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Section 303. Cancellation. All Bonds which have been prepaid shall be cancelled and <br />cremated or otherwise destroyed by the Trustee and shall not be reissued and a counterpart <br />of the certificate of cremation or other destruction evidencing such cremation or other <br />destruction shall be furnished by the Trustee to the Issuer and the Borrowers provided, <br />however, that one or more new fully registered Bonds shall be issued for the unprepaid <br />portion of any fully registered Bond without charge to the holder thereof. <br />Section 304. Partial Payment or Prepayment of Bonds. (a) Upon surrender of any <br />Bond for payment or prepayment in part only, the Issuer shall execute and the Trustee shall <br />authenticate and deliver to the holder thereof, at the expense of the Issuer, a new fully <br />registered Bond or Bonds of authorized denominations in aggregate principal amount equal <br />to the unprepaid portion of the bond surrendered. <br />(b) Any holder of any fully registered Bond shall, if it does not elect to surrender <br />the same for a new Bond, endorse on such Bond before any sale or other transfer thereof, a <br />notice of such partial prepayment on the following form which shall be typed or printed on <br />the reverse side of such Bond: <br />PREPAYMENTS ON ACCOUNT OF PRINCIPAL <br />PRINCIPAL BALANCE OF <br />PREPAYMENT AMOUNT PRINCIPAL <br />DATE PREPAID AMOUNT UNPAID SIGNATURE <br />Such partial prepayment shall be valid upon payment of the amount thereof to the <br />registered owner of any such fully registered Bond and the Issuer and the Trustee shall be <br />fully released and discharged from all liability to the extent of such payment irrespective of <br />whether such endorsement shall or shall not have been made upon the reverse of such fully <br />registered Bond by the owner thereof and irrespective of any error or omission in such <br />endorsement. <br />(c) The aggregate principal amount of any partial prepayment of the Bonds shall be <br />allocated pro rata among the holders of the Bonds at the time outstanding. <br />(d) Any partial prepayment of the Bonds shall be applied in inverse order of the <br />maturities of the installments thereon, and there shall be no reduction in the monthly <br />installments thereon. <br />-20- <br />