The World Baink N . (202) 477-1234 INTERNATIONAL BAIIH FOR RECONSTRUCTION AND DEVELOPMENT Washington, D.9 20433 Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION Cable Address: INDEVAS infoDev Innovate. Connect. Transform. Octobei 9th, 2012. Mr. Er k Hersman, Chairp--rson, AfriLa:s, PO Bo 58275-00200 Nairobi, Kenya Re: infoDev Giant TFO 12772 East Africc Virtual Incubation Pilot Project Dear Mr. Hersman: In response to the request for financial assistance made on behalf of AfriLabs ("Recipient"), I am pleased :o inform you that the International Bank for Reconstruction and Development ("World Bank"), acting a s. administrator of grant funds provided by the infoDev Multi-Donor Trust Fund, proposes to extend to the Recipient a grant in an amount not to exceed One Hundred Eighty Thousand United States Dollars (U.S.$ 180,000) ("Grant") on the terms ar d conditions set forth or referred to in this letter agreement ("Agreement"), which includes the attached Annex, to assist in the financing of the project described in the Annex "Project"). This Grant is funded out of the abovementioned trust fund for which the World Bank receives periodic contributions from the donors to the trust fund. Please note that in accordance with Section 3.02 of the Standard Conditions (as defined in the Annex to this Agreement), the World Bank's payment obligations in connection with this Agreeme:it are limited to the amount of funds made available to it by the donors under the abovementioned trust fund, and the Recipient's right to withdraw the Grant proceeds is subject to the availability of such funds. Accordingly, in the event that any donor cancels or fails to pay any contributions under the trust fund to the World Bank for any reason, or that as a result of currency exchange variations the amount of funds available in the trust fund is insufficient for the purposes of the Grant, the Recipient shall bear the risk of such funding shortfall and the World Bank shall not have any liability whatsoever to the Recipient or to any third parties in respect of any expenditures or liabilities incurred by the Rec pient or any third parties in connection with this Agreement which exceed the amount of funds made available to the World Bank by the donors for the purposes of the Grant. The Recipient represents, by confirming its agreement below, that it is authorized to enter into this Agreennt and to carry out the Project in accordance with the terms and conditions set forth or referred to in this lgreement. The Recipient further represents that it intends to obtain from to assist in financing of the Prcject. The Recipient is expected to complete the Project activities within 6 months prior to the Closing Date specified in Section 3.03 of the Annex to this Agreement. Please confirm the Recipient's agreement to the foregoing by having an authorized official of the Re.:iaient sign and date the enclosed copy of this Agreement, and returning it to the World Bank. Upon jeceipt by the World Bank of this countersigned copy, this Agreement shall become effective as of the date of the countersignature; provided, however, that the offer of this Agreement shall be deemed withdrawn if the World Bank has not received the countersigned copy of this Agreement within 40 days after th: date of signature of this Agreement by the World Bank, unless the World Bank shall have establishrd a later date for such purpose. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT B Valerie D'Costa infol)ev Program Manager AGREED: Mr. Eric Hersman s Representative's signature Name OX Ue- Aw Title_4 &raex-1 Date: ( Enclosuei s: (1) "St,,ndard Conditions for Grants Made by the World Bank Out of Various Funds", dated February 15 2012; (2) Dislursement Letter of the same date as this Agreement, together with "World Bank Disbursement Gudelines for Projects", dated May 1, 2006; ) "Gu delines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dared October 15, 2006 and revised in January 2011; (4) Pro ezt Objectives and Activities. . ANNEX Article I Standard Conditions; Definitions 1.01. Standard Conditions. The Standard Conditions for Grants Made by the World Bank out of Various Funds dated February 15, 2012 ("Standard Conditions") constitute an integral part of this Agreement. 1.02. Definitions. Unless the context requires otherwise, the capitalized terms used in this Agreement have the neanings ascribed to them in the Standard Conditions or in this Agreement. Article II Project Execution 2.01. Project Objectives and Description. The objectives of the Project and the Project activities to be financed out of the proceeds of the Grant are as set forth in Attachment [1] to this Annex. 2.02. Project Execution Generally. The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall carry out the Project in accordance with: (a) the provisions of Article 11 of the Standard Conditions; (b) this Article II; and (c) the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in January 2011. 2.03. Project Deliverables. The Recipieni shall: I a) furnish to the World Bank all reports, documents or programs (each, a "Deliverable") to be developed under the Project, in electronic (electro-magnetic or machine readable format) and printed format; I h) if the Deliverable is a conference or workshop, the Recipient shall furnish to the World Bank ar agenda of the event and any reports or papers resulting from the event on a timely basis as agreed with tht World Bank; and I ) ensure that infoDev is clearly identified as a sponsor on all Deliverables. 2.04. Project Monitoring, Reporting and Evaluation. The Recipient shall monitor and evaluate the progres; -f the Project and, upon the World Bank's request, prepare Project Reports, in accordance with the prov sions of Section 2.06 of the Standard Conditions and on the basis of the indicators acceptable to the Wo- d Bank. Each Project Report shall cover such period as shall be indicated in the World Bank's request rid shall be furnished to the World Bank not later than one month after the date of such request. 2.05. Financial Management. (a) The Recipient shall ensure that a financial management system is maintai ied in accordance with the provisions of Section 2.07 of the Standard Conditions. ib) The Recipient shall ensure that interim unaudited financial reports for the Project are prepared and furnished to the World Bank riot later than one month after the end of each calendar quarter, coverin2 the quarter, in form and substance satisfactory to the World Bank. (c) The Recipient shall have its Financial Statements audited in accordance with the provisions of Section 2.07 (b) of the Standard Conditions. Such audit of the Financial Statements shall cover thc entire period during which withdrawals from the Grant Account were made; provided, however, that in tl-v event that the Closing Date referred to in Section 3.03 of this Agreement is extended, such audit shall, if ic requested by the World Bank, separately cover such additional period as shall be indicated in the World Bank's request. The audited Financial Statements for such period shall be furnished to the World Bz nk not later than six months after the end of such period. 2.06. P'rocurement 1) General. All oods, works and services required for the Project and to be financed out of the proceeds of the Grant shall be procured in accordance with the requirements set forth or referred to in: i) Section I of the "Guidelines: Procurement of Goods, Works and Non-Consulting Services inder IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 ("Procurement Guidelines"), in the case of goods, works and non-consulting services; and [i) Sections I and IV of the "Guidelines: Selection and Employment of Consultants under [BRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 '"Consultant Guidelines") in the case of consultants' services; and iii) the provisions of this Section, as the same shall be elaborated in the procurement plan repared and updated from time 10 time by the Recipient for the Project in accordance with paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines 'Procurement Plan"). b) Definitions. The capitalized terms used in the following paragraphs of this Section to describe particular procurement methods ot methods of review by the World Bank of particular contracts, refer to the corresponding method described in the Sections II and III of Procurement Guidelines, or Sections 1l, III, IV and V of the Consultant Guidelines, as the case may be. ,c) Particular Methods of Procirement of Goods, Works and Non-consulting Services. (i) Except as otherwise provided in sub-paragraph (ii) below, goods, works and non- consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding (ii) the following metAods, other than International Competitive Bidding, may be used fci procurement of goods, works and non-consulting services for those contracts specified in the Procurement Plan: (A) National Competiti%e Bidding, (B) Shopping; and (C) Direct Contracting. (d) Particular Methods of Procurement of Consultants' Services. (i) Except as otherwise provided in sub-paragraph (ii) below, consultants' services shall be procured under contracts awarded on the basis of Quality- and Cost-based Selection. (ii) The following me[hods, other than Quality- and Cost-based Selection, may be used for the procurement of consultants' services for those contracts which are specified in the Procure ient Plan: (A) Selection based on Consultants' Qualifications; (B) Single-source Selection of consulting firms; (C) Selection of IndiviJual Consultants; and (D) Single-source procedures for the Selection of Individual Consultants. (e) Review by the World Bar&k of Procurement Decisions. The Procurement Plan shall set forth tose contracts which shall be subject to the World Bank's Prior Review. All other contracts shall be subject o Post Review by the World Bank. ,f) Procurement Audit. The Recipient shall ensure that the audit conducted pursuant to Section 2.05 (c) of this Agreement shall also include an audit of the procurement of goods and services finance: out of the proceeds of the Grant. Article III Withdrawal of Grant Proceeds 3.01. Eligible Expenditures. (a) The Recipient may withdraw the proceeds of the Grant in accordance with the provisions of (a) Artic e III of the Standard Conditions, (b) this Section, and (c) such additional instructions as the World Bank may specify by notice to the Recipient (including the "World Bank Disbursement Guidelines for Projects" dated May 2006, as revised from time to time by the World Bank and as made applicable to this Agreement pursuant to such instructions), to finance 100% (inclusive of Taxcs) of Eligible Expenditures consisting of goods, works, consultants' services including audits, Workshops and Training, and Operating Ccsts. 'b) For the purposes of paragraph (a) of this Section: (i) the term "Workshops and Training" means ihe costs associated with workshops and training carried out under the Project including travel and subsistc,ice costs for workshop and training participants, costs associated with securing the services of worksh:p speakers and trainers, rental of workshop and training facilities, preparation and reproduction of worashop and training materials, and other costs directly related to workshop and training course preparation and implementation; and (ii) tre term "Operating Costs" means the operating costs incurred on account of the implementation of the Project including maintenance of vehicles, fuel, equipment, office sipplies, rental charges, utilities, consumables, bank charges, advertising expenses, insurance, travel, p.r diems, and accommodation, but excluding salaries of civil servants. 3.02. Withdrawal Conditions. Notwithstanding the provisions of Section 3.01 of this Agreement, no withdrawkal shall be made for payments made prior to the date of countersignature of this Agreement by the Recipient. 3.03. Withdrawal Period. The Closing Date referred to in Section 3.06 (c) of the Standard Conditions is June 30, 2013. Article IV Intellectual Property Rights/Licenses 4.01. Intellectual Property Rights/Licenses (a) The World Bank shall, excc pt as provided below, own all right, title and interest, including all inte, ectual property rights, in and to any Deliverable created under this Agreement. The World Bank hereby grants to the Recipient a perpetual, royalty-free, non-exclusive, worldwide license to use, modify, copy, e,ploit, distribute (including sublicensing), create derivative works of, make, have made, sell, offer for sale and import such intellectual property contained in any such Deliverable. To the extent that any Deliverable contains any intellectual property previously developed by the Recipient or by third parties, and to ihe extent that the Recipient creates any derivative works as referred to above, the Recipient hereby grants L) the World Bank a license over such previously developed intellectual property and over any derivative works on the same terms as specified above. Any such previously developed intellectual property shall be so identified. (b) The Recipient hereby represents and warrants to the World Bank, and the World Bank enters into this Agreement in the express reliance upon such representation and warranty, that: i) the Recipient either owns or holds valid and continuing licenses to any intellectual property used in connection with the performance of the Project or any Deliverables provided hereunder, ind that, as a result of such use, the Recipient will not be in violation of any such licenses; and ,ii) the Recipient has the right to grant the licenses in sub-article 4.01 (a), above. ,c) The Recipient hereby expressly protects, indemnifies and holds harmless the World Bank, its affiliates and each of their officers, directors, employees, contractors and agents (collectively the "Indemr ified Parties") from and against any liabilities, claims, suits, damages and expenses (including but not limited to reasonable attorneys' fees) arising from any third party claims alleging that any Deliverables or other materials provided by the Recipient hereunder, or the use of such Deliverables or materials in connection with the Project or by the Indemnified Parties during or after the termination or expiration of this Grant, infringe or misappropriate any trade name, trademark, trade secret, patent, copyright or any other intelleclual propriety right of a third party, provided that such infringement does not result from negligent use. Article V Recipient's Representative; Addresses 5.01. Recipient's Representative. The Recipient's Representative referred to in Section 7.02 of the Standard Conditions is its official who has countersigned this Agreement on behalf of the Recipient. 5.02. Recipient's Address. The Recipient's Address referred to in Section 7.01 of the Standard Conditirns is its address indicated in the cover letter of this Agreement. 5.03. World Bank's Address. The World Bank's Address referred to in Section 7.01 of the Standard Conditi&ns is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 L'nited States of America :able: Telex: Facsimile: INTBAFRAD 248423 (MCI) or 1-202-477-6391 Washington, D.C. 64145 (MCI) Attachment [1] PROJECT OBJECTIVES AND ACTIVITIES 'PART 1: Project Objective and Activities The objective of the Project is to catalyze v rtual incubation to rural areas in East Africa. The Pro ect consists of: 1. Pilot virtual incubation in East Africa of approximately ten (10) to fifteen (15) non-resident incubatees, to take the benefits of business incubation beyond the major cities to more rural populations. 2. Analysis of different tools and business models that can lead to future sustainability for virtual incubation initiatives. 3. Assessment of the impact and cost-effectiveness of virtual incubation and, by way of a strong M&E component, to derive the necessary lessons for potential future scaling-up in East Africa and other countries/regions. 4. Building upon and leveraging the business incubator founded by the World Bank in Tanzania, the mLab based in Nairobi, and mobile social networking hubs based in Kenya, Tanzania and I ganda. 5. Dissemination of start-up best pracices through the virtual space. 6. Establishment of at least one angel network 7. The engagement of an accountant. PART 2: Institutional Arrangements 1. The Recipient represents and warrants that it is duly registered in accordance with the laws of the Nether ands; that it is duly organized and authorized to conduct business pursuant to the agreement between the Consortium Partners dated August 2011, hereafter referred to as the Consortium Agreement); that it i is the authority to sign the Consortium Agreement on behalf of the Consortium Partners; that it has full capacity to be bound by the obligations contained herein; and to carry out, jointly and severally, the Project in accordance with Section2.02 of Article II of the Annex to this Agreement. 2. Establish and maintain throughout the period of implementation of the Project, the Afrilabs Consor ium to the satisfaction of the World Bank; which shall comprise (i) eMobilis Mobile Training Academy (eMobilis), (ii) University of Nairobi, School of Computing and Informatics, (iii) The Web Founda-.ion, (iv) Dar Teknohama Business Incubator(Tanzania), (v) Hive Colab(Uganda), (vi) Kigali Institute of Science and Technolgy (KIST)(Rwanda), (vii) NaiLab, m:Lab, and (viii) Inkubate Ltd (Kenya) (collectively referred to as the 'Consortium Partners'). 3. The Recipient shall be vested with i:he overall responsibility for management and oversight of Project implementation; and shall carry out the Project through the AfriLabs Consortium, in accordance with the World Bank's guidelines and procedures, which shall meet at least every six months; and (a) Cause iHub Limited, registered at PO Box 58275-00200 Nairobi, Kenya, or any successor thereto, to inter alia manage all financial obligations of the Grant to the satisfaction of the World Bank and in accordance with the Project implementation plan. (b) Establish and maintain throughout the Project, a virtual space, comprising inter-alia a website and access to virtual tools (interaction potential through email, Skype and SMS); (c) Develop a viable business model and business plan complemented by a sustainability and revenue plan to ensure longer-term future of the virtual incubation hub/satellite hubs; (d) De%elop a monitoring and evaluation framework in consultation with the World Bank, to ensure and measur: performance of the pilot implementation process. PART 3: Project Scorecard Overall deliverables are according to the following milestones: Project Set Up Objective of Outreach & Recruitment (1) To identify, map and reach out to target incubation candidates (2) "o set up mechanisms and targets for incubation recruitment Objective - Incubation (1) '1o incubate and graduate incubatee candidates Objectiv, - Funding (1) '1o work with entrepreneurs to idenify funding options for their businesses (2) :or businesses with potential and that warrant raising external capital, to package them and reach out to sources of funding