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City as liquidated damages. 3. Rent Payment Protection (Security Deposit): a. New commercial tenants shall be required to provide a security deposit. All tenants are required to provide a security deposit to the City in the amount of three (3) months' rent, as protection for the performance of the terms of the lease. This requirement applies to prospective new tenants, as well as existing airport tenants who enter into new lease agreements with the City. Arrangements to provide the security deposit must b;,- completed by the prospective or existing tenant and approved by the Airport Director prior to the time the proposed lease agreement is submitted to the Airport Commission and City Council for consideration. Unless this requirement is waived under the conditions set forth in Section 2(C)3(b), the security deposit must remain in effect throughout the entire tenn of the lease agreement, including any option periods which are exercised by the tenant. The security deposit may be provided in any of the following forms: (1) Cash payment in the amount of three (3) months' rent. (2) An irrevocable Letter of Credit from a financial institution, in the fonn acceptable to the City, in the amount of three (3) months' rent. (3) A Certificate of Deposit from a financial institution, assigned to the City, in the amount of three (3) months' rent. b. For existing airport tenants only, the requirement for a security deposit may be waived (or a previously paid deposit may be refunded, if applicable) by the Airport Director. The security deposit shall be waived ONLY if the tenant has demonstrated an excellent rent payment history (no late payments) at the Vero Beach Regional Airport for a minimum of two (2) consecutive years, and either of the following Page 4 of 11 NAPROPERTY MGT' -7015 Updated Docs\2015 Updated ResolutionsU50324 Airport Leasing Policy replacing Resolution 2007-18 EM.docx 132