9-4-828. Joint custody agreement for securing local deposits; execution and contents of agreement.

(a) The joint custody agreement shall be executed by the custodian, the depository bank and the treasurer of the proper governing board and shall:

(i) Contain the following provisions:

(A) The custodian will detach as they mature and enter for collection the coupons from the securities and the proceeds when collected will be credited to the account of the depository bank unless otherwise ordered by the treasurer;

(B) The custodian will enter matured principal for collection and hold the proceeds when collected subject to the joint order of the treasurer and depository bank;

(C) It is understood by the treasurer and depository bank that the custodian assumes no responsibility for the nonpayment of interest or principal nor for the validity, genuineness or enforceability of any of the securities deposited in safekeeping hereunder nor makes any representation or warranties expressed or implied, as to the value or worth thereof, nor for the giving of notice of maturity, calls for redemption or the exercise of any rights, priorities, privileges of exchange or conversion or for the timely presentation of maturing principal or interest of any securities deposited under this agreement;

(D) The custodian assumes no responsibility with respect to the safekeeping and condition of deposited property beyond the care and custody it gives its own securities held on its own premises. Any and all forms of protective insurance are to be furnished by the treasurer and depository bank at their option and expense. The custodian is not required to furnish any form of protective insurance; and

(E) The custodian shall deliver the securities to the treasurer upon the sole order of the treasurer when supported by a verified certificate of the state banking commissioner certifying under seal that the depository bank has failed or refused to pay all or a portion of the deposit due the treasurer by the depository bank and that under the terms of the pledge agreement executed by the depository bank the treasurer is entitled to delivery of the securities described in this receipt or the proceeds thereof. Otherwise the securities shall be delivered only upon the written joint order and instructions of the treasurer and depository bank; or

(ii) Be in a form and contain provisions as required by the state treasurer or the treasurer of the proper governing board.