Exhibit 77Q1(e)(2)
The Growth Fund of Spain, Inc.
Form of N-SAR for the period ended 05/31/98
File No. 811-6022
SUB-ADVISORY AGREEMENT
AGREEMENT made this 31st day of December, 1997, by and between
XXXXXXX XXXXXX INVESTMENTS, INC., a Delaware corporation (the
"Adviser") and BSN GESTION DE PATRIMONIOS, S.A., S.G.C., a
corporation organized under the laws of Spain (the "Sub-
Adviser").
WHEREAS, THE GROWTH FUND OF SPAIN, INC., a Maryland corporation
(the "Fund"), is a closed-end, diversified management investment
company registered under the United States Investment Company Act
of 1940, as amended (the "Investment Company Act of 1940") the
shares of common stock (the "Shares") of which are registered
under the Securities Act of 1933;
WHEREAS, the Fund has retained the Adviser to render to it
investment advisory and management services pursuant to an
Investment Management Agreement, dated December 31, 1997 (the
"Management Agreement"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to render
investment advisory and management services with respect to that
portion of the Fund's portfolio invested in Spanish securities
and the Sub-Adviser is willing to render such services;
NOW THEREFORE, in consideration of the mutual covenants
hereinafter contained, it is hereby agreed by and between the
parties hereto as follows:
1. Appointment of Sub-Adviser. The Adviser hereby employs the
Sub-Adviser to manage the investment and reinvestment of the
assets of the Fund to be invested in Spanish securities in
accordance with the Fund's investment objectives and policies and
limitations, subject to the supervision of the Adviser and the
Board of Directors of the Fund, for the period and upon the terms
herein set forth. The investment of funds hereunder shall be
subject to all applicable restrictions of the Articles of
Incorporation and By-Laws of the Fund as may from time to time be
in force.
The Sub-Adviser accepts such employment and agrees during such
period to render such investment management services, to furnish
related office facilities and equipment and clerical, bookkeeping
and administrative services for the Fund, and to assume the
obligations herein set forth for the compensation herein
provided. The Sub-Adviser shall for all purposes herein provided
be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized, shall have no authority to act
for or represent the Fund or the Adviser in any way or otherwise
be deemed an agent of the Fund or the Adviser. It is understood
and agreed that the Sub-Adviser, by separate agreements with the
Fund, may also serve the Fund in other capacities.
2. Compensation. For the services and facilities described in
Section 1, the Adviser will pay to the Sub-Adviser at the end of
each calendar month, an investment management fee computed at an
annual rate of .35% of the Fund s average weekly net assets. For
the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis
of the number of days that the Agreement is in effect during the
month and year, respectively.
3. Non-Exclusivity of Services. The services of the Sub-Adviser
under this Agreement are not to be deemed exclusive, and the Sub-
Adviser shall be free to render similar services or other
services to others so long as its services hereunder are not
impaired thereby.
4. Net Asset Value. The net asset value of the Fund shall be
calculated in accordance with the provisions of the Fund's
prospectus or at such other time or times as the Fund's Directors
may determine in accordance with the provisions of the Investment
Company Act of 1940. On each day when net asset value is not
calculated, the net asset value of the Shares as of the close of
business on the last day on which such calculation was made for
the purpose of the foregoing computations.
5. Potential Conflicts of Interest. Subject to applicable
statutes and regulations, it is understood that directors,
officers or agents of the Fund are or may be interested in the
Sub-Adviser as officers, directors, agents, shareholders or
otherwise, and that the officers, directors, shareholders and
agents of the Sub-Adviser may be interested in the Fund otherwise
than as a director, officer or agent.
6. Standard of Care. The Sub-Adviser shall not be liable for
any error of judgment or of law or for any loss suffered by the
Fund or the Adviser in connection with the matters to which this
Agreement relates, except loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the
Sub-Adviser in the performance of its obligations and duties or
by reason of its reckless disregard of its obligations and duties
under this Agreement.
7. Duration and Termination. This Agreement shall become
effective on the date specified in Section 10 hereof and shall
remain in full force until April 1, 1998, unless sooner
terminated as hereinafter provided. This Agreement shall continue
in force from year to year thereafter, but only as long as such
continuance is specifically approved at least annually in the
manner required by the Investment Company Act of 1940 and the
rules and regulations thereunder; provided, however, that if the
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continuation of this Agreement is not approved, the Sub-Adviser
may continue to serve in such capacity in the manner and to the
extent permitted by the Investment Company Act of 1940 and the
rules and regulations thereunder.
This Agreement shall automatically terminate in the event of its
assignment or in the event of the termination of the Management
Agreement and may be terminated at any time without the payment
of any penalty by the Adviser or by the Sub-Adviser on sixty (60)
days written notice to the other party.
The terms "assignment" and "vote of a majority of the outstanding
voting securities" shall have the meanings set forth in the
Investment Company Act of 1940 and the rules and regulations
thereunder.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of there
compensation described in Section 2 earned prior to such
termination.
9. Survival. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise,
the remainder shall not be thereby affected.
10. Notices. Any notice under this Agreement shall be in
writing, addressed and delivered or mailed, postage prepaid, to
the other party at such address as such other party may designate
for the receipt of such notice.
11. Representations and Warranties.
(a) The Sub-Adviser represents and warrants that it has
applied for registration as an investment adviser under the
United States Investment Advisers Act of 1940, as amended (the
"Advisers Act").
(b) The Sub-Adviser agrees to use its best efforts to
become registered under the Advisers Act and maintain such
registration in effect during the term of this Agreement.
(c) This Agreement shall become effective on the date that
such registration under the Advisers Act becomes effective with
the United States Securities and Exchange Commission.
(d) The Sub-Adviser further represents and warrants that it
is fully qualified under the laws of Spain to perform its duties
hereunder and agrees to comply with any and all other applicable
laws and regulations in performing its obligations hereunder.
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12. Governing Law. This Agreement shall be construed in
accordance with applicable United States federal law and the laws
of the Commonwealth of Massachusetts.
13. Miscellaneous.
(a) The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction
or effect.
(b) Terms not defined herein shall have the meaning set
forth in the Fund's prospectus.
(c) This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused
this Agreement to be executed as of the day and year first above
written.
XXXXXXX XXXXXX INVESTMENTS, INC.
By:_____________________________________
ATTEST:
_________________________
BSN GESTION de PATRIMONIOS, S.A., S.G.C.
By:_____________________________________
Managing Director
ATTEST:
_________________________
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