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the Liquor Store, its furnishings, equipment and merchandise <br />in good condition, and free from all liens, provided that <br />purchase money liens may be created on merchandise acquired <br />for resale, or such merchandise may be acquired subject to <br />liens existing at the time of acquisition. It should be <br />no~ed that Minnesota Statutes, Section 426.20, would require <br />the City Council to hold a public hearing as a condition to <br />appropriating City funds, other than the Liquor Store <br />revenues themselves, to cover any shortfall of revenues <br />necessary for operation costs, but this provision shall not <br />apply to appropriations which may need to be made by the <br />City in order to complete the Liquor Store and any other <br />expenses expressly excepted by the foregoing Section of the <br />Minnesota Statutes. It should also be noted that Minnesota <br />Statues, Section 340A.602, requires that if the Liquor Store <br />operates at a loss for any two out of any three consecutive <br />years, the City Council is required to conduct a public <br />hearing on the question of whether or not the City should <br />submit to voter referendum the question of the City's <br />continued operation of the Liquor Store; alternatively, a 5% <br />voter petition may also call a referendum on that question <br />in those circumstances. <br /> <br /> (b) If any properties constituting capital assets of <br />the Liquor Store shall be sold and disposed of, it shall be <br />only at their fair market value, and the proceeds of such <br />sale or disposition shall be used either to produce other <br />capital assets for the Liquor Store or deposited into the <br />Operation and Maintenance Account. No such sale or sales <br />shall be made at times or prices such as to imperil the <br />prompt and full payment of the Bonds. <br /> <br /> (c) The City will procure and keep in force insurance <br />on the Liquor Store and the equipment and furnishings <br />thereof and all stocks of merchandise, protecting against <br />loss or damage by fire, tornado, windstorm, flood, theft and <br />all other causes customarily insured against for like <br />properties. In the event of loss covered by said insurance <br />policies or bonds, the proceeds shall be used to repair or <br />restore the damage or to retire Bonds payable from the <br />revenues of the Liquor Store. <br /> <br /> (d) The City will further keep in force a liability <br />insurance policy (covering~its operation of the Liquor <br />Store). Said policy shall~.specifically provide for the <br />payment by the insurance company on behalf of the insured of <br />all sums which the City shall be obligated to pay by reason <br />of liability imposed upon it by law for injuries or damage <br />to persons, other than employees, including liability <br />imposed by reason of Minnesota Statutes, Section 340A.801. <br /> <br />355470.1 1 0 <br /> <br /> <br />