2023/08/08 Azavar (2)
Professional Services Agreement
Azavar Agreement
Created by:
Tom Fagan
Azavar
Prepared for:
Ron Puccinelli
City of Menifee, California
DocuSign Envelope ID: DB536846-FD6C-436D-AC66-57FC8ACCABACDocuSign Envelope ID: 7762B49E-DF96-47BA-9B1D-0534F47A6FAF
Professional Services Agreement
This Professional Services Agreement
(this “Agreement”) is made and entered
into on the
by and
between Azavar Audit Solutions, Inc.
(DBA Azavar Government Solutions), an
Illinois corporation having its principal
place of business at 55 East Jackson
Boulevard, Suite 2100, Chicago, Illinois
60604 (“Azavar”), and the City of
Menifee, California Municipality
corporation having its principal place of
business at 29844 Haun Road Menifee,
California 92586 (“Customer”).
1. SCOPE OF SERVICES
1.1 Subject to the following terms and
conditions, Azavar shall provide
professional management,
government, revenue and tax, and
computer consulting services
(“Services”) in accordance with
written statements of work agreed to
by the parties (each, a “Statement of
Work”) attached hereto as Exhibit A,
which may be subsequently amended
by the parties. Each Statement of
Work and any subsequent
amendments thereto shall be executed
on behalf of each of the parties,
whereupon it shall be deemed
incorporated herein by reference as
though fully set forth herein. The
parties agree that certain Statements
of Work may be delegated by Azavar
to different affiliates or entities that
shall operate under the terms set forth
in this Agreement.
1.2 Azavar shall be responsible for
providing the Services in substantial
accordance with each Statement of
Work.
Azavar will render the services
provided under this Agreement in a
workmanlike manner in accordance
with industry standards.
1.3 Customer agrees to provide
reasonable facilities and space should
Azavar work on Customer’s premises
as may be reasonably required for the
performance of the Services set forth
in this Agreement and in any
Exhibit hereto.
2. INDEPENDENT CONTRACTOR
Azavar acknowledges and agrees that the
relationship of the parties hereunder shall
be that of independent contractor and that
neither Azavar nor its employees shall be
deemed to be an employee of Customer
for any reason whatsoever. Neither
Azavar nor Azavar’s employees shall be
entitled to any Customer employment
rights or benefits whatsoever.
3. PAYMENT TERMS
Customer shall compensate Azavar the
fees set forth in each Statement of Work.
Azavar shall be entitled to compensation
for time which is actually spent providing
the Services set forth in each Statement of
Work. Azavar shall submit an invoice to
Customer on a monthly or quarterly basis
detailing the amounts charged to
Customer pursuant to the terms of this
Agreement and each Statement of Work
hereto. Customer shall remit payment to
Azavar within thirty (45) days of the date
of each invoice.
Azavar shall be entitled to recover all
costs of collection including, but not
limited to, finance charges, interest at the
rate of one percent (1%) per month,
reasonable attorney’s fees, court costs,
and collection service fees and costs for
any efforts to collect fees from the
Customer.
4. CONFIDENTIAL INFORMATION
4.1 Each party acknowledges that in
the performance of its obligations
hereunder, either party may have
access to information belonging to the
other which is proprietary, private and
highly confidential (“Confidential
Information”). Each party, on behalf
of itself and its employees, agrees not
to disclose to any third party any
Confidential Information to which it
may have access while performing its
obligations hereunder without the
written consent of the disclosing party
which shall be executed by an officer
of such disclosing party. Confidential
Information does not include: (i)
written information legally acquired
by either party prior to the negotiation
of this Agreement, (ii) information
which is or becomes a matter of
public knowledge, (iii) information
which is or becomes available to the
recipient party from third parties and
such third parties have no
confidentiality obligations to the
disclosing party, and (iv) information
subject to disclosure under any state
or federal laws.
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Professional Services Agreement
4.2 Azavar agrees that any work
product or any other data or
information that is provided by
Customer in connection with the
Services shall remain the property of
Customer, and shall be returned
promptly upon demand by Customer,
or if not earlier demanded, upon
expiration of the Services
provided under each Statement of
Work hereto.
5. INTELLECTUAL PROPERTY
5.1 No work performed by Azavar or
any Consultant with respect to the
Services or any supporting or related
documentation therefore shall be
considered to be a Work Made for
Hire (as defined under U.S. copyright
law) and, as such, shall be owned by
and for the benefit of Azavar. In the
event that it should be determined that
any of such Services or supporting
documentation qualifies as a "Work
Made for Hire" under U.S. copyright
law, then Customer will and hereby
does assign to Azavar, for no
additional consideration, all right,
title, and interest that it may possess
in such Services and related
documentation including, but not
limited to, all copyright and
proprietary rights relating thereto.
Upon request, Customer will take
such steps as are reasonably necessary
to enable Azavar to record such
assignment. Customer will sign, upon
request, any documents needed to
confirm that the Services or any
portion thereof is not a Work Made for
Hire and/or to effectuate the
assignment of its rights to Azavar.
5.2 Under no circumstance shall
Customer have the right to distribute
or make public any information or
software containing, or based upon,
Confidential Information of Azavar to
any third party without the prior
written consent of Azavar which must
be executed by a senior officer of
Azavar.
6. DISCLAIMER
EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT,
AZAVAR DOES NOT MAKE ANY
WARRANTY, EXPRESS OR
IMPLIED, WITH RESPECT TO THE
SERVICES RENDERED UNDER
THIS AGREEMENT OR THE
RESULTS OBTAINED FROM
AZAVAR’S WORK,
INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED
WARRANTY OF
MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
7. TERMINATION
7.1 This Agreement shall be effective
(“Term”) from the date first written
above and shall continue thereafter
until terminated upon 90 days written
notice by Customer or Azavar (“Initial
Term”) and automatic renewal terms
(“Renewal Terms”). The Initial Term
shall be for a thirty-six (36) month
period, beginning on the first day of
the execution of this Agreement.
Upon completion of the Initial
Term, this Agreement shall
automatically renew for the Renewal
Terms, as successive thirty-six (36)
month periods, unless previously
terminated. A Party may terminate
one or more of a Statement of Work,
without terminating either this
Agreement or another Statement of
Work.
7.2 Termination for any cause or
under any provision of this Agreement
shall not prejudice or affect any right
of action or remedy which shall have
accrued or shall thereafter accrue to
either party.
7.3 The provisions set forth above in
Section 3 (Payment Terms), Section 4
(Confidential Information), and
Section 5 (Intellectual Property) and
below in Section 9 (Assignment),
Section 10 (Non-Solicitation of
Employees), and Section 11 (Use of
Customer Name) shall survive
termination of this Agreement.
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Professional Services Agreement
8. Before beginning any work under this Agreement, Azavar,
at its own cost and expense, shall procure the types and
amounts of insurance provided in Exhibit B and provide
Certificates of Insurance, indicating that Azavar has obtained
or currently maintains insurance that meets the requirements
of this section and which is satisfactory, in all respects, to City.
Azavar shall maintain the insurance policies required by this
section throughout the term of this Agreement. The cost of
such insurance shall be included in Azavar’s compensation.
Azavar shall not allow any subcontractor, consultant or other
agent to commence work on any subcontract until Azavar has
COMPLETE AGREEMENT
This Agreement, along with each Statement of Work attached
hereto from time to time, contains the entire Agreement between
the parties hereto with respect to the matters specified herein. The
invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other
provision hereof.
City of Menifee, California
obtained all insurance required herein for the
subcontractor(s) and provided evidence thereof to City.
Verification of the required insurance shall be submitted and
made part of this Agreement prior to execution. Consultant
acknowledges the insurance policy must cover inter-insured
suits between City and other Insureds.
Print Name:
Signature:
Armando G. Villa
9. 9. INDEMNIFICATION
9.1 Indemnification for Professional Liability. Where the law
establishes a professional standard of care for performance of
the Services, to the fullest extent permitted by law, Azavar
shall indemnify, protect, defend (with counsel selected by
City), and hold harmless City and any and all of its officers,
employees, officials, volunteers, and agents from and against
any and all claims, losses, costs, damages, expenses, liabilities,
Title:
City Manager
liens, actions, causes of action (whether in tort, contract,
under statute, at law, in equity, or otherwise) charges, awards,
Azavar Audit Solutions, Inc
assessments, fines, or penalties of any kind (including
reasonable consultant and expert fees and expenses of
investigation, costs of whatever kind and nature and, if
Azavar fails to provide a defense for City, the legal costs of
counsel retained by City) and any judgment (collectively,
“Claims”) to the extent same are caused in whole or in part by
any negligent or wrongful act, error, or omission of Azavar, its
officers, agents, employees, or subcontractors (or any entity or
individual that Consultant shall bear the legal liability
Print Name:
Signature:
Jason Perry
thereof) in the performance of professional services under this
Agreement.
9.2 Indemnification for Other than Professional Liability.
Other than in the performance of professional services and to
the full extent permitted by law, Azavar shall indemnify,
protect, defend (with counsel selected by City), and hold
Title: President
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harmless City, and any and all of its officers, employees,
officials, volunteers, and agents from and against any and all
Claims, where the same arise out of, are a consequence of, or
are in any way attributable to, in whole or in part, the
performance of this Agreement by Azavar or by any
individual or entity for which Azavar is legally liable,
including but not limited to officers, agents, employees or
subcontractors of Azavar.
9.3 Limitation of Indemnification. The provisions of this
Section 9 do not apply to claims occurring as a result of City’s
sole or active negligence. The provisions of this Section 9 shall
not release City from liability arising from gross negligence or
willful acts or omissions of City or any and all of its officers,
officials, employees, and agents acting in an official capacity.
10. NOTICES
Any notice made in accordance with this Agreement shall be sent
by certified mail or by overnight express mail:
If to Azavar:
General Counsel
Azavar Audit Solutions, Inc.
55 East Jackson Boulevard
Suite 2100
Chicago, Illinois 60604
If to Customer:
City Manager
City of Menifee, California
29844 Haun Road Menifee,
California 92586
11. ASSIGNMENT
Neither party may assign this Agreement or any of its rights
hereunder without the prior written consent of the other party
hereto, except Azavar shall be entitled to assign its rights and
obligations under this Agreement in connection with a sale
of all or substantially all of Azavar’s assets.
12. NONSOLICITATION OF EMPLOYEES
During the period in which any Exhibit to this Agreement is in
effect and for a period of twelve (12) months thereafter, each
party agrees it will not, without the prior written consent of the
other party, solicit the employees of the other party for the
purpose of offering them employment; provided, however, that
good faith solicitations by way of mass media (i.e., newspapers,
internet) shall not be deemed to be a violation of this Section.
11. USE OF CUSTOMER NAME
Customer hereby consents to Azavar’s use of Customer’s name in
Azavar’s marketing materials; provided, however, that
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Customer’s name shall not be so used in such a fashion that could
reasonably be deemed to be an endorsement by Customer of
Azavar.
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DocuSign Envelope ID: DB536846-FD6C-436D-AC66-57FC8ACCABACDocuSign Envelope ID: 7762B49E-DF96-47BA-9B1D-0534F47A6FAF
Exhibit A - Statement of Work
Azavar Agreement
Created by:
Tom Fagan
Azavar
Prepared for:
Ron Puccinelli
City of Menifee, California
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DocuSign Envelope ID: DB536846-FD6C-436D-AC66-57FC8ACCABACDocuSign Envelope ID: 7762B49E-DF96-47BA-9B1D-0534F47A6FAF
Exhibit A – Statement of Work
This Statement of Work (“Statement of Work”) is made and
entered into on this by and
between Azavar Audit Solutions, Inc., an Illinois corporation
having its principal place of business at 55 East Jackson
Boulevard, Suite 2100, Chicago, Illinois 60604 (“Azavar”), and
the City of Menifee, California, a California corporation, having
its principal place of business at 29844 Haun Road Menifee,
California 92586 (“Customer”). WHEREBY the parties entered
into a Professional Services Agreement (“Agreement”) by
signature by the parties attached hereto on
.
1. COMPLIANCE AUDITS & ONGOING REVENUE
MAXIMIZATION AND MONITORING SERVICES:
In addition to the Services and work defined in the Agreement,
Services shall be provided in substantial accordance with the
below statements:
(a) Azavar, as Customer’s authorized agent and third-party
administrator (“TPA”), shall undertake a Local Government
Revenue Compliance Audit, Maximization, and Monitoring
Program (“Revenue TPA Program”) on behalf of the
Customer. As part of the Revenue TPA Program Azavar shall,
on behalf of the Customer, separately review, audit,
maximize, and regularly monitor for the Term of this
Statement of Work any and all sources of Customer revenue
and related expenses (“Audits”), including, each utility use
tax (UUT), franchise fee imposed by the Customer within the
Customer’s corporate boundaries, and as permitted by the
Customers’ ordinances and state and federal law, including
those revenues, whether levied, imposed, or administered by
the Customer, elsewhere locally, by the state or federal
government, taxpayers, remitters, or those that should be
remitting any funds or savings to the Customer
(“Auditee(s)”), revenues and expenditures related to (and
where applicable), but not limited to the following:
I. Electricity providers and/or consumers
II. Natural gas providers and/or consumers
III. Multichannel video (i.e. cable) franchise fees and
service fees and/or consumers
IV. Telecommunications (i.e. phone, fiber, wireless, etc.)
providers and/or consumers
V. Water, sewer, and/or stormwater providers and/or
consumers
VI. Waste or refuse hauling providers and/or consumers
(b) The purpose of each Audit is to determine past, present, and
future taxes, license fees, service fees, or any other recoveries,
refunds, monies or revenue owed to the Customer that were not
properly attributed to the Customer or were not properly paid or
collected and to determine future taxes, franchise fees, and other
monies owed to the Customer not previously counted so that
Customer can collect these past, present, and future monies.
Federal and state law, the Customer’s own local ordinances and
databases, any agreements, contracts or bills between Customer
and Auditee are used by Azavar to conduct the Audits and Azavar
will present to Customer in writing during the course of the
Audits reports detailing compliance findings and findings of
monies paid, due, or potentially due to the Customer for review
by the Customer per Auditee (“Findings”). Where already
allowable by existing Customer contracts or agreements or
federal, state, or local laws or ordinances, this Statement of Work
authorizes Azavar to correct any prospective errors and make a
reasonable effort to collect monies due to the Customer under
such applicable laws, local ordinances, or contracts. Additionally,
Azavar shall regularly monitor all revenues and related
expenditures monthly during the Term of this Agreement and
shall make any corrections accordingly. Azavar shall review
Customer ordinances and shall present Findings to Customer to
maximize Customer revenues as part of the Audits, and where
such Findings requires a change into the future, Azavar will only
implement such change after Customer has reviewed and agreed
to in writing any such change. Customer understands that
Findings may include, but are not limited to, changes to
technology, organizational processes, process automation,
Customer communication practices, Customer governing
practices, and/or updates to local ordinances or the codification
thereof. Customer agrees that any Findings, whether implemented
in whole or in part by Azavar or the Customer, shall be fully
compensable under Section 2 of this Statement of Work,
including wherein the Findings require any amendments to an
ordinance and wherein the ordinance is changed. Customer
agrees to review any Findings within thirty (30) days;
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Exhibit A – Statement of Work
(c) Customer hereby represents that it is not engaged in any Audits as contemplated under this Statement of Work and shall therefore pay
Azavar the fees set forth in this Agreement for any Findings made by Azavar. Customer agrees during the Term of this Statement of Work
that it shall not initiate or engage in any Audits, changes to any ordinances related to any Audits, or execution or renewal of any contracts
or agreements related to any Audits as contemplated under this Statement of Work without Azavar’s prior written consent;
(d) Customer agrees to provide Azavar access to any and all records in Customer’s possession that are necessary for completion
of the Audits. Customer further agrees to reasonably exercise its authority, if necessary, to assist Azavar in acquiring
information and procure data from Auditees when necessary to complete the Audits and Auditees fail to respond to Azavar in a
timely manner. Customer agrees that it shall provide continued access (prior to, during, and following any Audits) to
documentation and records necessary for completion of the Audits. Customer agrees to notify Azavar of any communications,
including requests for meetings, from Auditees if related to the Audits, and Customer shall include Azavar in any such
communications or meetings with Auditees when reasonable and practicable. Customer shall also designate one (1) professional
staff member to be the Customer’s Primary Contact;
(e) During the course of each Audit, Azavar may find that rather than being owed past due funds, the Customer owes funds erroneously
paid to the Customer. In this case, Azavar will immediately terminate its Audit for that specific Auditee and will document the error and
provide the Customer with information necessary to correct the error. Azavar shall have no liability to Customer for these errors or
actions arising from Azavar’s or Customer’s knowledge thereof;
(f) Customer acknowledges that each Auditee is a separate entity that is not controlled by Azavar and therefore Azavar cannot predict all
the steps or actions that an Auditee will take to limit its responsibility or liability during an Audit. Should Customer negotiate, abate,
cancel, amend, delay, or waive by any means all or a portion of funds identified as payable to Customer during an audit, Customer shall
pay all Azavar expenses and fees for that Audit in addition to any applicable contingency fees for any Findings that were identified by
Azavar or by its Audits and that would have been compensable under Section 2 of this Statement of Work;
(g) During the Audits, Azavar will educate fee and taxpayers and provide all necessary support to onboard them to file and remit
payments to Customer using Azavar software as defined in Exhibit A – Statement of Work 2;
(h) Audit timelines and processes are set in accordance with Azavar’s proprietary audit process and applicable law. The first Audit start
date is expected to be within no later than thirty (30) days from the date of this Statement of Work unless changed and approved by the
Customer’s Primary Contact;
(i) Each Audit is expected to last at least six (6) months. Each subsequent Audit will begin after payment terms and obligations have been
satisfactorily met from previously completed Audits however overlapping Audit work may take place at the discretion of Azavar. Audit
status meetings will be held regularly via phone, email, or in person throughout the course of the Audits between Azavar and the
Customer’s Primary Contact and will occur approximately every quarter;
(j) Jason Perry, Local Government Revenue Compliance Audit, Maximization, and Monitoring Program, and Azavar specialists will be
auditors under this Statement of Work. All Azavar staff or subcontractors shall be supervised by the Azavar Program Manager.
2. PAYMENT TERMS.
2.1 Customer shall compensate Azavar the fees set forth in this Statement of Work on a contingency basis. If applicable, Azavar shall
submit an invoice to Customer on a monthly basis detailing the amounts charged to Customer pursuant to the terms of this Statement of
Work. Should Customer negotiate, abate, cancel, amend, delay, or waive, without Azavar’s written consent, any tax determination or
Findings that were identified by Azavar or by its Audits where such Findings were allowed under the law at the time the tax
determination or Findings were made, Customer shall pay to Azavar applicable contingency fees for the total amount of money actually
collected for said tax determination or Findings at the rates set forth below and for the following thirty-six (36) months. If Customer later
implements during the subsequent thirty-six (36) months any Findings Customer initially declined based on Azavar programs or
recommendations, Azavar shall be paid by Customer its portion of the savings and/or recoveries over the following thirty-six (36)
months at the contingency fee rates set forth below.
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Exhibit A – Statement of Work
2.2 For any and all Audits and/or Findings (under Section 1, excluding Waste or refuse hauling providers and/or consumers),
Customer shall pay Azavar an amount equal to forty-five (45) percent of any new revenues, savings, or prospective funds recovered
per account or per Auditee for thirty-six (36) months following when funds begin to be properly remitted to the Customer. In the
event Azavar is able to recover any additional savings or revenue increases for any time period, or any credits at any time, Customer
will pay Azavar an amount equal to forty-five (45) percent of any savings, funds, and fair market value for any other special
consideration or compensation recovered for or received by the Customer from any Auditee. All contingency fees paid to Azavar are
based on determinations of recovery by Azavar including Auditee data and regulatory filings. All revenue after the subsequent thirty-
six (36) month period for each account individually will accrue to the sole benefit of the Customer.
2.3 If any new revenues, savings, or prospective funds recovered by Azavar result in billings below one hundred dollars ($100) per
month for the duration of the thirty-six (36) month period of billing, Customer will pay for the full 36 months in one billing.
3. COMPLETE AGREEMENT:
This Statement of Work and the Agreement contains the entire Agreement between the parties hereto with respect to the matters specified
herein. The invalidity or unenforceability of any provision of this Statement of Work shall not affect the validity or enforceability of any
other provision hereof. This Agreement shall not be amended except by a written amendment executed by the parties hereto. No delay,
neglect or forbearance on the part of either party in enforcing against the other any term or condition of this Statement of Work shall
either be, or be deemed to be, a waiver or in any way prejudice any right of that party under this Agreement.
IN WITNESS WHEREOF, the parties have caused this Statement of Work to be executed in duplicate originals by their duly authorized
representatives as of the date set forth below.
Azavar Audit Solutions, Inc City of Menifee, California
Print Name:
Signature:
Jason Perry Print Name:
Signature:
Armando G. Villa
Title:
President
Title:
City Manager
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Jeffrey T. Melching, City Attorney
______________________________
Stephanie Roseen, Interim City Clerk
______________________________
Date: ________
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8/8/2023
Exhibit B – Insurance Requirements
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EXHIBIT B – Section 8 Insurance Requirements
1.1 Workers’ Compensation. Azavar shall, at its sole cost and expense, maintain Statutory Workers’
Compensation Insurance and Employer’s Liability Insurance for any and all persons employed directly or
indirectly by Azavar pursuant to the provisions of the California Labor Code. Statutory Workers’ Compensation
Insurance and Employer’s Liability Insurance shall be provided with limits of not less than ONE MILLION
DOLLARS ($1,000,000.00) per accident, ONE MILLION DOLLARS ($1,000,000.00) disease per employee,
and ONE MILLION DOLLARS ($1,000,000.00) disease per policy. In the alternative, Azavar may rely on a
self-insurance program to meet those requirements, but only if the program of self-insurance complies fully
with the provisions of the California Labor Code. Determination of whether a self-insurance program meets the
standards of the California Labor Code shall be solely in the discretion of the Contract Administrator. The
insurer, if insurance is provided, or Azavar, if a program of self-insurance is provided, shall waive all rights of
subrogation against City and its officers, officials, employees, and authorized volunteers for loss arising from
the Services performed under this Agreement.
1.2 Commercial General and Automobile Liability Insurance.
a. General requirements. Azavar, at its own cost and expense, shall maintain commercial general and
automobile liability insurance for the term of this Agreement in an amount not less than ONE MILLION
DOLLARS ($1,000,000.00) per occurrence, combined single limit coverage, for risks associated with the
Services contemplated by this Agreement, TWO MILLION DOLLARS ($2,000,000.00) general aggregate, and
TWO MILLION DOLLARS ($2,000,000.00) products/completed operations aggregate. If a Commercial
General Liability Insurance or an Automobile Liability Insurance form or other form with a general aggregate
limit is used, either the general aggregate limit shall apply separately to the Services to be performed under this
Agreement or the general aggregate limit shall be at least twice the required occurrence limit. Such coverage
shall include but shall not be limited to, protection against claims arising from bodily and personal injury,
including death resulting therefrom, and damage to property resulting from the Services contemplated under
this Agreement, including the use of hired, owned, and non-owned automobiles.
b. Minimum scope of coverage. Commercial general coverage shall be at least as broad as Insurance Services
Office Commercial General Liability occurrence form CG 0001. Automobile coverage shall be at least as broad
as Insurance Services Office Automobile Liability form CA 0001 Code 2, 8, and 9. No endorsement shall be
attached limiting the coverage.
c. Additional requirements. Each of the following shall be included in the insurance coverage or added as a
certified endorsement to the policy:
a. The insurance shall cover on an occurrence or an accident basis, and not on a claims-made basis.
b. Any failure of Azavar to comply with reporting provisions of the policy shall not affect coverage provided to
City and its officers, employees, agents, and volunteers.
1.3 Professional Liability Insurance.
a. General requirements. Azavar, at its own cost and expense, shall maintain for the period covered by this
Agreement professional liability insurance for licensed professionals performing the Services pursuant to this
Agreement in an amount not less than ONE MILLION DOLLARS ($1,000,000) covering the licensed
professionals’ errors and omissions. Any deductible or self-insured retention shall be shown on the Certificate.
If the deductible or self-insured retention exceeds TWENTY-FIVE THOUSAND DOLLARS ($25,000), it must
be approved by City.
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b. Claims-made limitations. The following provisions shall apply if the professional liability coverage is
written on a claims-made form:
a. The retroactive date of the policy must be shown and must be no later than the commencement of the
Services.
b. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after the
expiration or termination of this Agreement or completion of the Services, so long as commercially available at
reasonable rates.
c. If coverage is canceled or not renewed and it is not replaced with another claims-made policy form with a
retroactive date that precedes the Effective Date of this Agreement, Azavar must provide extended reporting
coverage for a minimum of five (5) years after the expiration or termination of this Agreement or the
completion of the Services. Such continuation coverage may be provided by one of the following: (1) renewal
of the existing policy; (2) an extended reporting period endorsement; or (3) replacement insurance with a
retroactive date no later than the commencement of the Services under this Agreement. City shall have the right
to exercise, at Azavar’s sole cost and expense, any extended reporting provisions of the policy, if Azavar
cancels or does not renew the coverage.
d. A copy of the claim reporting requirements must be submitted to City prior to the commencement of the
Services under this Agreement.
1.4 All Policies Requirements.
a. Acceptability of insurers. All insurance required by this Section is to be placed with insurers with a Bests’
rating of no less than A:VII and admitted in California.
b. Verification of coverage. Prior to beginning the Services under this Agreement, Azavar shall furnish City
with Certificates of Insurance, additional insured endorsement or policy language granting additional insured
status complete certified copies of all policies, including complete certified copies of all endorsements. All
copies of policies and certified endorsements shall show the signature of a person authorized by that insurer to
bind coverage on its behalf. The Certificate of Insurance must include the following reference: The name and
address for Additional Insured endorsements, Certificates of Insurance and Notice of Cancellation is: City of
Menifee, 29844 Haun Road, Menifee, CA 92586. City must be endorsed as an additional insured for liability
arising out of ongoing and completed operations by or on behalf of Azavar.
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c. Notice of Reduction in or Cancellation of Coverage. Azavar shall provide written notice to City within
ten (10) working days if: (1) any of the required insurance policies is terminated; (2) the limits of any of the
required polices are reduced; or (3) the deductible or self-insured retention is increased.
d. Additional insured; primary insurance. City and its officers, employees, agents, and authorized volunteers
shall be covered as additional insureds with respect to each of the following: liability arising out of the Services
performed by or on behalf of Azavar, including the insured’s general supervision of Azavar; products and
completed operations of Azavar, as applicable; premises owned, occupied, or used by Azavar; and automobiles
owned, leased, or used by Azavar in the course of providing the Services pursuant to this Agreement. The
coverage shall contain no special limitations on the scope of protection afforded to City or its officers,
employees, agents, or authorized volunteers. The insurance provided to City as an additional insured must
apply on a primary and non-contributory basis with respect to any insurance or self-insurance program
maintained by City. Additional insured status shall continue for one (1) year after the expiration or termination
of this Agreement or completion of the Services.
A certified endorsement must be attached to all policies stating that coverage is primary insurance with respect
to City and its officers, officials, employees, and volunteers, and that no insurance or self-insurance maintained
by City shall be called upon to contribute to a loss under the coverage.
e. Deductibles and Self-insured Retentions. Azavar shall obtain the written approval of City for the self-
insured retentions and deductibles before beginning any of the Services.
During the term of this Agreement, only upon the prior express written authorization of the Contract
Administrator, Azavar may increase such deductibles or self-insured retentions with respect to City, its officers,
employees, agents, and volunteers. The Contract Administrator may condition approval of an increase in
deductible or self-insured retention levels with a requirement that Azavar procure a bond guaranteeing payment
of losses and related investigations, claim administration, and defense expenses that is satisfactory in all
respects to each of them.
f. Subcontractors. Azavar shall include all subcontractors as insureds under its policies or shall furnish
separate certificates and certified endorsements for each subcontractor. All coverages for subcontractors shall
be subject to all of the requirements stated herein.
g. Variation. The Contract Administrator may, but is not required to, approve in writing a variation in the
foregoing insurance requirements, upon a determination that the coverage, scope, limits, and forms of such
insurance are either not commercially available, or that City’s interests are otherwise fully protected.
1.5 Remedies. In addition to any other remedies at law or equity City may have if Azavar fails to provide or
maintain any insurance policies or policy endorsements to the extent and within the time herein required, City
may, at its sole option, exercise any of the following remedies, which are alternatives to other remedies City
may have and are not the exclusive remedy for Azavar’s breach:
a. Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any
sums due under this Agreement;
b. Order Azavar to stop work under this Agreement or withhold any payment that becomes due to Azavar
hereunder, or both stop work and withhold any payment, until Azavar demonstrates compliance with the
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requirements hereof; and/or
c. Terminate this Agreement.
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