(EXHIBIT B: For Collateral Security Agreement for Nevada
Public Deposits Secured Under Pooled Collateral Method)
This COLLATERAL CUSTODIAL AGREEMENT to accept and collateralize public funds
deposits (“Agreement”) is made and entered into on the date last herein written by and between
the state of Nevada acting through its Office of the State Treasurer,
(“Depository”); and
with its principal place of business in
with its principle
place of business in
WHEREAS, chapter 356 of the Nevada Revised Statutes (NRS) and chapter 356 of the
Nevada Administrative Code (NAC) authorizes the Treasurer to enter into this Agreement,
subject to the approval of the Nevada Board of Finance; and
WHEREAS, the Depository desires to act as a depository for public funds as described
in NRS 356.360; and
WHEREAS, the Treasurer oversees the program to monitor collateral that may be
pledged as described in NRS 356.350; and
WHEREAS, the Depository has certain types of acceptable securities as ascribed to it in
subsection 1 of NRS 356.360 (collectively “Collateral”) which may be pledged for the benefit of
the Treasurer with the any insured state or national bank or insured credit union or savings and
loan association, other than the Depository or an affiliation thereof, as collateral to secure
deposits of public funds with the Depository; and
WHEREAS, the Depository has or intends by this Agreement to transfer said Collateral
that the Depository pledges to the Custodian; and
WHEREAS, the Custodian has agreed to accept and hold said Collateral in trust for the
benefit of the Treasurer to secure deposits of public funds so deposited at the Depository; and
WHEREAS, the Collateral Security Agreement incorporates this Agreement by its terms
and requires this Agreement to be maintained as a permanent record with the Collateral Security
Agreement; and
WHEREAS, this Agreement shall become effective on the date approved by the Nevada
Board of Finance;
NOW THEREFORE, in consideration for the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually
agreed that the Custodian will accept all Collateral that may be delivered from time to time by
the Depository and that it will hold the same in trust for the Treasurer for its use and benefit and
subject to the powers and the duties as follows:
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Clear Form
1. Pledge of Collateral. The Depository hereby pledges and grants for the benefit of
the Treasurer, a continuing security interest in and assigns and pledges acceptable
securities as pledged Collateral to and held by the Custodian to secure uninsured
deposits of public funds held in the Depository pursuant to NRS chapter 356 and
NAC chapter 356 under this Agreement. Custodian agrees to accept and retain all
Collateral deposited with it by the Depository in the form in which it is received,
subject to withdrawal or other disposition on written instructions of the Treasurer or
his designated deputy as may be designated by the Treasurer in writing from time to
time. The Depository shall be entitled to income on any and all interest, dividends,
distributions and sums distributed or payable from such Collateral, and all proceeds
and profits of any of said Collateral, unless Custodian has received prior notice from
the Treasurer that the depository has failed to pay any part of any public deposit on
demand of the Treasurer; in which event, all such income shall then be credited in
accordance with the Treasurer’s written instructions to the Custodian.
2. Appointment and Duties of Bailee/Custodian. The Depository hereby appoints a
Custodian, and the Custodian agrees to act, as the Depository’s bailee and custodian
of the Collateral to be pledged pursuant NRS Chapter 356. The Custodian is acting
as a bailee for hire and as such shall operate hereunder with reasonable care. The
Custodian shall not be liable for loss or damage, including attorney’s fees, resulting
from its actions or omissions to act or otherwise, except for any such loss or damages
arising out of its own negligence or willful misconduct. The Custodian shall have no
obligation hereunder for costs, expenses, damages, liabilities, or claims, including
attorney’s fees, which are sustained or incurred by reason of any action or inaction by
the Federal Reserve Book-Entry System, any clearing corporation or their successors
or nominees. In no event shall the Custodian be liable to the Depository, the
Treasurer, or any third party for special, indirect or consequential damages. The
Custodian shall not have any additional duties other than those expressly provided in
this Agreement and expressly stated in NRS chapter 356 and NAC chapter 356.
3. Indemnification of Custodian. The Depository agrees to indemnify the Custodian
and to hold it harmless against any and all direct costs, expenses, damages, liabilities
or claims, including reasonable attorney’s fees and expenses, which the Custodian
may sustain or incur or which may be asserted against the Custodian by reason of or
as a result of any action taken or omitted by the Custodian in connection with
operating under this Agreement, except those costs, expenses, damages, liabilities or
claims arising out of the negligence or willful misconduct of the Custodian, unless
otherwise agreed to by the Custodian and Depository.
4. Location of Collateral. The Depository agrees to deliver and place the Collateral
with the Custodian reflecting the name of the Treasurer as the secured party. The
Custodian agrees to acknowledge the receipt of the pledged Collateral and shall
segregate such pledged Collateral from other collateral, if any, held by it for the
account of the Depository. The Custodian shall not be responsible for determining
the validity of the Collateral pledged as collateral from the Depository.
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5. Ownership, Additions, Release or Substitution of Collateral. The Depository
represents and warrants that it is the owner of the Collateral and that such Collateral
are and will remain free and clear of any and all security interests, liens and claims of
any other person, except for the security interest and pledge granted in this
Agreement to the Treasurer. The Depository shall be deemed to repeat such
representation with respect to Collateral delivered in addition to or in substitution of
the existing Collateral. The Depository shall have the right at any time, with prior
written approval of the Treasurer, to substitute acceptable Collateral of equal or
greater fair market value. No Collateral may be substituted when the substitution is
less that the existing fair market value without written approval of the Treasurer. No
Collateral may be released without written approval of the Treasurer. The
Depository shall provide the Treasurer with a statement for written approval of the
respective values and type of the Collateral to be replaced and/or substituted at a
lower fair market value. Upon written notification from the Treasurer or his
designated Deputy that any Collateral is no longer needed as pledged Collateral, the
Custodian shall release the Collateral to the Depository and be guided by the
Depository’s written instruction with respect thereto.
6. Maintenance of Collateral. The Depository agrees to take all steps required by it
under applicable law to create, maintain and perfect the Treasurer’s security interest
in the Collateral granted by this Agreement. The Depository agrees to execute any
additional documents or take whatever other action is requested by the Treasurer to
perfect and continue the Treasurer’s security interest in the Collateral.
7. Security Calls. The Custodian shall be under no duty to investigate any Collateral
for security calls prior to maturity. If information as to a call is received, the
Custodian shall notify Depository of any called or maturing securities and shall be
guided by written instructions of Treasurer; provided, however that Depository has
the right to freely substitute other Collateral of greater than or equal fair market value
for such called or maturing securities .
8. Reporting. The Depository shall provide the Treasurer with evidence of pledged
Collateral by reporting to the Treasurer as described in subsection 1(d) of NRS
356.360. The Custodian shall provide the Treasurer with evidence of pledged
Collateral, a listing of acceptable securities including without limitation the fair
market value of those securities held by the Custodian on behalf of the Treasurer on
or before the fifth (5
) of each month for the preceding month.
9. Continuously Maintain Agreement. All parties agree that they will immediately
upon execution of this Agreement keep and continuously maintain an executed copy
of this Agreement, and such other customary writings and records sufficient to
identify that Collateral which have been pledged to the Treasurer.
10. Termination. This agreement, NRS chapter 356 and NAC chapter 356 constitute the
entire agreement among the parties, supersede any existing agreement among the
parties hereto relative to the matters contained herein, and may be modified or
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amended only by written amendment executed by all parties hereto. Any party to this
Agreement may terminate its participation under this Agreement for any reason by
giving written notification of termination to all other parties. Termination becomes
effective ninety (90) days after the date the non-terminating parties receive such
written notice of termination. The Custodian shall prior to the date of termination,
transfer all eligible Collateral it holds pursuant to this Agreement either to another
eligible the Custodian designated by the Depository or, if the Depository fails to
make such a designation, to the Treasurer.
11. Successors and Assigns. This Agreement is continuing and binding upon
Depository, its successors and assigns, and shall inure to the benefit of the parties
hereto, and their respective successors; provided, however that this Agreement shall
not be assignable by any party to this Agreement without prior written consent of all
parties and the Nevada Board of Finance, except that Depository may assign to an
affiliate or subsidiary of its parent corporation or successor by merger thereto,
without such written consent.
12. Default and Remedies. The Depository and the Custodian shall be in default under
the terms of this Agreement upon the failure to perform any of the material terms and
conditions of this Agreement or failure to comply with any applicable provisions of
NRS chapter 356 and NAC chapter 356. In the event of default, the non-defaulting
party shall have all the rights and remedies of a secured party under this Agreement
or provided for at law or in equity, by NRS chapter 356, NAC chapter 356 or by
Nevada law.
13. Service Fees. The Depository acknowledges and agrees that the Depository shall
compensate the Treasurer for services under this Agreement pursuant to a pro rata
assessment as provided for in NRS 356.370. Any service charge or other
compensation of any kind or nature whatsoever which is to be paid to the Custodian
for the safekeeping of the Collateral as provided for in this Agreement shall be done
exclusively by the Depository.
14. Attorney’s Fees. In the event any party is required to commence any suit or action
to enforce the terms of this Agreement, the prevailing party is entitled to recover its
reasonable attorney’s fees and costs.
15. Audit. Upon reasonable prior written notice, the books records, and documents of
the Custodian, relevant to this Agreement, shall be subject to inspection, examination
and audit by the Treasurer. The Custodian agrees to allow the Treasurer to review
findings and results of any inspection, examination, and/or audit of the Custodian’s
books, records and documents, relevant to this Agreement, conducted by state or
federal agencies which regulate its activities and which would not violate the
Custodian’s duty of confidentiality to other customers or any confidentiality
requirements of the regulatory agencies.
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16. Notices. All notices and other communications between the parties shall be in
writing and addressed to the respective party at the address below. When any written
notice, request, demand or report is required or may be given hereunder, it shall be
deemed sufficient if the party giving such notice, request, demand, or other advice
delivers the same to the other party by U.S. mail, postage prepaid, or by other
superior mailing, or by hand delivery. All notices, requests, demands or reports
delivered by mail or by hand will be deemed to have been given when received by
any party hereto at the following addresses.
Treasurer: Office of the State Treasurer
Pooled Collateral Program
101 N. Carson Street, Suite 4
Carson City, Nevada 89701-4786
Any addressee may change the address to which notices are to be sent by notice of such
change to the other addressees given as provided herein.
18. Authorizations. Both the Treasurer and the Depository agree to provide the
Custodian with specimen signatures of those persons authorized to give instructions to
the Custodian under this agreement, and the Custodian shall not incur any liability with
respect to any action taken in reliance upon any written instruction which the Custodian
shall in good faith believe to be genuine and to have been signed by a duly authorized
person. The Treasurer further agrees to notify the Custodian of the identity of the person
or Deputy who will be authorized to give instructions to the Custodian under this
19. Amendments or Modifications. No alteration, variation, amendment, modification
or waiver of any provision of this Agreement or waiver of any right hereunder shall be
valid or binding on any party hereto unless it is reduced to writing and is signed by all of
the parties.
20. Duplicate Originals. Three (3) or more duplicate originals of this Agreement may
be signed by the parties hereto, each of which shall be an original but all of which
together shall constitute one and the same Agreement.
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21. Governing Law. This Agreement shall be governed by the laws of the state of
Nevada and, whenever possible, each provision of this Agreement shall be interpreted in
such a manner as to be effective and valid under said laws; provided, however, if any
provision of this Agreement shall be construed to be prohibited or invalid under
applicable law, such provision shall be ineffective only to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or remaining
provisions in this Agreement. To the extent any terms of this Agreement are inconsistent
with the provisions of NRS chapter 356 or NAC chapter 356, the provision of NRS
chapter 356 and NAC chapter 356, as amended, shall control.
IN WITNESS THEREOF, the parties have executed this Agreement on the
day of
, by the undersigned duly authorized officers of the parties hereto.
(Signature) (Title)
(Signature) (Title)
(Signature) (Title)
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