One Laptop per Child

1. One Laptop per Child One Laptop per Child Robert Fadel, Finance and Operations Charles Kane, CFO

2. Essential Questions • What is the timeframe to launch? • How do we advance the procurement process? • Who else should OLPC be discussing terms with?

3. Core Principles • Child Ownership • Low Ages • Saturation • Connection • Free and Open Source

4. Objectives • Cooperative • Principles of Distribution • Incorporate Expectations • Keep costs low • Define Deliverables

5. Distribution • One laptop per Child • Scale • No secondary, commercial re-distribution • Global = 3m/3countries/2continents • Prompt Deployment

6. Expectations: Country • Price • Specification • Delivery Schedule • Warranty • Maintenance

7. Expectations: Partners • Irrevocable Letter of Credit, 20% Cash • Agreement is Absolute • Intellectual Property and Patents • Commitment to Scale • Opportunity to Explore Commercial Interests

8. Cost Saving Measures • Cash up-front/Irrevocable Letter of Credit • Delivery Ex-Works Factory • Localized “Warranty” Service • Production Ramp and Schedule • Innovation

9. OLPC IP and Patents • Software is licensed under GNU GPL v2 • Distribute freely • Modifications follow suit • Hardware patents • Defense, cross-licensing, leverage • Limited exclusivity with manufacturers

10. Citibank Partnership • Pro-bono Financial Services • Cut-rate terms • Seeks to reduce the cost of capital • Utilize existing bank relationships • Reduce risk • Leverage established credit

11. Physical Movements Shipped goods from suppliers directly to Quanta. Assume 5 days for Quanta to receive goods. Completed goods shipped to Sov. Governments. Assume 25 to 45 days for Sov. Governments to receive completed goods. Assume 10 days for Quanta to manufacture goods. Time Line (Days) 15 0 5 45 Goods completed and shipped to Sovereign Governments Goods received by Sovereign Governments Goods received by Quanta

12. Timeline • Manufacturers, Partners based in China • Three Month lead time to Manufacturing • Ten days for work in progress • Delivery time from factory to country • Ocean: 25 to 75 days • Air: < 7 days

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14. Structure, Risk Mitigation • Quanta can receive payment on its invoices to Brightstar within 3 days • Quanta receives a net discount on its invoices less the amounts it owes to Brightstar. • Payment to all parties made by Citibank through Brightstar for each production period.

15. Program Flows

16. Program Benefits • Brightstar, Citibank do financing and pack out in spirit of charitable pricing and financing. • Confidentiality on pricing assured throughout. • Component manufacturers receive cash in 2 to 5 days. • Quanta records sale as laptops transition through factory to Brightstar pack out station, where title transfer and sale occurs. • Liquidity is available to all parties, no party is cash deprived. • Citibank provides secured inventory loans to Brightstar.

17. Letter of Credit • Irrevocable • Standard SWIFT, UCP terms • Concise terms and conditions • Leverage existing Citibank, corresponding bank relationships • Transaction terms • Existing lines of credit

18. Structure Risk Mitigation • L/C should be issued on behalf of governments by local Citibank branches (Citibank confirms/guarantees the L/C if issued by another bank). • L/C is advised to OLPC. • OLPC is beneficiary to L/C, gives Citibank a blanket assignment of proceeds. • Funds are paid under the L/C to OLPC Citibank account. • Brightstar and Citibank track payments to each party during each phase of production.