Related Party Transactions

The Company’s operations included the following related party transactions (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017

Interest paid or payable to related parties (included in interest expense)	$	13,923	$	9,414	$	25,985	$	16,930
Consulting expenses paid to related parties (included in general and administrative expense)	52		50		102		101

As of June 30, 2018 and December 31, 2017, the Company had $108.8 million and $107.0 million, respectively, in debt and convertible notes from investors considered to be related parties.

8% Convertible Promissory Notes

In December 2014, the Company entered into a three year $132.2 million convertible promissory note agreements with certain investors, including $10.0 million each from related parties Alberta Investment Management Corporation, KPCB Holdings, Inc. and New Enterprise Associates. The notes were amended to mature in December 2018. The loans, which bear a fixed interest rate of 8.0%, compounded monthly, are due at maturity or at the election of the investor, with accrued interest due in December of each year which, at the election of the investor, can be paid or accrued. Investors have the right to convert the unpaid principal and accrued interest to Series G convertible preferred stock at any time at the price of $38.64. If an initial public offering occurs prior to the payment in full, the outstanding principal and accrued interest will mandatorily convert into Series G convertible preferred stock. As of June 30, 2018 and December 31, 2017, the Company had $39.9 million and $38.3 million, respectively, in 8% Convertible Promissory Notes from investors considered to be related parties. Upon completion of the initial public offering in July 2018, the 8% Notes converted into 1,038,050 Series G convertible preferred stock and concurrently converted into shares of Series B common stock.

6% Convertible Promissory Notes (Originally 5% Convertible Promissory Notes)

In December 2015, January 2016 and September 2016 the Company entered into six promissory note agreements with related parties Canadian Pension Plan Investment Board (CPPIB), New Enterprise Associates, KPCB Holdings, Inc., J.P. Morgan and one other non-related party. The total value of the promissory notes is $260.0 million and originally bore a 5% fixed interest rate, compounded monthly, and are entirely due at maturity. Due to a reduction of collateral as a result of the issuance of other notes, a 1% interest increase was negotiated changing the interest rate from 5% to 6% effective July 1, 2017.

As of June 30, 2018 and December 31, 2017, the amount outstanding to the related parties was $27.6 million and $26.8 million, respectively, including accrued interest. At the election of the investors, the accrued interest and the unpaid principal can be converted into common stock at any time with no provision for mandatory conversion upon the initial public offering. In certain circumstances, the notes are also redeemable at the Company’s option, in whole or in part, in connection with a Change of Control or at a qualified IPO at a redemption price. In January 2018, the Company amended the terms of the 6% Notes to extend the convertible put option dates to December 2019.

Term Loan due September 2028

In 2013 and 2014, the Company obtained a $45.0 million term loan from related party Alberta Investment Management Corporation ("Alberta") to fund the purchase and installation of Energy Servers related to PPA IIIa due September 2028. The Company repaid $0.3 million and $0.2 million of outstanding debt to Alberta in the three months ended June 30, 2018 and 2017, respectively. The Company repaid $0.6 million and $0.4 million of outstanding debt to Alberta in the six months ended June 30, 2018 and 2017, respectively. Furthermore, the Company paid $0.8 million and of interest to Alberta in the three months ended June 30, 2018 and 2017, respectively, and Company paid $1.6 million and of interest to Alberta in the six months ended June 30, 2018 and 2017, respectively. The balance of the loan as of June 30, 2018 and December 31, 2017 was $41.3 million and $41.9 million, respectively.

Common Stock Warrants

In connection with the 6% Convertible Promissory Notes, the Company agreed to issue common stock warrants to related parties J.P. Morgan and CPPIB for the right to purchase the Company’s common stock up to a maximum of 146,666 shares and 166,222 shares, respectively. During 2017, the fair value of the right to common stock warrants was re-measured and $0.2 million in warrant expenses was charged to the consolidated statement of operations. On August 31, 2017, J.P. Morgan assigned their warrants to CPPIB and all 312,888 warrant shares were issued to CPPIB, and the Company reclassified the $9.4 million of accrued warrant liabilities to additional paid in capital, which is not subject to further remeasurement in the fair value.

Consulting Arrangement

In January 2009, the Company entered into a consulting agreement with General Colin L. Powell, a member of the Company’s board of directors, pursuant to which General Powell performs certain strategic planning and advisory services for the Company. Pursuant to this consulting agreement, General Powell receives compensation of $125,000 per year and reimbursement for reasonable expenses.