DEBT

The composition of notes payable is as follows as of July 31 (in thousands):



	2019			2018
Senior notes payable in annual principal installments on August 1: $3,083 in each fiscal year 2020 through 2021. Interest is payable semiannually at an annual rate of 3.96%	$	6,167		$	9,250
Less current maturities of notes payable	(3,083		)	(3,083		)
Less unamortized debt issuance costs	$	(32	)	$	(60	)
Noncurrent notes payable	$	3,052		$	6,107

We issued senior promissory notes in November 2010 for $18,500,000. The note agreement provides that the proceeds could be used to fund future principal payments on debt, acquisitions, stock repurchases, capital expenditures and working capital purposes. The note agreement contains restrictions against certain activities, among other things and under various conditions, as well as financial covenants, including a minimum fixed charges coverage ratio and a minimum consolidated debt ratio.

We have a credit agreement with BMO Harris that expires on January 31, 2024. The agreement provides for a $45,000,000 unsecured revolving credit agreement, including a maximum of $10,000,000 for foreign letters of credit. Under the agreement we may select a variable rate based on either BMO Harris’ prime rate or a LIBOR-based rate, plus a margin which varies depending on our debt to earnings ratio, or a fixed rate as agreed between us and BMO Harris. As of July 31, 2019, the variable rates would have been 5.75% for the BMO Harris’ prime-based rate or 3.52% for the LIBOR-based rate.

We borrowed $6,000,000 at a weighted average interest rate of 2.96% under the credit agreement during the third quarter of fiscal year 2018. The amount borrowed was repaid in the fourth quarter of fiscal year 2018. The proceeds from the borrowing were used to make a voluntary contribution to our pension plan. As of July 31, 2019 and 2018, there were no outstanding borrowings under this credit agreement; however, there was a total of $5,973,000 allocated for guarantees required by one of our insurance policies and state environmental regulations.

The credit agreement contains restrictive covenants that, among other things and under various conditions, limit our ability to incur additional indebtedness or to dispose of assets. The agreement also requires us to maintain a minimum fixed coverage ratio, a minimum consolidated net worth and a minimum consolidated debt ratio. Our debt agreements also contain provisions such that if we default on one debt agreement, the others will automatically default. If we default on any guaranteed debt with a balance greater than $1,000,000, our unsecured revolving credit agreement with BMO Harris will be considered in default. If we default on any debt with a balance greater than $5,000,000 we will also be considered in default with the senior promissory notes. We were in compliance with all restrictive covenants and limitations as of July 31, 2019.

The following is a schedule by fiscal year of future principal maturities of notes payable as of July 31, 2019 (in thousands):



2020	$	3,083
2021	3,084
Total	$	6,167