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leasehold interest in the Substituted Property (except any portion thereof which is not real property) subject to Permitted Encumbrances, together with an endorsement thereto making said policy payable to the Trustee for the benefit of the Owners of the Bonds; (5) In the event of a Substitution, an opinion of the City Attorney of the City to the effect that the exceptions, if any, contained in the title insurance policy referred to in (4) above do not interfere with the beneficial use and occupancy of the Substituted Property described in such policy by the City for the purposes of leasing or using the Substituted Property; (6) An Opinion of Counsel that the Substitution or Removal does not cause the interest on Bonds to be includable in gross income of the Owners thereof for federal income tax purposes; (7) Evidence that the City has complied with the covenants contained in clauses (1) and (2) of Section 6.03 with respect to the Substituted Property; and (8) Evidence that the City has delivered to any rating agency then rating the Bonds copies of the certificates and appraisal described in clauses (1) and (2) above. (9) A Certificate of the City stating that the essentiality of the Substituted Property is comparable to the Leased Property to be substituted or released, and that except for Permitted Encumbrances, no prior liens exist on the Substituted Property. (10) Evidence that the City has received the written consent of the Bond Insurer to any such Substitution or Removal, except that such written consent of the Bond Insurer is not required in the event of the release of Leased Property pursuant to subsection (c) below. (c) So long as 95% or more of the proceeds of the 1994 Bonds deposited in the Acquisition Fund have been spent with respect to the Project, upon delivery of a Certificate of Completion and the issuance by the City of a certificate of occupancy with respect to the Project, all real property and improvements, other than Parcel A and the Project, shall be released from the leasehold hereunder and all right, title and interest in and to such Leased Property shall vest in the City. The City and the Authority may, without further legislative action on the part of either party, take such action as may be required to affect such release. SECTION 2.07. Changes to the Leased Property. Subject to Sections 2.04, 2.05 and 4.02, the City shall, at its own expense, have the right to remodel the Leased Property or to make additions, modifications and improvements to the Leased Property. All such additions, modifications and improvements shall thereafter comprise part of the Leased Property and be subject to the provisions of this Lease. Such additions, modifications and improvements shall not in any way damage the Leased Property or cause it to be used for purposes other than those authorized under the provisions of state and federal law; and the Leased Property, upon completion of any additions, modifications and improvements made pursuant to this Section, LAI-63219.5 7