In connection with the issuance by a municipality or county of original or replacement bonds or notes in registered form, the treasurer of the municipality or county, with the approval of the officer or officers authorized to sign such bonds or notes, is authorized to contract for and engage the services of any bank, trust company, banking institution or financial institution within or without the state to perform authentication, registration, transfer, exchange, record and paying agent functions, including, without limitation, the preparation, signing and issuance of checks in payment of such bonds or notes, the preparation and maintenance of records, reports and accounts and the performance of such related duties as may be necessary or desirable in connection with such bonds or notes. The treasurer, with such approval, may also enter into agreements with banks, trust companies, banking institutions and financial institutions to act as custodian or financial intermediary in connection with the establishment and maintenance by others of a central depository system for the transfer of interests in such bonds or notes. Any agreement entered into under this section shall include provisions for indemnifying the municipality or county for losses sustained by it on account of the negligence of a designated bank, trust company, banking institution or financial institution or on account of the failure of such designated bank, trust company, banking institution or financial institution to perform faithfully its duties and obligations under the agreement. Such agreement may include additional provisions necessary or desirable to protect the municipality or county and may provide for the limitation of liabilities of the parties, indemnification or payment of liquidated damages.