Exhibit (g)(1)
AMENDMENT NO. 1 TO
CUSTODY AGREEMENT
AMENDMENT NO. 1 dated as of February 27, 2002, to the Custody
Agreement, dated as of August 30, 1999, between THIRD AVENUE VARIABLE SERIES
TRUST (the "Trust") and CUSTODIAL TRUST COMPANY (the "Custodian").
The Trust 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 Trust'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.
1.11A "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:
"(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. Article III is supplemented by adding
thereto the following new Section 3.10A:
"3.10A 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 VARIABLE SERIES CUSTODIAL TRUST COMPANY
TRUST
By:_________________________________ By:________________________________
Authorized Officer Authorized Officer