IOFFCIAL 0 jDMUMNTSI8 Fund Use Agreement by and among the Food and Agriculture Organization, for itself and the Independent Science and Partnership Council, and the Fund Council of the CGIAR Fund (MTO 069018), represented by the International Bank for Reconstruction and Development, and the International Bank for Reconstruction and Development, as Trustee of the CGIAR Fund (MTO 069018) Dated as of January 15, 2012 1 This Fund Use Agreement (the "Agreement") is entered into by and among: - the Food and Agriculture Organization of the United Nations ("FAO"), for itself and the Independent Science and Partnership Council (the "ISPC"), - the Fund Council of the CGIAR Fund (the "Fund Council"), represented by the International Bank for Reconstruction and Development (the "World Bank"), and - the World Bank, as Trustee of the CGIAR Fund (the "Trustee"), (collectively referred to as the "Parties"). Capitalized terms not defined in this Agreement are defined in the Glossary approved by the Fund Council on November 2, 2010 and the Consortium on December 16, 2010 as part of the Common Operational Framework, as may be amended from time to time. WHEREAS, the ISPC is hosted by the FAO. WHEREAS, on February 23, 2010, the Fund Council approved the ISPC's Terms of Reference (the "ISPC TORs") describing the role of the ISPC; WHEREAS, on November 2, 2010, the Fund Council approved its Governance Framework, setting forth the governance terms for the CGIAR Fund; WHEREAS, in December 2010, the CGIAR Fund was established; WHEREAS, on April 7, 2011, the Funders Forum endorsed the Strategy and Results Framework, to be implemented by the Consortium and the Centers; WHEREAS, Fund Donors to the CGIAR Fund and the World Bank as Trustee have entered into Contribution Agreements and Contribution Arrangements for the purpose of contributing funds to the CGIAR Fund; WHEREAS, the Parties are entering into this Agreement to set out certain terms and conditions for the use by the FAO, acting on behalf of the ISPC, of funds from the CGIAR Fund (MTO No. 069018) with respect to periodic work plans and budgets submitted by the ISPC and approved by the Fund Council (each a "WP&B" and a "proposed WP&B" prior to Fund Council approval); NOW THEREFORE, the Parties hereto agree as follows: A. Roles and Responsibilities A.l. The Fund Council is the CGIAR Fund's decision-making body, representing all Fund Donors. As set out in Section 7 of the Governance Framework, the roles and responsibilities of the Fund Council include appointing the Chair and members of the ISPC and approving the ISPC's terms of reference. The Fund Council also allocates System Cost funding to the ISPC from the CGIAR Fund. A.2. The ISPC is the independent standing panel established by the Fund Council to provide independent advice and expertise, including its assessment of CRP proposals submitted by the 2 Consortium, and serves as an intellectual bridge between the Fund Council and the Consortium, as further detailed in the ISPC TORs. A.3. The FAO serves as the host of the ISPC. A.4. The Trustee is the World Bank in its capacity as administrator of the CGIAR Fund as set out in Section 9 of the Governance Framework. B. Proposals and Transfers B. 1. The ISPC shall submit proposed WP&Bs to the Fund Council for Fund Council consideration. Unless otherwise approved by the Fund Council, each proposed WP&B shall set out (i) the ISPC's expected work plan for the period specified therein, (ii) the overall proposed budget for that period, and (iii) the amount of that budget requested as System Costs from Window 1 of the CGIAR Fund. B.2. Fund Council approval of a WP&B will be documented in the approved minutes of the Fund Council meeting. Following approval, the WP&B and related minutes will be incorporated by reference into this Agreement. B.3. Upon receipt from the Fund Office of the approved minutes evidencing Fund Council approval of a WP&B, the Trustee shall record an amount equal to the System Costs from Window I approved for that WP&B ("ISPC WI Funding") as an amount to be transferred and shall inform the FAO and ISPC that such ISPC WI Funding will be made available for transfer to the FAO for receipt on behalf of the ISPC as of the first day of the period for which that WP&B has been approved . B.4. The FAO, acting on behalf of the ISPC, shall submit a cash transfer request to the Trustee for such ISPC WI Funding substantially in the form attached as Annex 1 or in a form otherwise acceptable to the Trustee and FAO (a "Cash Transfer Request"). B.5. Following receipt of a duly completed Cash Transfer Request, but in no event prior to the first day of the period for which a WP&B has been approved, the Trustee shall transfer the ISPC W1 Funding for that WP&B to the FAO for receipt on behalf of the ISPC in accordance with this Agreement and in a manner agreed between the Trustee and the FAO. B.6. The Trustee shall transfer such ISPC W1 Funding amount to the account indicated in the Cash Transfer Request. B.7. The FAO shall receive any funds provided under this Agreement for the benefit of the ISPC and make them available to the ISPC for the purposes of the WP&B for which those funds were provided. The FAO's applicable policies and procedures shall apply to the use of such funds. The FAO, acting on behalf of the ISPC, may use any ISPC W1 Funding hereunder in accordance with (i) the relevant WP&B and (ii) this Agreement, including Annex 2 (Use of Funds) attached hereto. B.8. Following transfer by the Trustee of ISPC WI Funding to the FAO, (i) the FAO, on behalf of the ISPC, shall have full fiduciary responsibility to the Fund Donors and the Fund Council for the handling and use of such funds in accordance with the terms of this Agreement, and (ii) the World Bank will have no responsibility in any capacity to the Fund Donors, the Fund Council or otherwise for the FAO's or ISPC's handling or use of such funds. 3 B.9. The Parties acknowledge and agree that neither the Trustee nor the Fund Office, nor any part of the World Bank, has responsibility for (i) confirming the use of ISPC W1 Funding; (ii) implementing, monitoring, supervising, evaluating, or providing quality assurance for ISPC W1 Funding; (iii) providing Fund Donors with financial, progress, results or impact reporting for ISPC WI Funding; or (iv) any misuse or misprocurement by any entity other than the World Bank with respect to ISPC WI Funding. The Parties further acknowledge and agree that the Trustee shall have no responsibility for reviewing the appropriateness of any decision by the Fund Council and shall at all times be entitled to rely thereon. B.10. Notwithstanding any other statement herein, any requirement or obligation on the part of the Trustee to transfer ISPC W1 Funding under this Agreement shall at all times be qualified by and subject to the availability of funds in Window I that are not otherwise allocated. B.11. For clarity, the ISPC has submitted its proposed WP&B for 2011 to the Fund Council. The Fund Council approved this WP&B on a no objection basis on October 28, 2010, and subsequently approved an amendment requested by the ISPC on a no objection basis on February 23, 2011 for ISPC WI Funding totaling US$ 2,175,000. The terms of this Agreement apply to this WP&B, as amended, and the ISPC WI Funding to be provided to the FAO on behalf of the ISPC for such WP&B. C. Remedies; Termination; Dispute Resolution C. 1. Without prejudice to Section D.3, any enforcement of Fund Donor or Fund Council remedies or pursuit of Fund Donor or Fund Council rights or interests with respect to ISPC W1 Funding shall arise directly between the Fund Council, acting through a Fund Donor specifically designated by the Fund Council for any particular case to act on its behalf for that purpose, and the FAO, acting on behalf of the ISPC, and be undertaken to the extent approved by the Fund Council, without requiring involvement of the Trustee, the World Bank or individual Fund Donors, except as otherwise specified in this Agreement; provided that in the event a Fund Donor wishes to enforce a remedy or pursue a right that is not approved by the Fund Council, and such Fund Donor has a statutory, regulatory or policy environment requiring such Fund Donor's ability to act unilaterally, such Fund Donor may enforce such remedy or pursue such right on its own behalf in accordance with the terms of this Agreement. C.2. Subject to Section C.1 and without prejudice to Section D.3, the FAO acknowledges and agrees that the Fund Donors shall each have the rights accruing to each Fund Donor or the Fund Council, as the case may be, in this Agreement with the ability to seek direct recourse against the FAO (including in its capacity as host of the ISPC) at any time for any enforcement or breach thereof. The FAO agrees that the Fund Donors may collectively through the Fund Council or individually, as the case may be, seek direct reasonable enforcement or recourse with respect to any unmet or breached obligations, including but not limited to the use of ISPC WI Funding. C.3. If the Fund Council determines, after consultation with the ISPC and the FAO that any ISPC W1 Funding have been used in a manner inconsistent with this Agreement, the FAO shall refund such amount to the Trustee for deposit into Window I or pro rata distribution to Fund Donors under their respective Contribution Agreements or Arrangements. C.4. Following completion of each WP&B period, allowing for a three month period to complete expenditures for commitments made during the WP&B period, the FAO shall promptly return to the Trustee for deposit into Window I any ISPC WI Funding that remain unexpended or uncommitted with respect to the WP&B for that period. 4 C.5. This Agreement may be terminated by either the Fund Council or the FAO upon 180 days prior written notice. Additionally, in the event the Trustee exercises its right of suspension and/or termination under the Contribution Agreements and Arrangements, the Trustee shall consult with the Fund Council, the FAO and the ISPC to determine the subsequent measures to be taken with respect to the CGIAR Fund (as provided in the Contribution Agreements and Arrangements). In the event of any termination of this Agreement, unless the World Bank, the Fund Council, the FAO and the ISPC agree on another course of action, (i) any agreement entered into prior to the termination between the FAO on behalf of the ISPC and any consultants and/or other third parties will remain in effect and be unaffected by the termination, and (ii) the FAO on behalf of the ISPC will be entitled to continue to use ISPC WI Funding it has previously received in respect of any agreements in (i) above, all to the extent contemplated in the relevant WP&B and necessary to fulfill the FAO's obligations on behalf of the ISPC as if this Agreement had not been terminated. The FAO shall cause all other ISPC WI Funding remaining with the FAO after such termination, along with any investment income thereon, to be returned to the Trustee for deposit into Window 1 or pro rata distribution to Fund Donors under their respective Contribution Agreements or Arrangements. C.6. The Parties agree to make every effort to settle amicably any dispute .that may arise between or amongst them in connection with this Agreement. C.7. If any of the Parties cannot resolve a dispute, then the affected Parties may together agree to request that a qualified, mutually agreed third-party mediator be appointed. This Section shall apply until and except as explicitly modified or superseded by the provisions of one or more chapters setting forth common dispute resolution mechanisms approved as part of the Common Operational Framework. D. General D. 1. The offices responsible for the ISPC, the FAO, the Fund Council, and the World Bank for coordination of all relevant matters related to the implementation of this Agreement, including providing or being provided any notice, taking any action and executing any documents required or permitted pursuant to this Agreement, are, except as may be notified in writing to the other Contacts: For the ISPC (the "ISPC Contact"): ISPC Executive Director Peter Gardiner Executive Director CGIAR Independent Science & Partnership Council c/o FAO, Room C6-26/8, 00153 Rome, Italy Tel: + 39 06 570 52103 Fax: + 39 06 570 53298 For the FAO (the "FAO Contact"): Office of Knowledge Exchange, Research and Extension Food and Agriculture Organization of the United Nations Ms Xiangjun Yao, Director Viale Delle Terme di Caracalla 5 00153 Rome, Italy Tel: + 39 06 570 53579 Fax: + 39 06 570 54047 For the Trustee (the "Trustee Contact"): Director Multilateral Trusteeship and Innovative Financing The World Bank 1818 H Street, NW Washington, DC 20433, U.S.A. Tel: + 1 202 458 0019 Fax: + 1 202 614 0249 Email: MTOTrustee@worldbank.org For the Fund Council (the "Fund Council Contact") Chair of the CGIAR Fund Council Vice President, Sustainable Development Network The World Bank 1818 H Street, NW Washington, DC 20433, U.S.A. Tel: + 1 202 458 7405 Fax: + 1 202 522 7122 with a copy to: Executive Secretary, CGIAR Fund Council and Head, CGIAR Fund Office The World Bank 1818 H Street, NW Washington, DC 20433, USA Tel: +1 202 473 8918 Fax: +1 202 473 8110 D.2. The offices responsible for each of the Fund Donors for coordination of any relevant matters related to implementation of this Agreement, including providing or being provided any notice, taking any action or executing any documents required and permitted pursuant to this Agreement, are as specified as the "Donor Contact" in the respective Contribution Agreements or Arrangements with the Trustee. D.3. The Parties will each be responsible only for performing their respective functions specifically set forth in this Agreement and will not be subject to any other duties or responsibilities, including, without limitation, any duties or obligations that might otherwise apply to a fiduciary or trustee under general principles of trust or fiduciary law. Nothing in this Agreement will be considered a waiver of any privileges or immunities of the Fund Council members, the Fund Donors, the World Bank, the FAO or the ISPC, or their respective officers or employees, under their respective Articles of Agreement or equivalent documents and any applicable law, all of which are expressly reserved. No delay in exercising, or omission to exercise, any right or remedy under this Agreement shall impair any such right or remedy or be construed to be a waiver thereof. 6 D.4. Any reference herein to applicable policies, procedures, rules regulations and directives on the part of the FAO shall be understood to include any deviations from standard practice that have been in practice between the FAO and the ISPC, as such arrangements may be memorialized in documentation approved by the Fund Council. D.5. The World Bank may disclose this Agreement and related information in accordance with the World Bank's policy on access to and disclosure of information. This provision shall continue in full force and effect following completion of all CGIAR Fund transfers and any termination of this Agreement or the CGIAR Fund. D.6. Wherever this Agreement requires the ISPC or FAO to provide reports or other information to the Fund Council, the Parties agree that this obligation may be fulfilled if the ISPC or FAO provides such report or information to the Fund Office with a specific request that it be distributed to the Fund Council members, including the Trustee. D.7. Notwithstanding the understandings reached in this Agreement, no provision herein shall be construed as creating a joint venture, a legal partnership or international treaty under UN Article 102 among the Parties. D.8. This Agreement may be amended only by written amendment entered into among the Parties. D.9. This Agreement will come into operation on the date of the last duly authorized signature provided below (the "Effective Date"). [remainder of page intentionally left blank] 7 IN WITNESS WHEREOF, the Fund Council represented by the World Bank, the FAO for itself and on behalf of the ISPC, and the World Bank as Trustee have caused this Agreement to be signed in their respective names as of the respective dates indicated. THE FUND COUNCIL, by the Inter a,onal Baf or Reconstruction and Development Hart Schaf& Acting Vice President, Sustainable Development Network Date: INTERNATIONAL BANK F RECONSTRUCTION AND DEVELOPMENT, as Trustee Axel van Trotsenburg Vice President, Con sional Finance and Global Partnerships Date: 1 Z3 /Zoi. FOOD AND AGRI U TURE ORGANIZATION Laurent Thomas Assistant Director-General of the FAO Technical Cooperation Department Date: Ito 4 ? ANNEXES: ANNEX I Form of Cash Transfer Request ANNEX 2 Use of Funds 8 ANNEX 1 CGIAR Fund Date Ref. No. INDEPENDENT SCIENCE AND PARTNERSHIP COUNCIL Cash Transfer Request for ISPC W1 Funding of WP&B For [calendar year/period] (in US dollars) Ctimnlatile Net Cash receiled fron the Amount of Cash Transfer Trustee in ISPC Requested no%% accoint a () 0.01) 0.00 a/ This column represents the cumulative amount sent to FAO less return offunds to the Trustee since the inception of ISPC account. Please arrange for the transfer of the above amount using the following banking instructions: Account Holder: [ __ Account Name: [ Account Number: [ ] Bank Name: 1 Address: 1 [ 1 SWIFT ID: [ Yours sincerely, FOOD AND AGRICULTURE ORGANIZATION [name] [title] Date: 9 ANNEX 2 USE OF FUNDS References in this Annex 2 to "FAO" are understood to be in the context of the FAO acting as the host and on behalf of the ISPC. A. Restrictions on Use of Funds 1. General Restrictions on Use of Funds 1.1. The FAO shall use ISPC W1 Funding with due regard to economy and efficiency and uphold the highest standards of integrity in the administration of such funds, including the prevention of fraud and corruption. 1.2. The FAO may use ISPC WI Funding to retroactively pay for expenditures under a WP&B that were incurred within the six months prior to Fund Council approval of such WP&B, unless otherwise specified in such WP&B. 1.3. Investment income generated by any ISPC W1 Funding shall be used for the same purposes applicable to such funds under this Agreement or returned to the Trustee for deposit in Window I if not needed for such purposes. 1.4. The FAO agrees that ISPC WI Funding shall not be used for payments for which corrupt, fraudulent, collusive, obstructive or coercive practices were engaged in by representatives of the ISPC or FAO. 1.5. Recognizing the obligations of countries that are members of the United Nations under various United Nations Security Council resolutions to take measures to prevent financing of terrorists, the FAO agrees to undertake to use reasonable efforts, consistent with its governing arrangements and policies, including those pertaining to combating financing for terrorists, to ensure that all ISPC W1 Funding is used for its intended purposes and are not diverted to individuals or entities associated with terrorism, as identified in accordance with relevant United Nations Security Council resolutions. In the event the FAO enters into any grants or contracts with the ISPC W1 Funding, they shall each include a provision that any recipient of such funds shall (i) not use such funds for the purpose of any payment to persons or entities, or for the import of goods, if such payment or import, to the recipient's knowledge or belief, is prohibited by a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations, including under United Nations Security Council Resolution 1373 and related resolutions, and (ii) include a corresponding provision in any downstream agreements that the recipient enters into with entities to which the recipient makes such funds available. 1.6. The FAO confirms that, given the activities to be funded by the WP&B, it does not believe that 1SPC WI Funding would be diverted in support of drug trafficking. 1.7. None of the Fund Donors, the Trustee or the Fund Office shall be responsible for the activities of any person or third party engaged by the FAO with ISPC W1 Funding, nor will the Fund Donors, the Trustee or Fund Office be liable for any costs incurred by such recipients in terminating the engagement of any such person. 10 1.8. The FAO agrees to use its best efforts, to the extent allowed by applicable agreements, such as those signed with host governments, and other applicable laws, to ensure that the use of ISPC WI Funding will be free from any taxation or fees imposed under local laws. Fund Donors that are sovereign states shall, to the extent relevant and feasible, seek to assist the FAO in strengthening and adjusting any such applicable agreements to which such Fund Donors are a party. 1.9. None of the Fund Council, any individual Fund Donor, the Trustee or the Fund Office shall be obligated to reimburse the FAO for costs incurred in excess of ISPC WI Funding. The FAO shall not be obligated to continue performance under this Agreement, or otherwise to incur costs in excess of the amounts received under this Agreement, unless and until further ISPC WI Funding has been allocated by the Fund Council and received from the Trustee. 1.10. (a) The FAO may use ISPC W1 Funding for costs incurred that are reasonable, allocable, and allowable, where the following meanings apply: (1) "Reasonable" means those costs that do not exceed those that would ordinarily be incurred by a prudent person in the conduct of normal business. (2) "Allocable" means those costs that are necessary to the WP&B. (3) "Allowable" means those costs that are reasonable and allocable, and that conform to any limitations set forth in the WP&B. (b) For clarity, for purposes of this Agreement and subject to Section 1.10(a), the CGIAR Cost Allocation Guidelines (No. 5) that are part of the Common Operational Framework, which clarify overhead costs that may be considered allowable, apply as part of this Agreement only to the extent consistent with applicable FAO policies and procedures., which otherwise apply. 1.11. The FAO shall maintain books, records, documents, and other evidence in accordance with its respective usual accounting procedures to sufficiently substantiate the use of ISPC W1 Funding. 1.12. The FAO agrees not to discriminate against persons with disabilities in the implementation of activities financed by ISPC W1 Funding and to make every effort to respect the principles of the UN Convention on the Rights of Persons with Disabilities in performing such activities. To that end, and to the extent this goal can be accomplished within the scope of the objectives of WP&Bs, the FAO should demonstrate a comprehensive and consistent approach for including men, women and children with disabilities consistent with such principles, as described in the full text of the UN Convention on the Rights of Persons with Disabilities at the following website: http://www.un.org/disabilities/documents/convention/convoptprot-e.pdf. 2. Procurement 2.1. In the event that the FAO employs consultants or procures services or goods with ISPC WI Funding, the employment and supervision of such consultants and the procurement of such services or goods shall be the responsibility of the FAO and each entity employing or contracting with such consultants or carrying out such procurement and shall be conducted in accordance with the CGIAR Procurement of Goods, Works and Services Guidelines (No. 6) that are part of the Common Operational Framework, which apply as part of this Agreement only to the extent consistent with applicable FAO rules and regulations, which otherwise apply. 11 3. Representations and Undertakings 3.1 The FAO has full power, capacity and authority to enter into this Agreement on behalf of the ISPC and exercise its rights and carry out its obligations hereunder. 3.2 The FAO is an international organization duly authorized to carry out activities. It has a history of financial probity and a record of achievement and has disclosed to the Trustee and the Fund Council any significant aspects to the contrary. 3.3 The FAO maintains financial management systems and prepares financial statements in accordance with consistently applied accounting standards, both in a manner adequate to reflect the operations, resources and expenditures related to the activities funded by ISPC WI Funding. 3.4 The FAO shall promptly inform the Trustee and Fund Council of any information that indicates the need for further scrutiny of the use of such funds (including non-frivolous allegations that ISPC WI Funding have been used for corrupt, fraudulent, collusive, obstructive or coercive practices), it being noted that any such further scrutiny shall take place consistent with Section 4.2 of this Agreement. 3.5 The FAO shall promptly inform the Trustee and the Fund Council of any conditions that interfere or threaten to interfere with any WP&B or with the FAO's obligations under this Agreement (including as they may flow through to downstream recipients of ISPC WI Funding). 4. General 4.1 This Article 4 shall apply until and except as explicitly modified or superseded by the provisions of a harmonized reporting requirements chapter approved as part of the Common Operational Framework, which chapter shall, upon such approval, be incorporated by reference into this Agreement, only to the extent consistent with the applicable FAO rules, regulations and directives, which in both cases (Article 4 and its replacement) otherwise apply. 4.2 The FAO, through the ISPC, shall periodically as agreed with the Fund Council prepare and provide to the Fund Council unaudited financial reports and certified financial reports with respect to WP&Bs in the FAO standard format. These financial reports shall be subject exclusively to the internal and external audit procedures laid down in the financial regulations, rules and directives of FAO. 4.3 The FAO, through the ISPC, shall periodically report to the Fund Council on the ISPC's performance relative to the related WP&B, in form and substance reasonably satisfactory to the Fund Council, as such form and the nature of such substance shall have been previously agreed between the Fund Council and FAO on behalf of the ISPC, it being understood that if the Fund Council is asked to approve a reporting format under this Section 4.3 that is objectionable to the FAO, the FAO shall indicate its objection to the Fund Council. 5. Monitoring and Evaluation 5.1. This Article 5 shall apply until and except as explicitly modified or superseded by the provisions of one or more chapters addressing monitoring and evaluation approved as part of the Common Operational Framework, which chapter or chapters shall, upon approval by the Fund 12 Council and the Consortium as part of the Common Operational Framework, be incorporated by reference into this Agreement, only to the extent consistent with the applicable FAO policies and procedures, which in both cases (Article 5 and its replacement) otherwise apply. 5.2 As set forth in the Governance Framework, the Fund Council shall monitor the implementation of the ISPC's WP&B and the performance of the ISPC. 5.3 The ISPC will additionally be evaluated as part of the independent evaluation of the performance of the whole CGIAR system every six years; to be commissioned by a Reference Group. 13