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NOTES PAYABLE TO BANKS
 6 Months Ended
Jun. 30, 2023
NOTES PAYABLE TO BANKS  
NOTES PAYABLE TO BANKS

14.  NOTES PAYABLE TO BANKS

During the fourth quarter of 2021, the Company entered into a revolving credit agreement with Truist Bank which provides a credit facility of $20.0 million. The facility includes (i) a $5.0 million sublimit for swingline loans, (ii) a $2.5 million aggregate sublimit for all letters of credit, and (iii) a committed accordion which can increase the aggregate commitments by the greater of $35.0 million and consolidated EBITDA over the most recently completed twelve month period at the time of incurrence. The facility is secured by a first priority security interest in and lien on substantially all personal property of MPC and the guarantors including, without limitation, certain assets owned by the borrower or any guarantor. The facility will terminate on November 12, 2026.

Revolving borrowings under the facility accrued interest at a rate equal to one-month LIBOR plus the applicable percentage, as defined. On May 18, 2023 the Company was notified by Truist Bank that the Term Secured Overnight Financing Rate (SOFR) will replace LIBOR for all borrowings under the facility effective July 1, 2023. The new applicable percentage will be between 150 and 250 basis points for all loans based on MPC’s net leverage ratio plus a SOFR adjustment of 11.45 basis points. In addition, the Company pays facility fees under the agreement ranging from 25 to 45 basis points, based on MPC’s net leverage ratio, on the unused revolving commitment.

The credit agreement contains certain financial covenants including: (i) a maximum consolidated leverage ratio of 2.50:1.00 and (ii) a minimum consolidated fixed charge coverage ratio of 1.25:1.00 both determined as of the end of each fiscal quarter. Additionally, the agreement contains customary covenants including affirmative and negative covenants and events of default (each with customary exceptions, thresholds and exclusions). As of June 30, 2023, the Company was in compliance with all covenants.

The Company has incurred total loan origination fees and other debt related costs associated with this revolving credit facility in the aggregate of $195,000. These costs are being amortized to interest expense over the remaining term of the loan, and the remaining net balance is classified as part of Other assets in the accompanying Consolidated Balance Sheets. MPC had no outstanding borrowings under the revolving credit facility as of June 30, 2023 and December 31, 2022.

Interest expense incurred, which includes facility fees on the unused portion of the revolving credit facility and the amortization of loan costs, on the credit facility was $22,000 for the three months ended June 30, 2023 and $22,000 for the three months ended June 30, 2022; and interest expense incurred was $45,000 for the six months ended June 30, 2023 and $45,000 for the six months ended June 30, 2022. There was no interest expense paid on the credit facility for the three months ended June 30, 2023 and $7,000 for the three months ended June 30, 2022. Interest expense paid on the credit facility was $38,000 for the six months ended June 30, 2023 and $32,000 for the six months ended June 30, 2022.