EXHIBIT (G)(5)
AMENDMENT NO. 1 TO
CUSTODY AGREEMENT
AMENDMENT NO. 1 dated as of FEBRUARY 27, 2002, to the Custody
Agreement, dated as of March 27, 1997, between THIRD AVENUE TRUST (the "Fund")
and CUSTODIAL TRUST COMPANY (the "Custodian").
The Fund and the Custodian hereby agree as follows:
1. DEFINITIONS. Sections 1.8-1.11 are amended by deleting them in their
entirety and replacing them with the following:
"1.8 "Eligible Foreign Custodian" means any banking institution, trust
company or other entity organized under the laws of a country other than
the United States which is eligible under the 1940 Act to act as a
custodian for securities and other assets of a Portfolio held outside the
United States.
1.9 "Eligible Securities Depository" means a system for the central
handling of securities as defined in Rule 17f-7 under the 1940 Act.
1.10 "Foreign Custody Manager" means the Fund's Board of Trustees or
any person serving as the Board's delegate under Rule 17f-5 under the
1940 Act.
1.11 "Foreign Securities Depository" means a foreign securities
depository or clearing agency which is an Eligible Securities Depository.
1.11(a)"Foreign Assets" has the same meaning as in Rule 17f-5 under the
1940 Act."
2. APPOINTMENT OF FOREIGN SUB-CUSTODIANS. Section 3.6 (a) is amended by
deleting it in its entirety and replacing it with the following:
"3.6 (a) (i) By providing Proper Instructions to open an account
in a given jurisdiction outside the United States, the Trust shall be
deemed to have confirmed to Custodian that the Trust has (A) assessed and
accepted all material country or sovereign risks in such jurisdiction and
accepted responsibility for their occurrence, (B) made all determinations
required to be made by the Trust under the 1940 Act, and (C)
appropriately and adequately disclosed to its shareholders, other
investors and all persons who have rights in or to such investments, all
material investment risks, including those relating to the custody and
settlement infrastructure or the servicing of securities in such
jurisdiction. Proper Instructions to open an account in a given country
shall comprise authorization of Custodian to hold assets in such country
in accordance with the terms of this Agreement. Custodian shall not be
required to make independent inquiry as to the authorization of the Trust
to invest in such country.
(ii) Unless instructed otherwise by the Trust, Custodian at any
time and from time to time in its discretion may appoint and employ in
accordance with the 1940 Act, and may also cease to employ, (A) any
overseas branch of any Eligible Domestic Bank, or (B) any Eligible
Foreign Custodian selected by the Foreign Custody Manager, in each case
as a foreign sub-custodian for securities and other assets of a Portfolio
that are maintained outside the United States, provided, however, that
the employment of any such overseas branch has been approved by the Trust
and, provided further, that, in the case of any such Eligible Foreign
Custodian, the Foreign Custody Manager has approved the agreement
pursuant to which Custodian employs such Eligible Foreign Custodian."
3. FOREIGN SECURITIES DEPOSITORIES. Section 3.11 is amended by deleting it
in its entirety and replacing it with the following:
"3.11 FOREIGN SECURITIES DEPOSITORIES. (a) Unless instructed
otherwise by the Trust, Custodian may deposit and/or maintain Foreign
Assets of the Trust with any Eligible Securities Depository. Prior to the
time that securities are placed with such Eligible Securities Depository,
Custodian shall have prepared an assessment of the custody risks
associated with maintaining assets with the Eligible Securities
Depository.
(b) Prior to placing any assets of the Trust with an Eligible
Securities Depository, Custodian shall provide to the Trust an assessment
of the custody risks associated with maintaining assets with such
Eligible Securities Depository. Custodian shall monitor such custody
risks on a continuing basis and promptly notify the Trust of any material
change in such risks. In performing its duties under this Section
3.11(b), Custodian shall use reasonable care, prudence and diligence and,
in the exercise of such care, prudence and diligence, may rely upon
examinations performed and determinations made by Citibank, N.A. or such
other operator of a global custody system as the Trust may from time to
time approve.
4. EFFECTIVE DATE. This Amendment No. 1 shall be effective as of the date
hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
No. 1 to be executed by its representative thereunto duly authorized, all as of
the day and year first above written.
THIRD AVENUE TRUST CUSTODIAL TRUST COMPANY
By:_________________________________ By:_______________________________
Authorized Officer Authorized Officer
