (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
U.S. government and agency securities	$	25,540	$	25,307	$	0	$	50,847
Obligations of government-sponsored enterprises (1)		0		16,612		0		16,612
State and municipal bonds		0		142,873		0		142,873
Corporate securities		0		77,321		2,588		79,909
Other investments		0		36		0		36
Investments subtotal		25,540		262,149		2,588		290,277
Forward contracts (2)		2,626		6,584		0		9,210
Money market investments related to the deferred compensation plan		3,199		0		0		3,199
Total assets at fair value	$	31,365	$	268,733	$	2,588	$	302,686
Liabilities:
Liabilities related to the deferred compensation plan	$	3,199	$	0	$	0	$	3,199
Total liabilities at fair value	$	3,199	$	0	$	0	$	3,199

(1) Includes investments in notes issued by the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Farm Credit Banks, and the Federal Home Loan Bank.

(2) The fair value of contracts are calculated as follows:

a. Fair value of a collar or put option contract associated with forecasted sales hedges are calculated using bid and ask rates for similar contracts.

b. Fair value of regular forward contracts associated with forecasted sales hedges are calculated using the period-end exchange rate adjusted for current forward points.

c. Fair value of balance sheet hedges are calculated at the period end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at period end. If this is the case, the fair value is calculated at the rate at which the hedge is being settled.

The following table presents Zebra’s activity for assets measured at fair value on a recurring basis using significant unobservable inputs, Level 3, for the following periods (in thousands):

	Nine Months Ended
	September 29, 2012		October 1, 2011
Balance at beginning of the year	$	2,588	$	5,597
Transfers to Level 3		0		0
Total losses (realized or unrealized):
Included in earnings		0		(362	)
Included in other comprehensive income (loss)		0		317
Purchases and settlements (net)		0		(2,964	)
Balance at end of period	$	2,588	$	2,588
Total gains and (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets still held at end of period	$	0	$	0

The following is a summary of current and long-term investments (in thousands):

	As of September 29, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	93,286	$	90	$	0		$	93,376
Obligations of government-sponsored enterprises		5,037		11		0			5,048
State and municipal bonds		100,836		202		(14	)		101,024
Corporate securities		116,791		802		(535	)		117,058
Other investments		36		0		0			36
Total investments	$	315,986	$	1,105	$	(549	)	$	316,542

	As of December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government and agency securities	$	50,738	$	115	$	(6	)	$	50,847
Obligations of government-sponsored enterprises		16,581		32		(1	)		16,612
State and municipal bonds		142,586		330		(43	)		142,873
Corporate securities		81,132		164		(1,387	)		79,909
Other investments		36		0		0			36
Total investments	$	291,073	$	641	$	(1,437	)	$	290,277

The maturity dates of investments are as follows (in thousands):

	As of September 29, 2012
	Amortized Cost		Estimated Fair Value
Less than 1 year	$	160,523	$	160,690
1 to 5 years		150,818		151,579
6 to 10 years		4,645		4,273
Thereafter		0		0
Total	$	315,986	$	316,542

The carrying value for Zebra’s financial instruments classified as current assets and current liabilities approximate fair value due to their short maturities.

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CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012	Oct. 01, 2011
Net sales
Net sales of tangible products	$ 239,786	$ 241,686	$ 706,970	$ 700,568
Revenue from services and software	12,251	11,652	36,019	35,612
Total net sales	252,037	253,338	742,989	736,180
Cost of sales
Cost of sales of tangible products	118,751	122,529	357,764	351,042
Cost of services and software	6,362	7,256	18,041	19,889
Total cost of sales	125,113	129,785	375,805	370,931
Gross profit	126,924	123,553	367,184	365,249
Operating expenses:
Selling and marketing	32,321	31,942	96,593	91,420
Research and development	22,007	22,584	64,759	66,752
General and administrative	22,481	18,978	71,203	62,372
Amortization of intangible assets	1,670	843	3,210	2,514
Acquisition costs	566	188	2,072	188
Exit and restructuring costs	0	138	0	2,090
Asset impairment charge	9,114	0	9,114	0
Total operating expenses	88,159	74,673	246,951	225,336
Operating income	38,765	48,880	120,233	139,913
Other income (expense):
Investment income	541	134	1,959	1,350
Foreign exchange loss	(514)	(173)	(936)	(1,300)
Other, net	(294)	(859)	(1,144)	(1,356)
Total other income (expense)	(267)	(898)	(121)	(1,306)
Income from continuing operations before income taxes	38,498	47,982	120,112	138,607
Income taxes	11,917	13,795	33,014	41,123
Income from continuing operations	26,581	34,187	87,098	97,484
Income from discontinued operations, net of tax	516	10,814	816	42,115
Net income	$ 27,097	$ 45,001	$ 87,914	$ 139,599
Basic earnings per share:
Income from continuing operations	$ 0.52	$ 0.64	$ 1.68	$ 1.79
Income from discontinued operations	$ 0.01	$ 0.20	$ 0.02	$ 0.77
Net income	$ 0.53	$ 0.84	$ 1.70	$ 2.56
Diluted earnings per share:
Income from continuing operations	$ 0.51	$ 0.64	$ 1.67	$ 1.78
Income from discontinued operations	$ 0.01	$ 0.20	$ 0.02	$ 0.77
Net income	$ 0.52	$ 0.84	$ 1.69	$ 2.55
Basic weighted average shares outstanding	51,566	53,339	51,775	54,405
Diluted weighted average and equivalent shares outstanding	51,809	53,628	52,041	54,770

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Earnings Per Share

9 Months Ended

Sep. 29, 2012

Earnings Per Share

Note 12 – Earnings Per Share

Earnings per share were computed as follows (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Weighted average shares:
Weighted average common shares outstanding		51,566		53,339		51,775		54,405
Effect of dilutive securities outstanding		243		289		266		365
Diluted weighted average shares outstanding		51,809		53,628		52,041		54,770
Earnings:
Income from continuing operations	$	26,581	$	34,187	$	87,098	$	97,484
Income from discontinued operations		516		10,814		816		42,115
Net income	$	27,097	$	45,001	$	87,914	$	139,599
Basic per share amounts:
Income from continuing operations	$	0.52	$	0.64	$	1.68	$	1.79
Income from discontinued operations		0.01		0.20		0.02		0.77
Net income	$	0.53	$	0.84	$	1.70	$	2.56
Diluted per share amounts:
Income from continuing operations	$	0.51	$	0.64	$	1.67	$	1.78
Income from discontinued operations		0.01		0.20		0.02		0.77
Net income	$	0.52	$	0.84	$	1.69	$	2.55

Potentially dilutive securities that were excluded from the earnings per share calculation consist of options and stock appreciation rights (SARs) with an exercise price or base price greater than the average market closing price of the Class A common stock during the respective periods. These excluded options and SARs were as follows:

	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Potentially dilutive shares		2,150,000		1,851,000		1,809,000		1,446,000

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Document and Entity Information	9 Months Ended
	Sep. 29, 2012	Oct. 26, 2012
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 29, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Trading Symbol	ZBRA
Entity Registrant Name	ZEBRA TECHNOLOGIES CORP
Entity Central Index Key	0000877212
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		50,858,051

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Equity-Based Compensation

9 Months Ended

Sep. 29, 2012

Equity-Based Compensation

Note 13 – Equity-Based Compensation

Zebra has an equity-based compensation plan and a stock purchase plan available for future grants. Zebra recognizes compensation costs using the straight-line method over the vesting period of up to 5 years.

The compensation expense and the related tax benefit for equity-based payments were included in the Consolidated Statement of Earnings as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Cost of sales	$	287	$	218	$	820	$	755
Selling and marketing		511		333		1,271		1,107
Research and development		374		343		1,196		1,037
General and administrative		2,268		2,204		8,198		7,149
Total compensation	$	3,440	$	3,098	$	11,485	$	10,048
Income tax benefit	$	1,217	$	1,069	$	4,003	$	3,467

Cash flows resulting from the tax benefits of tax deductions in excess of the compensation cost recognized (excess tax benefits) are classified as financing cash flows in the statement of cash flows. The tax benefits classified as financing cash flows for the nine months ended September 29, 2012 was $1,492,000 and for the nine months ended October 1, 2011 was $1,265,000.

The fair value of equity-based compensation is estimated on the date of grant using a binomial model. Volatility is based on an average of the implied volatility in the open market and the annualized volatility of Zebra stock prices over our entire stock history. Grants in the tables below include both stock options, all of which were non-qualified, and stock appreciation rights (SAR) that will be settled in Zebra stock. The following table shows the weighted-average assumptions used for grants of SARs as well as the fair value of the grants based on those assumptions:

	Nine Months Ended
	September 29, 2012			October 1, 2011
Expected dividend yield		0	%		0	%
Forfeiture rate		10.21	%		11.50	%
Volatility		35.90	%		35.33	%
Risk free interest rate		.94	%		2.01	%
Range of interest rates		0.07% - 1.95	%		0.01% - 3.18	%
Expected weighted-average life		5.48 years			5.42 years
Fair value of stock appreciation rights (SARs) granted	$	5,507,000		$	5,495,000
Weighted-average grant date fair value of SARs granted	$	12.84		$	14.29

SAR activity was as follows:

	Nine Months Ended September 29, 2012
SARs	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		1,287,724		$	28.91
Granted		428,987			38.51
Exercised		(64,582	)		23.05
Forfeited		(35,725	)		34.30
Expired		(2,011)			41.57
Outstanding at end of period		1,614,393		$	31.56
Exercisable at end of period		553,996		$	26.48
Intrinsic value of exercised SARs	$	953,020

The terms of the SARs are established under either the 2006 Incentive Compensation Plan or the 2011 Long-Term Incentive Plan (the “Plans”) and the applicable SAR agreement. Once vested, a SAR entitles the holder to receive a payment equal to the difference between the per-share base price of the SAR and the fair market value of a share of Zebra stock on the date the SAR is exercised, multiplied by the number of SARs exercised. Exercised SARs are settled in whole shares of Zebra stock, and any fraction of a share is settled in cash. The SARs granted typically vest annually in four equal amounts on each of the first four anniversaries of the grant date, with some SARs vesting over a period of five years and SAR’s granted in 2012 to non-employee directors being fully vested upon grant. Absent an early expiration due to termination of employment, all SARs expire 10 years after the grant date.

The following table summarizes information about SARs outstanding at September 29, 2012:

	Outstanding						Exercisable
Range of Exercise Prices	Number of Shares		Weighted-Average Remaining Contractual Life		Weighted-Average Exercise Price		Number of Shares		Weighted-Average Exercise Price
$ 19.56-$19.56		368,856		6.60 years	$	19.56		256,826	$	19.56
$ 21.83-$27.50		56,764		7.10 years		24.82		46,761		24.64
$ 27.82-$27.82		400,461		7.60 years		27.82		127,518		27.82
$ 28.33-$37.15		61,725		9.02 years		33.37		25,976		34.82
$ 38.79-$42.36		726,587		9.12 years		40.09		96,915		41.69
		1,614,393						553,996

	Outstanding		Exercisable
Aggregate intrinsic value	$	10,972,000	$6,257,000
Weighted-average remaining contractual term		8.1 years	7.4 years

Stock option activity was as follows:

	Nine Months Ended September 29, 2012
Options	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		1,702,650		$	40.43
Granted		0			0.00
Exercised		(102,230	)		27.26
Forfeited		(1,663	)		36.36
Expired		(20,341	)		43.63
Outstanding at end of period		1,578,416		$	41.24
Exercisable at end of period		1,572,730		$	41.32
Intrinsic value of exercised options	$	1,090,858

The following table summarizes information about stock options outstanding at September 29, 2012:

	Outstanding						Exercisable
Range of Exercise Prices	Number of Shares		Weighted-Average Remaining Contractual Life		Weighted-Average Exercise Price		Number of Shares		Weighted-Average Exercise Price
$ 1.29-$36.49		422,223		4.78 years	$	32.84		416,537	$	33.02
$ 36.80-$41.25		378,221		4.56 years		39.78		378,221		39.78
$ 42.28-$45.62		401,316		2.99 years		44.51		401,316		44.51
$ 46.18-$51.62		374,856		2.20 years		48.63		374,856		48.63
$ 53.92-$53.92		1,800		1.66 years		53.92		1,800		53.92
		1,578,416						1,572,730

	Outstanding		Exercisable
Aggregate intrinsic value	$	1,744,000	$1,643,000
Weighted-average remaining contractual term		3.7 years	3.7 years

Restricted stock award activity was as follows:

	Nine Months Ended September 29, 2012
Restricted Stock Awards	Shares			Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		836,141		$	28.34
Granted		235,889			38.53
Released		(226,978	)		20.93
Forfeited		(113,640	)		23.26
Outstanding at end of period		731,412		$	34.72

Zebra’s restricted stock awards are expensed over the vesting period of the related award, typically three to five years. Compensation cost is calculated as the market date fair value on the grant date multiplied by the number of shares granted.

	As of September 29, 2012
Awards granted under Zebra’s equity based compensation plans:
Unearned compensation costs related to awards granted	$	21,978,000
Period expected to be recognized over		2.6 years

The fair value of the purchase rights of all Zebra employees issued under the stock purchase plan is estimated using the following weighted-average assumptions for purchase rights granted. Expected lives of three months to one year have been used along with these assumptions.

	Nine Months Ended
	September 29, 2012			October 1, 2011
Fair market value	$	34.93		$	35.86
Option price	$	33.18		$	34.07
Expected dividend yield		0	%		0	%
Expected volatility		21	%		32	%
Risk free interest rate		0.06	%		0.09	%

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012	Oct. 01, 2011
Net income	$ 27,097	$ 45,001	$ 87,914	$ 139,599
Other comprehensive income (loss):
Unrealized gains (losses) on hedging transactions, net of income taxes	(3,946)	5,615	(6,192)	2,838
Unrealized holding gains (losses) on investments, net of income taxes	392	(636)	917	(303)
Foreign currency translation adjustment	12	173	198	(630)
Comprehensive income	$ 23,555	$ 50,153	$ 82,837	$ 141,504

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Costs Associated with Exit and Restructuring Activities

9 Months Ended

Sep. 29, 2012

Costs Associated with Exit and Restructuring Activities

Note 7 – Costs Associated with Exit and Restructuring Activities

In January 2011, we announced an agreement to sell a significant portion of the Zebra Enterprise Solutions (ZES) segment, which primarily consisted of Navis, to Cargotec Corporation. We retained the Location Solutions products from the former ZES, which included active RFID real-time location solutions and associated tags and readers. In the first quarter of 2011, we also announced a plan to consolidate any remaining administrative and accounting functions from the former ZES into our corporate facilities in Illinois. The costs for 2011 below represent the costs related to the consolidation and relocation of the administrative and accounting functions. We do not anticipate costs in 2012 related to this restructuring.

The following is a summary of 2011 exit and restructuring costs incurred (in thousands):

	Three Months Ended		Nine Months Ended
Type of Cost:	October 1, 2011		October 1, 2011
Severance, stay bonuses, and other employee-related expenses	$	100	$	1,171
Professional services		38		885
Relocation and transition costs		0		34
Other exit costs		0		0
Total	$	138	$	2,090

Liabilities and expenses related to exit and restructuring activities were as follows (in thousands):

	Nine Months Ended
	September 29, 2012			October 1, 2011
Balance at beginning of period	$	1,048		$	1,301
Charged to earnings		0			2,090
Cash paid		(872	)		(2,086	)
Balance at the end of period	$	176		$	1,305

Liabilities related to exit and restructuring activities are included in the accrued liabilities line item on the balance sheet. All exit costs are included in operating expenses under the line item exit and restructuring costs.

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 29, 2012

Goodwill and Other Intangible Assets

Note 6 – Goodwill and Other Intangible Assets

Intangible assets are as follows (in thousands):

	As of September 29, 2012
	Gross Amount		Accumulated Amortization			Net Amount
Current technology	$	18,978	$	(11,975	)	$	7,003
Patent and patent rights		27,972		(14,175	)		13,797
Customer relationships		20,493		(2,276	)		18,217
Other intangibles, net	$	67,443	$	(28,426	)	$	39,017
Amortization expense for the nine months ended September 29, 2012			$	3,210

	As of December 31, 2011
	Gross Amount		Accumulated Amortization			Net Amount
Current technology	$	12,718	$	(11,403	)	$	1,315
Patent and patent rights		23,392		(12,079	)		11,313
Customer relationships		1,773		(1,734	)		39
Other intangibles, net	$	37,883	$	(25,216	)	$	12,667
Amortization expense for the nine months ended October 1, 2011			$	2,514

On July 13, 2012, we acquired intangible assets in the amount of $29,560,000 for patents, technology and customer relationships. These intangible assets have an estimated useful life ranging from 5 to 9 years. See Note 18 Business Combinations for specific information regarding the acquisition. In addition, during 2012, Zebra has paid $3,000,000 towards intangible asset commitments accrued and recorded as of December 31, 2011.

We test goodwill for impairment on an annual basis or more frequently if we believe indicators of impairment exist. Factors considered that may trigger an impairment review consist of:

• Significant underperformance relative to historical or projected future operating results,

• Significant changes in the manner of use of the acquired assets or the strategy for the overall business,

• Significant negative industry or economic trends,

• Significant decline in Zebra’s stock price for a sustained period, and

• Significant decline in market capitalization relative to net book value.

If we believe that one or more of the above indicators of impairment have occurred, we perform an impairment test. The performance of the test involves a two-step process. The first step of the impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. We generally determine the fair value of our reporting units using three valuation methods: Income Approach – Discounted Cash Flow Analysis, Market Approach – Guideline Public Company Method, and Market Approach – Comparative Transactions Method. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, we perform the second step of the goodwill impairment test to determine the amount of impairment loss. The second step of the goodwill impairment test involves comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill.

We performed our annual impairment test in June 2012 and determined that our goodwill was not impaired as of the end of May 2012. Zebra has two reporting units required for its annual goodwill impairment test. As of our May 2012 testing date, the larger of the two reporting units’ fair value exceeded its carrying value by a significant amount; whereas the second, smaller reporting unit, the amount by which the fair value exceeded the carrying value ranged from approximately 8% under the Income Approach to 31% under the Market Approach. Key assumptions used in the first step of the goodwill impairment test were determined by management utilizing the internal operating plan. The key assumptions utilized included forecasted growth rates for revenues and operating expenses as well as a discount rate which is determined by looking at current risk-free rates of capital, current market interest rates, and the evaluation of risk premium relevant to the business segment. Due to the deterioration in the smaller reporting unit’s operating results during the third quarter our fair value calculation for the smaller reporting unit changed and we determined our goodwill associated with the smaller reporting unit to be impaired. The above impairment indicators led us to conclude an interim goodwill test was necessary. Zebra performed the first step of the impairment test and failed. As a result, Zebra performed a preliminary second step analysis and recorded an estimated goodwill impairment charge of $9,114,000 as of September 29, 2012. This amount is an estimate and could be adjusted upon completion of a detailed impairment analysis. After this impairment charge, there is no remaining goodwill in the smaller reporting unit.

Changes in the net carrying value amount of goodwill were as follows (in thousands):

Unamortized intangible assets:	Total
Goodwill at gross	$	180,731
Impairment charge – 2008		(101,028	)
Goodwill as of December 31, 2011		79,703
Acquisitions – LaserBand		24,756
Impairment charge – 2012		(9,114	)
Goodwill as of September 29, 2012	$	95,345

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Business Combinations

9 Months Ended

Sep. 29, 2012

Business Combinations

Note 18 Business Combinations

LaserBand LLC. On July 13, 2012, Zebra acquired all of the outstanding membership interests in LaserBand LLC (a Missouri limited liability company) for $59,874,000 in cash, subject to a working capital adjustment. As part of the acquisition closing, an escrow balance of approximately $8,700,000 was established against the total purchase price.

LaserBand LLC is based in St. Louis, Missouri, and is a leader in patient identification wristbands and related products. LaserBand strengthens Zebra’s product and patent portfolio and enables Zebra to offer a wider array of products to hospitals, other healthcare organizations and other wristband customers. The consolidated financial statements include the operating results of LaserBand from the date of acquisition. Pro forma results have not been presented because the effect of the acquisition is not material to the company’s financial results.

The following table (in thousands) summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition:

	As of
	July 13, 2012
Current assets	$	6,614
Property and equipment		46
Other assets		17
Goodwill		24,756
Other intangibles		29,560
Total assets acquired	$	60,993
Current liabilities		1,119
Net assets acquired	$	59,874

On a preliminary basis pending the receipt of final valuations, the purchase price was allocated to identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values resulting in goodwill of $24,756,000. The intangible assets of $29,560,000 consist of the following (in thousands):

	Amount		Useful life
Current technology	$	6,260	5 years
Patents and patent rights		4,580	7 years
Customer relationships		18,720	5 to 9 years
Acquired other intangibles	$	29,560

The goodwill is deductible for tax purposes.

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Income Taxes

9 Months Ended

Sep. 29, 2012

Income Taxes

Note 14 – Income Taxes

Zebra has identified, evaluated, and measured the amount of income tax benefits to be recognized for all of our income tax positions. Included in deferred tax assets are amounts related to federal and state net operating losses that resulted from our acquisition of WhereNet Corp in 2007. We intend to utilize these net operating loss carryforwards to offset future income taxes.

Zebra earns a significant amount of our operating income outside of the U.S., which is deemed to be permanently reinvested in foreign jurisdictions. Zebra does not intend to repatriate funds, however, should Zebra require more capital in the U.S. than is generated by our operations locally, Zebra could elect to repatriate funds held in foreign jurisdictions or raise capital in the U.S. through debt or equity issuances. These alternatives could result in higher effective tax rates or increased interest expense.

The U.S. federal tax return for 2011 is currently open and subject to an audit by the Internal Revenue Service. The 2007 tax return is open on a limited basis due to an amended return filed in August 2011. The tax years 2008 through 2010 remain open to examination by multiple state taxing jurisdictions. Tax authorities in the United Kingdom have completed income tax audits for tax years through 2006.

Zebra’s continuing practice is to recognize interest and/or penalties related to income tax matters as part of income tax expense. For the nine months ended September 29, 2012 and October 1, 2011, we did not accrue any interest or penalties into income tax expense.

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Effective tax rate		31.0	%		28.8	%		27.5	%		29.7	%

Zebra’s estimates of taxes for interim periods are based upon the annual effective tax rate for the full-year, adjusted for any discrete items that relate to an interim period. The estimated annual effective tax rate is determined using projections of full-year taxable income by each Zebra legal entity with the appropriate statutory tax rate for that subsidiary applied. The effective rate may change during the year, typically due to the change in our estimated taxable income by jurisdiction as each year progresses.

The 2012 effective tax rate increase in the third quarter reflects a discrete item for a nondeductible asset impairment charge which is offset by a rate decrease related to the second quarter implementation of a new structure for Zebra’s international subsidiaries. The effect of the non-deductible asset impairment charge increased the effective tax rate by 6.0% for the third quarter of 2012. Effective August 2012, the statutory tax rate in the UK declined from 25.5 % to 24.5%.

The effective income tax rate for the first nine months of 2012 was 27.5% compared with an income tax rate of 29.7% for the first nine months of 2011. The 2012 effective tax rate decline for the first nine months of 2012 compared to 2011 reflects the implementation of a new structure for Zebra’s international subsidiaries which has contributed to reducing the effective tax rate. In addition, the UK statutory rate decreased from 25.5% to 24.5% in August 2012. These reductions were offset by a discrete item in the third quarter of 2012 related to a non-deductible asset impairment charge which increased the effective tax rate for first nine months of 2012 by 2.0%. The rate in 2011 included a tax valuation allowance in the first quarter of 2011 against a subsequently disposed subsidiary.

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Contingencies

9 Months Ended

Sep. 29, 2012

Contingencies

Note 10 – Contingencies

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.

Revolving Credit Agreement. On October 10, 2012, Zebra entered into a revolving credit agreement for a five-year $250 million 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 the 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%. This spread for LIBOR-based loans depends on our ratio of Total Debt to EBITDA, as defined in the agreement, and 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 draw or loan request under the New Credit Agreement at the time of closing.

The credit agreement includes customary representations, warranties, affirmative and negative covenants (including, among others, restrictions on the payment of cash dividends) and events of default (and related remedies, including acceleration and increased interest rates following an event of default). It also contains financial covenants tied to Zebra’s leverage ratio and interest coverage ratio.

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

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Earnings Per Share (Computation Of Earnings Per Share) (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012	Oct. 01, 2011
Earnings Per Share [Line Items]
Weighted average common shares outstanding	51,566	53,339	51,775	54,405
Effect of dilutive securities outstanding	243	289	266	365
Diluted weighted average shares outstanding	51,809	53,628	52,041	54,770
Income from continuing operations	$ 26,581	$ 34,187	$ 87,098	$ 97,484
Income from discontinued operations	516	10,814	816	42,115
Net income	$ 27,097	$ 45,001	$ 87,914	$ 139,599
Income from continuing operations, Basic per share amounts	$ 0.52	$ 0.64	$ 1.68	$ 1.79
Income from discontinued operations, Basic per share amounts	$ 0.01	$ 0.20	$ 0.02	$ 0.77
Net income, Basic per share amounts	$ 0.53	$ 0.84	$ 1.70	$ 2.56
Income from continuing operations, Diluted per share amounts	$ 0.51	$ 0.64	$ 1.67	$ 1.78
Income from discontinued operations, Diluted per share amounts	$ 0.01	$ 0.20	$ 0.02	$ 0.77
Net income, Diluted per share amounts	$ 0.52	$ 0.84	$ 1.69	$ 2.55

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Derivative Instruments

9 Months Ended

Sep. 29, 2012

Derivative Instruments

Note 8 – Derivative Instruments

In the normal course of business, portions of our operations are subject to fluctuations in currency values. Zebra and its principal subsidiaries are all designated US dollar functional currency. Certain other subsidiaries are designated in functional local currency due to legal requirements or the nature of their business.

We manage these currency risks using derivative financial instruments. Our exposure to market risk for changes in foreign currency exchange rates arises from international financing activities between subsidiaries, foreign currency denominated monetary assets and liabilities and transactions arising from international trade. Our objective is to preserve the economic value of non-functional currency denominated cash flows. We attempt to hedge transaction exposures with natural offsets to the fullest extent possible and, once these opportunities have been exhausted, through foreign exchange forward and option contracts with third parties.

Credit and market risk

Financial instruments, including derivatives, expose us to counter party credit risk for nonperformance and to market risk related to interest and currency exchange rates. We manage our exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties, and procedures to monitor concentrations of credit risk. Our counterparties in derivative transactions are commercial banks with significant experience using derivative instruments. We monitor the impact of market risk on the fair value and cash flows of our derivative and other financial instruments considering reasonably possible changes in interest rates and currency exchange rates and restrict the use of derivative financial instruments to hedging activities.

We continually monitor the creditworthiness of our customers to which we grant credit terms in the normal course of business. The terms and conditions of our credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer.

Fair Value of Derivative Instruments

Zebra has determined that derivative instruments for hedges that have traded but have not settled are considered Level 1 in the fair value hierarchy, and hedges that have not traded are considered Level 2 in the fair value hierarchy. Derivative instruments are used to manage risk and are not used for trading or other speculative purposes, nor do we use leveraged derivative financial instruments. Our foreign currency exchange contracts are valued using broker quotations or market transactions, in either the listed or over-the-counter markets.

Hedging of Net Assets

We use forward contracts and options to manage exposure related to our pound and euro-denominated net assets. Forward contracts typically mature within three months after execution of the contracts. We record gains and losses on these contracts and options in income each quarter along with the transaction gains and losses related to our net asset positions, which would ordinarily offset each other.

Summary financial information related to these activities included in our consolidated statement of earnings as other income (expense) is as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Change in gains (losses) from foreign exchange derivatives	$	(1,649	)	$	3,108		$	(208	)	$	(3,155	)
Gains (losses) on net foreign currency assets		1,135			(3,281	)		(728	)		1,855
Foreign exchange loss	$	(514	)	$	(173	)	$	(936	)	$	(1,300	)

	As of
	September 29, 2012			December 31, 2011
Notional balance of outstanding contracts:
Pound/US dollar	£	3,412		£	6,016
Euro/US dollar	€	36,640		€	36,684
Net fair value of outstanding contracts	$	(17	)	$	(54	)

Hedging of Anticipated Sales

We manage the exchange rate risk of anticipated euro-denominated sales using purchased options, forward contracts, participating forwards and option collars. We designate these contracts as cash flow hedges which mature within twelve months after the execution of the contracts. Gains and losses on these contracts are deferred in other comprehensive income until the contracts are settled and the hedged sales are realized, the deferred gains or losses will then be reported as an increase or decrease to sales.

Summary financial information related to the cash flow hedges is as follows (in thousands):

	As of
	September 29, 2012			October 1, 2011
Unrealized gains and (losses) on hedging transactions:
Gross	$	(8,599	)	$	4,164
Income tax expense (benefit)		(2,407	)		1,326
Net	$	(6,192	)	$	2,838

Summary financial information related to the cash flow hedges of future revenues follows (in thousands, except percentages):

	As of
	September 29, 2012			December 31, 2011
Notional balance of outstanding contracts versus the dollar	€	91,560		€	92,305
Hedge effectiveness		100	%		100	%

	Three Months Ended					Nine Months Ended
	September 29, 2012		October 1, 2011			September 29, 2012		October 1, 2011
Net gains and (losses) included in revenue	$	1,967	$	(1,487	)	$	4,616	$	(4,272	)

Forward contracts

We record our forward contracts at fair value, on our consolidated balance sheet, which are included in either of the following lines on the balance sheet, prepaid expenses, and other current assets or accrued liabilities, depending upon the fair value calculation as detailed in Note 2 of Zebra’s financial statements. The amounts recorded on our consolidated balance sheet are as follows (in thousands):

	As of
	September 29, 2012		December 31, 2011
Assets:
Prepaid expenses and other current assets	$	0	$	9,210
Total	$	0	$	9,210
Liabilities:
Accrued liabilities	$	1,076	$	0
Total	$	1,076	$	0

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Warranty

9 Months Ended

Sep. 29, 2012

Warranty

Note 9 – Warranty

In general, Zebra provides warranty coverage of one year on printers against defects in material and workmanship. Printheads are warranted for nine months and batteries are warranted for one year. Battery based products, such as location tags, are covered by a 30-day warranty. A provision for warranty expense is recorded at the time of shipment and adjusted quarterly based on historical warranty experience.

The following table is a summary of Zebra’s accrued warranty obligation (in thousands):

	Nine Months Ended
	September 29, 2012			October 1, 2011
Balance at the beginning of the year	$	4,613		$	4,554
Warranty expense		4,667			4,051
Warranty payments		(5,222	)		(4,115	)
Balance at the end of the period	$	4,058		$	4,490

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Stockholders' Equity

9 Months Ended

Sep. 29, 2012

Stockholders' Equity

Note 11 – Stockholders’ Equity

Share count and par value data related to stockholders’ equity are as follows:

	As of
	September 29, 2012		December 31, 2011
Preferred Stock
Par value per share	$	0.01	$	0.01
Shares authorized		10,000,000		10,000,000
Shares outstanding		0		0
Common Stock - Class A
Par value per share	$	0.01	$	0.01
Shares authorized		150,000,000		150,000,000
Shares issued		72,151,857		72,151,857
Shares outstanding		51,252,384		52,095,166
Treasury stock
Shares held		20,899,473		20,056,691

During the nine month period ended September 29, 2012, Zebra purchased 1,073,863 shares of common stock for $39,697,000 under a board authorized share repurchase plan, compared with purchases of 3,924,910 shares of common stock for $146,373,000 for the nine month period ended October 1, 2011.

A roll forward of Class A common shares outstanding is as follows:

	Nine Months Ended
	September 29, 2012			October 1, 2011
Balance at the beginning of the year		52,095,166			55,711,325
Repurchases		(1,073,863	)		(3,924,910	)
Stock option and ESPP issuances		176,274			453,728
Restricted share issuances		236,576			214,324
Restricted share forfeitures		(113,640	)		(14,013	)
Shares withheld for tax obligations		(68,129	)		(51,944	)
Balance at the end of the period		51,252,384			52,388,510

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Equity-Based Compensation (Weighted-Average Assumptions Used for Grants of Stock Options and Sars) (Detail) (USD $)	9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011
Expected dividend yield	0.00%	0.00%
Forfeiture rate	10.21%	11.50%
Volatility	35.90%	35.33%
Risk free interest rate	0.94%	2.01%
Risk free interest rate - range of interest rates, minimum	0.07%	0.01%
Risk free interest rate - range of interest rates, maximum	1.95%	3.18%
Expected weighted-average life, in years	5 years 5 months 23 days	5 years 5 months 1 day
Fair value of options and SARs granted	$ 5,507,000	$ 5,495,000
Weighted-average grant date fair value of options and SARs granted	$ 12.84	$ 14.29

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Equity-Based Compensation (Summary of Outstanding and Exercisable Sars Options) (Detail) (USD $)	9 Months Ended
	Sep. 29, 2012
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of Shares, Outstanding	1,578,416
Number of Shares, Exercisable	1,572,730
Aggregate intrinsic value, Outstanding	$ 1,744,000
Aggregate intrinsic value, Exercisable	1,643,000
Weighted-average remaining contractual term, Outstanding	3 years 8 months 12 days
Weighted-average remaining contractual term, Exercisable	3 years 8 months 12 days
Stock Option And Stock Appreciation Rights (SARs) [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of Shares, Outstanding	1,614,393
Number of Shares, Exercisable	553,996
Aggregate intrinsic value, Outstanding	10,972,000
Aggregate intrinsic value, Exercisable	$ 6,257,000
Weighted-average remaining contractual term, Outstanding	8 years 1 month 6 days
Weighted-average remaining contractual term, Exercisable	7 years 4 months 24 days
$ 19.56-$19.56 [Member] | Stock Option And Stock Appreciation Rights (SARs) [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 19.56
Range of Exercise Prices, Maximum	$ 19.56
Number of Shares, Outstanding	368,856
Weighted-Average Remaining Contractual Life, Outstanding (years)	6 years 7 months 6 days
Weighted-Average Exercise Price, Outstanding	$ 19.56
Number of Shares, Exercisable	256,826
Weighted-Average Exercise Price, Exercisable	$ 19.56
$ 21.83-$27.50 [Member] | Stock Option And Stock Appreciation Rights (SARs) [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 21.83
Range of Exercise Prices, Maximum	$ 27.50
Number of Shares, Outstanding	56,764
Weighted-Average Remaining Contractual Life, Outstanding (years)	7 years 1 month 6 days
Weighted-Average Exercise Price, Outstanding	$ 24.82
Number of Shares, Exercisable	46,761
Weighted-Average Exercise Price, Exercisable	$ 24.64
$ 27.82-$27.82 [Member] | Stock Option And Stock Appreciation Rights (SARs) [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 27.82
Range of Exercise Prices, Maximum	$ 27.82
Number of Shares, Outstanding	400,461
Weighted-Average Remaining Contractual Life, Outstanding (years)	7 years 7 months 6 days
Weighted-Average Exercise Price, Outstanding	$ 27.82
Number of Shares, Exercisable	127,518
Weighted-Average Exercise Price, Exercisable	$ 27.82
$ 28.33-$37.15 [Member] | Stock Option And Stock Appreciation Rights (SARs) [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 28.33
Range of Exercise Prices, Maximum	$ 37.15
Number of Shares, Outstanding	61,725
Weighted-Average Remaining Contractual Life, Outstanding (years)	9 years 7 days
Weighted-Average Exercise Price, Outstanding	$ 33.37
Number of Shares, Exercisable	25,976
Weighted-Average Exercise Price, Exercisable	$ 34.82
$ 38.79-$42.36 [Member] | Stock Option And Stock Appreciation Rights (SARs) [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 38.79
Range of Exercise Prices, Maximum	$ 42.36
Number of Shares, Outstanding	726,587
Weighted-Average Remaining Contractual Life, Outstanding (years)	9 years 1 month 13 days
Weighted-Average Exercise Price, Outstanding	$ 40.09
Number of Shares, Exercisable	96,915
Weighted-Average Exercise Price, Exercisable	$ 41.69
$ 1.29-$36.49 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 1.29
Range of Exercise Prices, Maximum	$ 36.49
Number of Shares, Outstanding	422,223
Weighted-Average Remaining Contractual Life, Outstanding (years)	4 years 9 months 11 days
Weighted-Average Exercise Price, Outstanding	$ 32.84
Number of Shares, Exercisable	416,537
Weighted-Average Exercise Price, Exercisable	$ 33.02
$ 36.80-$41.25 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 36.80
Range of Exercise Prices, Maximum	$ 41.25
Number of Shares, Outstanding	378,221
Weighted-Average Remaining Contractual Life, Outstanding (years)	4 years 6 months 22 days
Weighted-Average Exercise Price, Outstanding	$ 39.78
Number of Shares, Exercisable	378,221
Weighted-Average Exercise Price, Exercisable	$ 39.78
$ 42.28-$45.62 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 42.28
Range of Exercise Prices, Maximum	$ 45.62
Number of Shares, Outstanding	401,316
Weighted-Average Remaining Contractual Life, Outstanding (years)	2 years 11 months 27 days
Weighted-Average Exercise Price, Outstanding	$ 44.51
Number of Shares, Exercisable	401,316
Weighted-Average Exercise Price, Exercisable	$ 44.51
$ 46.18-$51.62 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 46.18
Range of Exercise Prices, Maximum	$ 51.62
Number of Shares, Outstanding	374,856
Weighted-Average Remaining Contractual Life, Outstanding (years)	2 years 2 months 12 days
Weighted-Average Exercise Price, Outstanding	$ 48.63
Number of Shares, Exercisable	374,856
Weighted-Average Exercise Price, Exercisable	$ 48.63
$ 53.92-$53.92 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 53.92
Range of Exercise Prices, Maximum	$ 53.92
Number of Shares, Outstanding	1,800
Weighted-Average Remaining Contractual Life, Outstanding (years)	1 year 7 months 28 days
Weighted-Average Exercise Price, Outstanding	$ 53.92
Number of Shares, Exercisable	1,800
Weighted-Average Exercise Price, Exercisable	$ 53.92

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Equity-Based Compensation (Compensation Expense And Related Tax Benefit For Equity-Based Payments) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011	Sep. 29, 2012	Oct. 01, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation	$ 3,440	$ 3,098	$ 11,485	$ 10,048
Income tax benefit	1,217	1,069	4,003	3,467
Cost of Sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation	287	218	820	755
Selling and Marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation	511	333	1,271	1,107
Research and Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation	374	343	1,196	1,037
General and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation	$ 2,268	$ 2,204	$ 8,198	$ 7,149

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Equity-Based Compensation (Tables)

9 Months Ended

Sep. 29, 2012

Compensation Expense And Related Tax Benefit For Equity-Based Payments

	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
Cost of sales	$	287	$	218	$	820	$	755
Selling and marketing		511		333		1,271		1,107
Research and development		374		343		1,196		1,037
General and administrative		2,268		2,204		8,198		7,149
Total compensation	$	3,440	$	3,098	$	11,485	$	10,048
Income tax benefit	$	1,217	$	1,069	$	4,003	$	3,467

Weighted-Average Assumptions Used For Grants Of Stock Options And SARs

	Nine Months Ended
	September 29, 2012			October 1, 2011
Expected dividend yield		0	%		0	%
Forfeiture rate		10.21	%		11.50	%
Volatility		35.90	%		35.33	%
Risk free interest rate		.94	%		2.01	%
Range of interest rates		0.07% - 1.95	%		0.01% - 3.18	%
Expected weighted-average life		5.48 years			5.42 years
Fair value of stock appreciation rights (SARs) granted	$	5,507,000		$	5,495,000
Weighted-average grant date fair value of SARs granted	$	12.84		$	14.29

Summary of SAR Activity

	Nine Months Ended September 29, 2012
SARs	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		1,287,724		$	28.91
Granted		428,987			38.51
Exercised		(64,582	)		23.05
Forfeited		(35,725	)		34.30
Expired		(2,011)			41.57
Outstanding at end of period		1,614,393		$	31.56
Exercisable at end of period		553,996		$	26.48
Intrinsic value of exercised SARs	$	953,020

Summary Of Outstanding And Exercisable Options

The following table summarizes information about stock options outstanding at September 29, 2012:

	Outstanding						Exercisable
Range of Exercise Prices	Number of Shares		Weighted-Average Remaining Contractual Life		Weighted-Average Exercise Price		Number of Shares		Weighted-Average Exercise Price
$ 1.29-$36.49		422,223		4.78 years	$	32.84		416,537	$	33.02
$ 36.80-$41.25		378,221		4.56 years		39.78		378,221		39.78
$ 42.28-$45.62		401,316		2.99 years		44.51		401,316		44.51
$ 46.18-$51.62		374,856		2.20 years		48.63		374,856		48.63
$ 53.92-$53.92		1,800		1.66 years		53.92		1,800		53.92
		1,578,416						1,572,730

	Outstanding		Exercisable
Aggregate intrinsic value	$	1,744,000	$1,643,000
Weighted-average remaining contractual term		3.7 years	3.7 years

Summary Of Stock Option Activity

	Nine Months Ended September 29, 2012
Options	Shares			Weighted-Average Exercise Price
Outstanding at beginning of year		1,702,650		$	40.43
Granted		0			0.00
Exercised		(102,230	)		27.26
Forfeited		(1,663	)		36.36
Expired		(20,341	)		43.63
Outstanding at end of period		1,578,416		$	41.24
Exercisable at end of period		1,572,730		$	41.32
Intrinsic value of exercised options	$	1,090,858

Summary Of Restricted Stock Award Activity

	Nine Months Ended September 29, 2012
Restricted Stock Awards	Shares			Weighted-Average Grant Date Fair Value
Outstanding at beginning of year		836,141		$	28.34
Granted		235,889			38.53
Released		(226,978	)		20.93
Forfeited		(113,640	)		23.26
Outstanding at end of period		731,412		$	34.72

Summary Of Awards Granted Under Equity-Based Compensation Plans

	As of September 29, 2012
Awards granted under Zebra’s equity based compensation plans:
Unearned compensation costs related to awards granted	$	21,978,000
Period expected to be recognized over		2.6 years

Weighted-Average Assumptions Used For Employee Purchase Rights Granted Under Stock Purchase Plan

	Nine Months Ended
	September 29, 2012			October 1, 2011
Fair market value	$	34.93		$	35.86
Option price	$	33.18		$	34.07
Expected dividend yield		0	%		0	%
Expected volatility		21	%		32	%
Risk free interest rate		0.06	%		0.09	%

Stock Appreciation Rights (SARs) [Member]

Summary Of Outstanding And Exercisable Options

The following table summarizes information about SARs outstanding at September 29, 2012:

	Outstanding						Exercisable
Range of Exercise Prices	Number of Shares		Weighted-Average Remaining Contractual Life		Weighted-Average Exercise Price		Number of Shares		Weighted-Average Exercise Price
$ 19.56-$19.56		368,856		6.60 years	$	19.56		256,826	$	19.56
$ 21.83-$27.50		56,764		7.10 years		24.82		46,761		24.64
$ 27.82-$27.82		400,461		7.60 years		27.82		127,518		27.82
$ 28.33-$37.15		61,725		9.02 years		33.37		25,976		34.82
$ 38.79-$42.36		726,587		9.12 years		40.09		96,915		41.69
		1,614,393						553,996

	Outstanding		Exercisable
Aggregate intrinsic value	$	10,972,000	$6,257,000
Weighted-average remaining contractual term		8.1 years	7.4 years

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Derivative Instruments (Financial Information Related To Hedging Of Net Assets Included In Consolidated Statement Of Earnings) (Detail) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2012 USD ($)	Oct. 01, 2011 USD ($)	Sep. 29, 2012 USD ($)	Oct. 01, 2011 USD ($)	Dec. 31, 2011 USD ($)	Sep. 29, 2012 Pound/US Dollar [Member] USD ($)	Dec. 31, 2011 Pound/US Dollar [Member] USD ($)	Sep. 29, 2012 Euro/US Dollar [Member] EUR (€)	Dec. 31, 2011 Euro/US Dollar [Member] EUR (€)
Derivative [Line Items]
Change in gains (losses) from foreign exchange derivatives	$ (1,649)	$ 3,108	$ (208)	$ (3,155)
Gains (losses) on net foreign currency assets	1,135	(3,281)	(728)	1,855
Foreign exchange loss	(514)	(173)	(936)	(1,300)
Notional balance of outstanding contracts						3,412	6,016	36,640	36,684
Net fair value of outstanding contracts	$ (17)		$ (17)		$ (54)

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New Accounting Pronouncements

9 Months Ended

Sep. 29, 2012

New Accounting Pronouncements

Note 16 – New Accounting Pronouncements

In June 2011, the FASB issued update 2011-05, ASC 220, Comprehensive Income: Presentation of Comprehensive Income and in December 2011, the FASB issued update 2011-12, ASC 220, Comprehensive Income: Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU No. 2011-12 is to defer only those changes in ASU No. 2011-05 that relate to the presentation of reclassification adjustments, while the Board is re-deliberating; entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. This standard is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard moved the Other Comprehensive Income statement disclosure from our footnote to its own financial statement for our 10-Q filings in 2012.

In September 2011, the FASB issued update 2011-08, ASC 350, Intangibles Goodwill and Other: Testing Goodwill for Impairment. This updated guidance simplifies how companies test goodwill for impairment. Essentially, companies are no longer required to calculate the fair value of a reporting unit unless the entity determines that it is more-likely-than-not that its fair value is less than its carrying amount using a qualitative assessment. This standard is effective for fiscal years beginning after December 15, 2011. The adoption of this standard did not have any effect upon our consolidated financial statements.

In July 2012, the FASB issued update 2012-03, ASC 350, Intangibles Goodwill and Other: Testing Indefinite-Lived Intangible Assets for Impairment. This updated guidance provides entities with the option to make qualitative assessments about the likelihood that an indefinite-lived intangible asset is impaired to determine whether it should perform a quantitative impairment test. This standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. This standard will not have a material effect on our consolidated financial statements.

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Accounts Receivable (Tables)

9 Months Ended

Sep. 29, 2012

Components Of Accounts Receivable

	As of
	September 29, 2012			December 31, 2011
Accounts receivable, gross	$	166,242		$	156,790
Accounts receivable reserves		(1,082	)		(1,560	)
Accounts receivable, net	$	165,160		$	155,230

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Cost Associated With Exit And Restructuring Activities (Summary Of Exit And Restructuring Costs Incurred) (Detail) (Zes [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Oct. 01, 2011	Oct. 01, 2011
Zes [Member]
Restructuring Cost and Reserve [Line Items]
Severance, stay bonuses, and other employee-related expenses	$ 100	$ 1,171
Professional services	38	885
Relocation and transition costs	0	34
Other exit costs	0	0
Total	$ 138	$ 2,090

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Fair Value Measurements (Summary Of Short-Term And Long-Term Investments) (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2012	Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	$ 315,986	$ 291,073
Gross Unrealized Gains	1,105	641
Gross Unrealized Losses	(549)	(1,437)
Estimated Fair Value	316,542	290,277
US Government Corporations And Agencies Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	93,286	50,738
Gross Unrealized Gains	90	115
Gross Unrealized Losses	0	(6)
Estimated Fair Value	93,376	50,847
Obligations Of Government Sponsored Enterprises [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	5,037	16,581
Gross Unrealized Gains	11	32
Gross Unrealized Losses	0	(1)
Estimated Fair Value	5,048	16,612
State And Municipal Bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	100,836	142,586
Gross Unrealized Gains	202	330
Gross Unrealized Losses	(14)	(43)
Estimated Fair Value	101,024	142,873
Corporate Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	116,791	81,132
Gross Unrealized Gains	802	164
Gross Unrealized Losses	(535)	(1,387)
Estimated Fair Value	117,058	79,909
Other Investments [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Amortized Cost	36	36
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	$ 36	$ 36

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011
Cash flows from operating activities:
Net income	$ 87,914	$ 139,599
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	18,906	17,985
Equity-based compensation	11,485	11,060
Asset impairment charge	9,114	0
Impairment of investments	0	326
Excess tax benefit from equity-based compensation	(1,492)	(1,265)
Loss on sale of property and equipment	178	53
Gain on sale of business	(613)	(66,753)
Deferred income taxes	2,755	5,703
Changes in assets and liabilities:
Accounts receivable, net	(6,108)	(10,112)
Inventories, net	11,981	(6,635)
Other assets	12,070	(10,150)
Accounts payable	(10,843)	(8,493)
Accrued liabilities	(11,341)	(14,917)
Deferred revenue	2,644	(16,707)
Income taxes	14,711	(7,087)
Other operating activities	(6,378)	2,116
Net cash provided by operating activities	134,983	34,723
Cash flows from investing activities:
Purchases of property and equipment	(17,140)	(17,829)
Proceeds from the sale of business	27,580	161,206
Acquisition of business, net of cash acquired	(59,874)	0
Acquisition of intangible assets	(3,000)	(200)
Purchase of long-term equity investment	(5,000)	0
Purchases of investments and marketable securities	(483,349)	(791,811)
Maturities of investments and marketable securities	324,139	493,649
Proceeds from sales of investments and marketable securities	133,863	253,377
Net cash provided by (used in) investing activities	(82,781)	98,392
Cash flows from financing activities:
Purchase of treasury stock	(39,697)	(146,373)
Proceeds from exercise of stock options and stock purchase plan purchases	1,909	9,197
Excess tax benefit from equity-based compensation	1,492	1,265
Net cash used in financing activities	(36,296)	(135,911)
Effect of exchange rate changes on cash	(71)	(899)
Net increase in cash and cash equivalents	15,835	(3,695)
Cash balance of discontinued operations at beginning of period	0	1,301
Less: Cash balance of discontinued operations at end of period	0	0
Cash and cash equivalents at beginning of period	36,418	46,175
Cash and cash equivalents at end of period	52,253	43,781
Supplemental disclosures of cash flow information:
Income taxes paid	$ 16,773	$ 53,512

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Inventories

9 Months Ended

Sep. 29, 2012

Inventories

Note 5 – Inventories

The components of inventories are as follows (in thousands):

	As of
	September 29, 2012			December 31, 2011
Raw material	$	38,397		$	45,795
Work in process		597			872
Deferred costs of long-term contracts		547			220
Finished goods		98,196			101,111
Inventories, gross		137,737			147,998
Inventory reserves		(14,822	)		(14,710	)
Inventories, net	$	122,915		$	133,288

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Stockholders' Equity - Narrative (Detail) (USD $)	9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011
Stockholders Equity [Line Items]
Shares of common stock purchased under share repurchase plan, shares	1,073,863	3,924,910
Shares of common stock purchased under share repurchase plan, value	$ 39,697,000	$ 146,373,000

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Equity-Based Compensation (Weighted-Average Assumptions Used For Employee Purchase Rights Granted Under Stock Purchase Plan) (Detail) (USD $)	9 Months Ended
	Sep. 29, 2012	Oct. 01, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	0.00%	0.00%
Expected volatility	35.90%	35.33%
Risk free interest rate	0.94%	2.01%
Stock Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair market value	34.93	35.86
Option price	33.18	34.07
Expected dividend yield	0.00%	0.00%
Expected volatility	21.00%	32.00%
Risk free interest rate	0.06%	0.09%

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Inventories (Tables)

9 Months Ended

Sep. 29, 2012

Components Of Inventories

The components of inventories are as follows (in thousands):

	As of
	September 29, 2012			December 31, 2011
Raw material	$	38,397		$	45,795
Work in process		597			872
Deferred costs of long-term contracts		547			220
Finished goods		98,196			101,111
Inventories, gross		137,737			147,998
Inventory reserves		(14,822	)		(14,710	)
Inventories, net	$	122,915		$	133,288

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Discontinued Operations (Narrative) (Detail)	3 Months Ended			9 Months Ended			1 Months Ended	3 Months Ended		1 Months Ended
	Sep. 29, 2012 USD ($)	Oct. 01, 2011 USD ($)	Aug. 03, 2011	Sep. 29, 2012 USD ($)	Oct. 01, 2011 USD ($)	Dec. 31, 2011 USD ($)	Mar. 18, 2011 Navis, LLC [Member] USD ($)	Mar. 31, 2012 Navis, LLC [Member] USD ($)	Sep. 29, 2012 Navis, LLC [Member] USD ($)	Aug. 03, 2011 Proveo Ag [Member] USD ($)	Jun. 30, 2012 Proveo Ag [Member] EUR (€)	Aug. 03, 2011 Proveo Ag [Member] EUR (€)
Proceeds from the sale of business				$ 27,580,000	$ 161,206,000		$ 188,588,000
Receivable from previously escrowed funds								13,790,000
Short term receivable from buyer	0			0		27,580,000			13,790,000
Gain (loss) recorded upon divestiture	0	(1,248,000)		613,000	66,753,000					1,248,000
Loan agreed to provide to the buyer											526,058	1,000,000
Loan, duration (date)			Aug. 03, 2012	Dec. 31, 2012
Loan, interest rate											6.50%	6.50%
Tax benefits realized	$ 0	$ (13,308,000)		$ 0	$ 11,773,000					$ 13,308,000

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Business Combinations (Tables)

9 Months Ended

Sep. 29, 2012

Summary Of Estimated Fair Value Of Assets And Liabilities

The following table (in thousands) summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition:

	As of
	July 13, 2012
Current assets	$	6,614
Property and equipment		46
Other assets		17
Goodwill		24,756
Other intangibles		29,560
Total assets acquired	$	60,993
Current liabilities		1,119
Net assets acquired	$	59,874

Summary of Intangible Assets

of $24,756,000. The intangible assets of $29,560,000 consist of the following (in thousands):

	Amount		Useful life
Current technology	$	6,260	5 years
Patents and patent rights		4,580	7 years
Customer relationships		18,720	5 to 9 years
Acquired other intangibles	$	29,560

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Other Comprehensive Income

9 Months Ended

Sep. 29, 2012

Other Comprehensive Income

Note 15 – Other Comprehensive Income

Stockholders’ equity includes certain items classified as accumulated other comprehensive income, including:

• Unrealized gains (losses) on hedging transactions relate to derivative instruments used to hedge the currency exchange rates for forecasted euro sales. These hedges are designated as cash flow hedges, and we have deferred income statement recognition of gains and losses until the hedged transaction occurs. See Note 8 Derivative Instruments for more details.

• Unrealized gains (losses) on investments are deferred from income statement recognition until the gains or losses are realized.

• Foreign currency translation adjustment relates to our non-U.S. subsidiary companies that have designated a functional currency other than the U.S. dollar. We are required to translate the subsidiary functional currency financial statements to dollars using a combination of historical, period-end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of other comprehensive income.

The significant components of other comprehensive income gross and net of income tax are as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 29, 2012			October 1, 2011			September 29, 2012			October 1, 2011
Unrealized gains (losses) on hedging transactions:
Gross	$	(5,458	)	$	8,617		$	(8,599	)	$	4,164
Income tax (benefit) expense		(1,512	)		3,002			(2,407	)		1,326
Net	$	(3,946	)	$	5,615		$	(6,192	)	$	2,838
Unrealized gains (losses) on investments:
Gross	$	556		$	(989	)	$	1,355		$	(455	)
Income tax (benefit) expense		164			(353	)		438			(152	)
Net	$	392		$	(636	)	$	917		$	(303	)

The significant components of accumulated other comprehensive income (loss) included in the Consolidated Balance Sheets are as follows (in thousands):

	As of
	September 29, 2012			December 31, 2011
Unrealized gains and (losses) on hedging transactions:
Gross	$	(1,244	)	$	7,355
Income tax (benefit) expense		(311	)		2,096
Net		(933	)		5,259
Unrealized gains and (losses) on investments classified as available-for-sale:
Gross		558			(797	)
Income tax (benefit) expense		150			(288	)
Net		408			(509	)
Foreign currency translation adjustments		(8,765	)		(8,963	)
Total accumulated other comprehensive loss	$	(9,290	)	$	(4,213	)