13. COMMITMENTS AND CONTINGENCIES Guarantees The Company has arranged for a standby letter of credit for $1.5 million to meet the security requirement of its insurance company for potential workers  compensation claims, which is supported by the Company s revolving credit facility. Product Warranty Changes in the Company s product warranty liability for the nine months ended July 31, 2011 and 2010, respectively, are as follows: Nine months ended July 31, 2011 2010 Balances as of beginning of fiscal year $ 1,636,000 $ 1,022,000 Accruals for warranties 1,052,000 1,251,000 Warranty claims settled (722,000 ) (855,000 ) Acquired warranty liabilities   80,000 Balances as of July 31 $ 1,966,000 $ 1,498,000 Additional Contingent Purchase Consideration As part of the agreement to acquire a subsidiary by the ETG in fiscal 2007, the Company may be obligated to pay additional purchase consideration of up to 73 million Canadian dollars in fiscal 2012, which translates to approximately $76 million U.S. dollars based on the July 31, 2011 exchange rate, should the subsidiary meet certain earnings objectives through June 2012. As part of the agreement to acquire a subsidiary by the ETG in fiscal 2009, the Company may be obligated to pay additional purchase consideration of up to approximately $10.1 million in fiscal 2012 should the subsidiary meet certain earnings objectives during the third year following the acquisition. As part of the agreement to acquire a subsidiary by the ETG in fiscal 2009, the Company may be obligated to pay additional purchase consideration of up to approximately $6.4 million in fiscal 2012 should the subsidiary meet certain earnings objectives during the second year following the acquisition. The above referenced additional contingent purchase consideration will be accrued when the earnings objectives are met. Such additional contingent purchase consideration is based on a multiple of earnings above a threshold (subject to a cap in certain cases) and is not contingent upon the former shareholders of the