Note 13.Commitments and Contingencies

Long-Term Contractual Obligations

As of October 31, 2016, aggregate annual required payments over the remaining fiscal year, the next four years and thereafter under our contractual obligations that have long-term components are as follows:


	Nine Months		Year Ending July 31,
	Ending July 31,		(Amounts in thousands)
	2017		2018		2019		2020		2021		Thereafter		Total
Maturity of the credit facility	$	—	$	—	$	161,000	$	—	$	—	$	—	$	161,000
Expected interest payments under the credit facility (1)		2,427		3,236		1,888		—		—		—		7,551
Minimum commitments under noncancelable operating leases		4,753		5,460		4,379		3,064		2,181		3,454		23,291
Compensation agreements		6,040		2,882		691		498		377		583		11,071
Assumed contingent liability (2)		19		93		188		246		280		439		1,265
Contingent guaranteed obligation (3)		122		123		112		—		—		—		357
Other long-term obligations		205		214		96		12		3		—		530
Total contractual obligations	$	13,566	$	12,008	$	168,354	$	3,820	$	2,841	$	4,476	$	205,065

(1)

The expected interest payments under our credit facility reflect an interest rate of 2.01%, which was our weighted average interest rate on outstanding borrowings at October 31, 2016.

(2)

These future potential payments of an assumed contingent liability relate to the Jet Prep Acquisition, as further described in Note 7 to the Condensed Consolidated Financial Statements, and are reflected in the October 31, 2016 Condensed Consolidated Balance Sheet at its net present value of $1,138,000 using a discount rate of 2.5%.

(3)

These future potential payments of a contingent guaranteed obligation relate to Cantel Medical (UK), as further described in Note 7 to the Condensed Consolidated Financial Statements, and are reflected in the October 31, 2016 Condensed Consolidated Balance Sheet at its net present value of $349,000 using a discount rate of 10.1%.

Operating Leases

Minimum commitments under operating leases include minimum rental commitments for our leased manufacturing facilities, warehouses, office space and equipment.

Compensation Agreements

We have previously entered into various severance contracts with executives of the Company, including our corporate executive officers and certain of our subsidiary Presidents, which define certain compensation arrangements relating to various employment termination scenarios, and multi-year employment agreements with certain executive officers of businesses we have acquired. Additionally, in March 2016 we entered into a succession plan agreement, due to the planned retirement of our former Chief Executive Officer who was succeeded on July 31, 2016, that requires a total of $4,500,000 in future payments, the majority of which will be paid in fiscal 2017.

Other Long-Term Obligations

In relation to the acquisition of our business in Italy on November 3, 2014, we assumed an $843,000 liability to the central bank of Italy as part of funding provided by an Italian government agency, of which $187,000 and $656,000 were recorded in accrued expenses and other long-term liabilities, respectively. Such amount was a portion of the financial support obtained from the Italian government’s Ministry of Education, Universities and Research to fund research and development activity relating to the business’s automated endoscope reprocessors. The liability is payable in semi-annual installments, bears interest at 0.25% per annum and has a maturity date of January 1, 2019. At October 31, 2016, $408,000 is outstanding, of which $162,000 is recorded in accrued expense and $246,000 is recorded in other long-term liabilities. Additionally, other long-term obligations include deferred compensation arrangements for certain former Medivators directors and officers and is recorded in other long-term liabilities.