Document:

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                             NORTH AMERICAN FUNDS
                             SUBADVISORY AGREEMENT

         AGREEMENT made as of March 10, 2000, between American General Asset
Management Corp., a Delaware corporation (the "Adviser"), and Morgan Stanley
Dean Witter Investment Management Inc., a Delaware corporation (the
"Subadviser"). In consideration of the mutual covenants contained herein, the
parties agree as follows:

1.       APPOINTMENT OF SUBADVISER

         The Subadviser undertakes to act as investment subadviser to, and,
subject to the supervision of the Trustees of North American Funds (the "Trust")
and the terms of this Agreement, to manage the investment and reinvestment of
the assets of the Portfolios specified in Appendix A to this Agreement as it
shall be amended by the Adviser and the Subadviser from time to time (the
"Portfolios"). The Subadviser will be an independent contractor and will have no
authority to act for or represent the Trust or Adviser in any way except as
expressly authorized in this Agreement or another writing by the Trust and
Adviser.

2.       SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST

a.       Subject always to the direction and control of the Trustees of the
         Trust, the Subadviser will manage the investments and determine the
         composition of the assets of the Portfolios in accordance with the
         Portfolios' registration statement, as amended. In fulfilling its
         obligations to manage the investments and reinvestments of the assets
         of the Portfolios, the Subadviser will:

         i.       obtain and evaluate pertinent economic, statistical, financial
                  and other information affecting the economy generally and
                  individual companies or industries the securities of which are
                  included in the Portfolios or are under consideration for
                  inclusion in the Portfolios;

         ii.      formulate and implement a continuous investment program for
                  each Portfolio consistent with the investment objectives and
                  related investment policies for each such Portfolio as
                  described in the Trust's registration statement, as amended;

         iii.     take whatever steps are necessary to implement these
                  investment programs by the purchase and sale of securities
                  including the placing of orders for such purchases and sales;

         iv.      regularly report to the Trustees of the Trust with respect to
                  the implementation of these investment programs; and

         v.       provide assistance to the Trust's Custodian regarding the fair
                  value of securities held by the Portfolios for which market
                  quotations are not readily available for purposes of enabling
                  the Trust's Custodian to calculate net asset value.

b.       The Subadviser, at its expense, will furnish (i) all necessary
         investment and management facilities, including salaries of personnel
         required for it to execute its duties faithfully, and (ii)
         administrative facilities, including bookkeeping, clerical personnel
         and equipment necessary for the efficient conduct of the investment
         affairs of the Portfolios (excluding determination of net asset value
         and shareholder accounting services).

c.       The Subadviser will select brokers and dealers to effect all
         transactions subject to the following conditions: The Subadviser will
         place all orders with brokers, dealers, or issuers, and will negotiate
         brokerage commissions if applicable. The Subadviser is directed at all
         times to seek to execute brokerage transactions for the Portfolios in
         accordance with such policies or practices as may be established by the
         Trustees and described in the Trust's registration statement as
         amended. The Subadviser may pay a broker-dealer which provides research
         and brokerage services a higher spread or commission for a particular
         transaction than otherwise might have been charged by another
         broker-dealer, if the Subadviser determines that the higher
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         spread or commission is reasonable in relation to the value of the
         brokerage and research services that such broker-dealer provides,
         viewed in terms of either the particular transaction or the
         Subadviser's overall responsibilities with respect to accounts managed
         by the Subadviser. The Subadviser may use for the benefit of the
         Subadviser's other clients, or make available to companies affiliated
         with the Subadviser or to its directors for the benefit of its clients,
         any such brokerage and research services that the Subadviser obtains
         from brokers or dealers. In accordance with Section 11(a) of the
         Securities Exchange Act of 1934, as amended, and Rule 11a-2-2(T)
         thereunder, and subject to any other applicable laws and regulations
         including Section 17(e) of the Investment Company Act of 1940 (the
         "Investment Company Act") and Rule 17e-1 thereunder, the Subadviser may
         engage its affiliates as broker-dealers to effect portfolio
         transactions in securities for the Portfolios.

d.       On occasions when the Subadviser deems the purchase or sale of a
         security to be in the best interest of the Portfolio as well as other
         clients of the Subadviser, the Subadviser to the extent permitted by
         applicable laws and regulations, may, but shall be under no obligation
         to, aggregate the securities to be purchased or sold to attempt to
         obtain a more favorable price or lower brokerage commissions and
         efficient execution. In such event, allocation of the securities so
         purchased or sold, as well as the expenses incurred in the transaction,
         will be made by the Subadviser in the manner the Subadviser considers
         to be the most equitable and consistent with its fiduciary obligations
         to the Portfolio and to its other clients.

e.       The Subadviser will maintain all accounts, books and records with
         respect to the Portfolios as are required of an investment adviser of a
         registered investment company pursuant to the Investment Company Act
         and Investment Advisers Act of 1940 (the "Investment Advisers Act") and
         the rules thereunder.

f.       The Subadviser, including its Access Persons (as defined in subsection
         (e) of Rule 17j-1 under the Investment Company Act), agrees to observe
         and comply with Rule 17j-1 and its Code of Ethics (which shall comply
         in all material respects with Rule 17j-1, as the same may be amended
         from time to time). On a quarterly basis, the Subadviser will either
         (i) certify to the Adviser that the Subadviser and its Access Persons
         have complied with the Subadviser's Code of Ethics with respect to the
         Portfolio or (ii) identify any material violations which have occurred
         with respect to the Portfolio. In addition, the Subadviser will report
         at least annually to the Adviser concerning any other violations of the
         Subadviser's Code of Ethics which required significant remedial action
         and which were not previously reported.

3.       COMPENSATION OF SUBADVISER

         The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.

4.       LIABILITY OF SUBADVISER

         Neither the Subadviser nor any of its affiliates, officers, partners or
employees, nor anyone who controls the Subadviser (or any of its affiliates,
officers, partners or employees) within the meaning of Section 15 of the
Securities Act of 1933 (the "1933 Act"), shall be liable to the Adviser or Trust
for any loss suffered by the Adviser or Trust resulting from any error of
judgment made in the good faith exercise of the Subadviser's investment
discretion in connection with selecting Portfolio investments except for losses
resulting from willful misfeasance, bad faith or gross negligence of, or from
reckless disregard of, the duties of the Subadviser or any of its affiliates,
partners or employees; and neither the Subadviser nor any of its affiliates,
officers, partners or employees, nor anyone who controls the Subadviser (or any
of its affiliates, officers, partners or employees) within the meaning of
Section 15 of the 1933 Act, shall be liable to the Adviser or Trust for any loss
suffered by the Adviser or Trust resulting from any other matters to which this
Agreement relates (i.e., those other matters specified in Sections 2 and 8 of
this Agreement), except for losses resulting from willful misfeasance, bad
faith, or gross negligence in the performance of, or from disregard of, the
duties of the Subadviser or any of its affiliates, partners or employees.

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5.       SUPPLEMENTAL ARRANGEMENTS

         The Subadviser may enter into arrangements with other persons
affiliated with the Subadviser to better enable it to fulfill its obligations
under this Agreement for the provision of certain personnel and facilities to
the Subadviser.

6.       CONFLICTS OF INTEREST

         It is understood that trustees, officers, agents and shareholders of
the Trust are or may be interested in the Subadviser as trustees, officers,
partners or otherwise; that directors, officers, agents and partners of the
Subadviser are or may be interested in the Trust as trustees, officers,
shareholders or otherwise; that the Subadviser may be interested in the Trust;
and that the existence of any such dual interest shall not affect the validity
hereof or of any transactions hereunder except as otherwise provided in the
Agreement and Declaration of Trust of the Trust and the Certificate of
Incorporation of the Subadviser, respectively, or by specific provision of
applicable law.

7.       REGULATION

         The Subadviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.

8.       DURATION AND TERMINATION OF AGREEMENT

         Unless sooner terminated, this Agreement will continue in effect for a
period more than two years from the date of its execution only so long as such
continuance is specifically approved at least annually either by the Trustees of
the Trust or by a majority of the outstanding voting securities of each of the
Portfolios, provided that in either event such continuance shall also be
approved by the vote of a majority of the Trustees of the Trust who are not
interested persons (as defined in the Investment Company Act) of any party to
this Agreement cast in person at a meeting called for the purpose of voting on
such approval. The required shareholder approval of the Agreement or of any
continuance of the Agreement shall be effective with respect to any Portfolio if
a majority of the outstanding voting securities of the series (as defined in
Rule 18f-2(h) under the Investment Company Act) of shares of that Portfolio
votes to approve the Agreement or its continuance, notwithstanding that the
Agreement or its continuance may not have been approved by a majority of the
outstanding voting securities of (a) any other Portfolio affected by the
Agreement or (b) all the portfolios of the Trust.

         If the shareholders of any Portfolio fail to approve the Sub-Advisory
Agreement or any continuance of the New Sub-Advisory Agreement that is submitted
to shareholders for approval, the Subadviser will continue to act as investment
subadviser with respect to such Portfolio pending the required approval of the
Agreement or its continuance or of any contract with the Subadviser or a
different adviser or subadviser or other definitive action; provided, that the
compensation received by the Subadviser in respect of such Portfolio during such
period is in compliance with Rule 15a-4 under the Investment Company Act.

         This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason.

9.       PROVISION OF CERTAIN INFORMATION BY SUBADVISER

         The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following

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events:

a.       the Subadviser fails to be registered as an investment adviser under
         the Investment Advisers Act or under the laws of any jurisdiction in
         which the Subadviser is required to be registered as an investment
         adviser in order to perform its obligations under this Agreement;

b.       the Subadviser is served or otherwise receives notice of any action,
         suit, proceeding, inquiry or investigation, at law or in equity, before
         or by any court, public board or body, involving the affairs of the
         Trust; and

c.       any change in actual control of the Subadviser, which constitutes an
         assignment of this Agreement under the Investment Company Act or the
         portfolio manager of any Portfolio.

10.      INDEMNIFICATION

a.       The Adviser agrees to indemnify and hold harmless the Subadviser from
         and against any and all claims, losses, liabilities or damages
         (including reasonable attorneys' fees and other related expenses)
         ("Losses") arising from or in connection with this Agreement or the
         performance by the Subadviser of its duties hereunder; provided,
         however, that the Subadviser shall not be indemnified hereunder for
         Losses arising from or in connection with this Agreement or the
         performance by the Subadviser of its duties hereunder resulting from
         the Subadviser's or any of its employees' willful misfeasance, bad
         faith, gross negligence or reckless disregard.

b.       The Subadviser agrees to indemnify and hold harmless the Adviser from
         and against any and all Losses arising from the Subadviser's, or any of
         its employees', affiliates', officers', or parties', willful
         malfeasance, bad faith, gross negligence, or reckless disregard in
         connection with this Agreement or the performance by the Subadviser of
         its duties hereunder; provided, however, that the Adviser shall not be
         indemnified hereunder for Losses arising from or in connection with
         this Agreement or the performance by the Adviser for its duties
         hereunder resulting from the Adviser's or any of its employees' willful
         misfeasance, bad faith, gross negligence, or reckless disregard.

11.      DISCLOSURE

         Except as otherwise provided by applicable law or this Agreement,
neither the Trust nor the Adviser shall, without the prior written consent of
the Subadviser (such consent not to be unreasonably withheld or delayed), make
available to the general public any representations regarding or references to
the Subadviser or any of its affiliates (in each case, "Disclosure") in any
disclosure document; provided, however, that the Subadviser shall be deemed to
have consented to the use of any Disclosure if (i) the Advisor has submitted
such Disclosure to the Subadviser for its approval a reasonable period of time
prior to any regulatory filing date or other deadline for the use of the
Disclosure and (ii) the Subadviser does not, within five (5) business days of
the Subadviser's receipt of such Disclosure (or such other period of time as
agreed to by the Adviser and the Subadviser), provide the Adviser with notice of
its disapproval of such Disclosure. Notwithstanding the preceding sentence, the
Adviser shall not be required to obtain the Subadviser's approval of any
Disclosure if obtaining such approval by the process described in the preceding
sentence would cause the Trust or the Adviser to violate any applicable law,
rule or regulation as reasonably determined by the Adviser or the Trustees of
the Trust. For the purposes of this Section 11, the term "affiliate" shall mean
any person controlling, controlled by or under common control with the
Subadviser.

12.      ADV

         The Adviser acknowledges receipt of the most recent current Form ADV of
the Subadviser.

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13.      PROXY VOTING

The Adviser shall be responsible for voting all proxies received by the Trust in
connection with any of the securities held in the Portfolios managed by the
Subadviser.

14.      AMENDMENTS TO THE AGREEMENT

         This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the outstanding voting
securities of each of the Portfolios affected by the amendment and by the vote
of a majority of the Trustees of the Trust who are not interested persons of any
party to this Agreement cast in person at a meeting called for the purpose of
voting on such approval. The required shareholder approval shall be effective
with respect to any Portfolio if a majority of the outstanding voting securities
of that Portfolio vote to approve the amendment, notwithstanding that the
amendment may not have been approved by a majority of the outstanding voting
securities of (a) any other Portfolio affected by the amendment or (b) all the
portfolios of the Trust.

15.      ENTIRE AGREEMENT

         This Agreement contains the entire understanding and agreement of the
parties.

16.      HEADINGS

         The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

17.      NOTICES

         All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or
applicable party in person or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this paragraph.

18.      SEVERABILITY

         Should any portion of this Agreement for any reason be held to be void
in law or in equity, the Agreement shall be construed, insofar as is possible,
as if such portion had never been contained herein.

19.      GOVERNING LAW

         The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, or any of the
applicable provisions of the Investment Company Act. To the extent that the laws
of The Commonwealth of Massachusetts, or any of the provisions in this
Agreement, conflict with applicable provisions of the Investment Company Act,
the latter shall control.

20.      LIMITATION OF LIABILITY

         The Amended and Restated Agreement and Declaration of Trust dated
February 18, 1994, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of The Commonwealth of
Massachusetts, provides that the name "North American Funds" refers to the
Trustees under the

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Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of the Trust shall be held
to any personal liability, nor shall resort be had to their private property,
for the satisfaction of any obligation or claim, in connection with the affairs
of the Trust or any portfolio thereof, but only the assets belonging to the
Trust, or to the particular portfolio with which the obligee or claimant dealt,
shall be liable.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.

                                    American General Asset Management Corp.

                                    by:
                                        ----------------------------

                                    Morgan Stanley Dean Witter Investment
                                    Management Inc.

                                    by:
                                        ----------------------------

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                                  APPENDIX A
                                  ----------

         The Subadviser shall serve as investment subadviser for the following
portfolio of the Trust. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement, the fee computed
separately for each such Portfolio at an annual rate as follows (the "Subadviser
Percentage Fee"):

         International Equity Portfolio: .50% of the first $50,000,000, .45%
         between $50,000,000 and $200,000,000, .40% between $200,000,000 and
         $500,000,000 and .35% on the excess over $500,000,000 of the average
         net assets of the Portfolio;

         The Subadviser Percentage Fee for each Portfolio shall be accrued for
each calendar day and the sum of the daily fee accruals shall be paid monthly to
the Subadviser. The daily fee accruals will be computed by multiplying the
fraction of one over the number of calendar days in the year by the applicable
annual rate described in the preceding paragraph, and multiplying this product
by the net assets of the Portfolio as determined in accordance with the Trust's
prospectus and statement of additional information as of the close of business
on the previous business day on which the Trust was open for business.

         If this Agreement becomes effective or terminates before the end of any
month, the fee (if any) for the period from the effective date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.

                                       7<PAGE>

                              NORTH AMERICAN FUNDS
                             SUBADVISORY AGREEMENT

     AGREEMENT made as of March 10, 2000, between American General Asset
Management Corp., a Delaware corporation (the "Adviser"), and INVESCO Funds
Group, Inc., a Delaware corporation (the "Subadviser"). In consideration of the
mutual covenants contained herein, the parties agree as follows:

1.   APPOINTMENT OF SUBADVISER

     The Subadviser undertakes to act as investment subadviser to, and, subject
to the supervision of the Trustees of North American Funds (the "Trust") and the
terms of this Agreement, to manage the investment and reinvestment of the assets
of the Portfolios specified in Appendix A to this Agreement as it shall be
amended by the Adviser and the Subadviser from time to time (the "Portfolios").
The Subadviser will be an independent contractor and will have no authority to
act for or represent the Trust or Adviser in any way except as expressly
authorized in this Agreement or another writing by the Trust and Adviser.

2.   SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST

a.   Subject always to the direction and control of the Trustees of the Trust,
     the Subadviser will manage the investments and determine the composition of
     the assets of the Portfolios in accordance with the Portfolios'
     registration statement, as amended. In fulfilling its obligations to manage
     the investments and reinvestments of the assets of the Portfolios, the
     Subadviser will:

     i.   obtain and evaluate pertinent economic, statistical, financial and
          other information affecting the economy generally and individual
          companies or industries the securities of which are included in the
          Portfolios or are under consideration for inclusion in the Portfolios;

     ii.  formulate and implement a continuous investment program for each
          Portfolio consistent with the investment objectives and related
          investment policies for each such Portfolio as described in the
          Trust's registration statement, as amended;

     iii. take whatever steps are necessary to implement these investment
          programs by the purchase and sale of securities including the placing
          of orders for such purchases and sales;

     iv.  regularly report to the Trustees of the Trust with respect to the
          implementation of these investment programs; and

     v.   provide assistance to the Trust's Custodian regarding the fair value
          of securities held by the Portfolios for which market quotations are
          not readily available for purposes of enabling the Trust's Custodian
          to calculate net asset value.

b.   The Subadviser, at its expense, will furnish (i) all necessary investment
     and management facilities, including salaries of personnel required for it
     to execute its duties faithfully, and (ii) administrative facilities,
     including bookkeeping, clerical personnel and equipment necessary for the
     efficient conduct of the investment affairs of the Portfolios (excluding
     determination of net asset value and shareholder accounting services).

c.   The Subadviser will select brokers and dealers to effect all transactions
     subject to the following conditions: The Subadviser will place all orders
     with brokers, dealers, or issuers, and will negotiate brokerage commissions
     if applicable. The Subadviser is directed at all times to seek to execute
     brokerage transactions for the Portfolios in accordance with such policies
     or practices as may be established by the Trustees and described in the
     Trust's registration statement as amended. The Subadviser may pay a
     broker-dealer which provides research and brokerage services a higher
     spread or commission for a particular transaction than otherwise might have
     been charged by another broker-dealer, if the Subadviser determines that
     the higher spread or commission is reasonable in relation to the value of
     the brokerage and research services that such
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     broker-dealer provides, viewed in terms of either the particular
     transaction or the Subadviser's overall responsibilities with respect to
     accounts managed by the Subadviser. The Subadviser may use for the benefit
     of the Subadviser's other clients, or make available to companies
     affiliated with the Subadviser or to its directors for the benefit of its
     clients, any such brokerage and research services that the Subadviser
     obtains from brokers or dealers.

d.   On occasions when the Subadviser deems the purchase or sale of a security
     to be in the best interest of the Portfolio as well as other clients of the
     Subadviser, the Subadviser to the extent permitted by applicable laws and
     regulations, may, but shall be under no obligation to, aggregate the
     securities to be purchased or sold to attempt to obtain a more favorable
     price or lower brokerage commissions and efficient execution. In such
     event, allocation of the securities so purchased or sold, as well as the
     expenses incurred in the transaction, will be made by the Subadviser in the
     manner the Subadviser considers to be the most equitable and consistent
     with its fiduciary obligations to the Portfolio and to its other clients.

e.   The Subadviser will maintain all accounts, books and records with respect
     to the Portfolios as are required by paragraphs (b)(5), (6), (7), (9), (10)
     and (11) of Rule 31a-1 under the Investment Company Act of 1940 (the
     "Investment Company Act") and Investment Advisers Act of 1940 (the
     "Investment Advisers Act") and the rules thereunder.

f.   The Subadviser, including its Access Persons (as defined in subsection (e)
     of Rule 17j-1 under the Investment Company Act), agrees to observe and
     comply with Rule 17j-1 and its Code of Ethics (which shall comply in all
     material respects with Rule 17j-1, as the same may be amended from time to
     time). On a quarterly basis, the Subadviser will either (i) certify to the
     Adviser that the Subadviser and its Access Persons have complied with the
     Subadviser's Code of Ethics with respect to the Portfolio or (ii) identify
     any material violations which have occurred with respect to the Portfolio.
     In addition, the Subadviser will report at least annually to the Adviser
     concerning any other violations of the Subadviser's Code of Ethics which
     required significant remedial action and which were not previously
     reported.

3.   COMPENSATION OF SUBADVISER

     The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.

4.   LIABILITY OF SUBADVISER

     Neither the Subadviser nor any of its employees shall be liable to the
Adviser or Trust for any loss suffered by the Adviser or Trust resulting from
any error of judgment made in the good faith exercise of the Subadviser's
investment discretion in connection with selecting Portfolio investments except
for losses resulting from willful misfeasance, bad faith or gross negligence of,
or from reckless disregard of, the duties of the Subadviser or any of its
partners or employees; and neither the Subadviser nor any of its employees shall
be liable to the Adviser or Trust for any loss suffered by the Adviser or Trust
resulting from any other matters to which this Agreement relates (i.e., those
other matters specified in Sections 2 and 8 of this Agreement), except for
losses resulting from willful misfeasance, bad faith, or gross negligence in the
performance of, or from disregard of, the duties of the Subadviser or any of its
partners or employees.

5.   SUPPLEMENTAL ARRANGEMENTS

     The Subadviser may enter into arrangements with other persons affiliated
with the Subadviser to better enable it to fulfill its obligations under this
Agreement for the provision of certain personnel and facilities to the
Subadviser.

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6.   CONFLICTS OF INTEREST

     It is understood that trustees, officers, agents and shareholders of the
Trust are or may be interested in the Subadviser as trustees, officers, partners
or otherwise; that directors, officers, agents and partners of the Subadviser
are or may be interested in the Trust as trustees, officers, shareholders or
otherwise; that the Subadviser may be interested in the Trust; and that the
existence of any such dual interest shall not affect the validity hereof or of
any transactions hereunder except as otherwise provided in the Agreement and
Declaration of Trust of the Trust and the Certificate of Incorporation of the
Subadviser, respectively, or by specific provision of applicable law.

7.   REGULATION

     The Subadviser shall submit to all regulatory and administrative bodies
having jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.

8.   DURATION AND TERMINATION OF AGREEMENT

     Unless sooner terminated, this Agreement will continue in effect for a
period more than two years from the date of its execution only so long as such
continuance is specifically approved at least annually either by the Trustees of
the Trust or by a majority of the outstanding voting securities of each of the
Portfolios, provided that in either event such continuance shall also be
approved by the vote of a majority of the Trustees of the Trust who are not
interested persons (as defined in the Investment Company Act) of any party to
this Agreement cast in person at a meeting called for the purpose of voting on
such approval. The required shareholder approval of the Agreement or of any
continuance of the Agreement shall be effective with respect to any Portfolio if
a majority of the outstanding voting securities of the series (as defined in
Rule 18f-2(h) under the Investment Company Act) of shares of that Portfolio
votes to approve the Agreement or its continuance, notwithstanding that the
Agreement or its continuance may not have been approved by a majority of the
outstanding voting securities of (a) any other Portfolio affected by the
Agreement or (b) all the portfolios of the Trust.

     If the shareholders of any Portfolio fail to approve the New Sub-Advisory
Agreement the Subadviser will continue to act as investment subadviser with
respect to such Portfolio pending the required approval of the Agreement or its
continuance or of any contract with the Subadviser or a different adviser or
subadviser or other definitive action; provided, that the compensation received
by the Subadviser in respect of such Portfolio during such period is in
compliance with Rule 15a-4 under the Investment Company Act.

     This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Adviser or Subadviser on sixty days' written notice to the Trust and the other
party. This agreement will automatically terminate, without the payment of any
penalty, in the event of its assignment (as defined in the Investment Company
Act) or in the event the Advisory Agreement between the Adviser and the Trust
terminates for any reason.

9.   PROVISION OF CERTAIN INFORMATION BY SUBADVISER

     The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:

a.   the Subadviser fails to be registered as an investment adviser under the
     Investment Advisers Act or under the laws of any jurisdiction in which the
     Subadviser is required to be registered as an investment adviser in order
     to perform its obligations under this Agreement;

                                       3
<PAGE>

b.   the Subadviser is served or otherwise receives notice of any action, suit,
     proceeding, inquiry or investigation, at law or in equity, before or by any
     court, public board or body, involving the affairs of the Trust; and

c.   any change in actual control or management of the Subadviser or the
     portfolio manager of any Portfolio.

10.  PROVISION OF CERTAIN INFORMATION BY THE ADVISER

     The Adviser shall furnish the Subadviser with copies of the Trust's
Prospectus and Statement of Additional Information, and any reports made by the
Trust to its shareholders, as soon as practicable after such documents become
available. The Adviser shall furnish the Subadviser with any further documents,
materials or information that the Subadviser may reasonably request to enable it
to perform its duties pursuant to this Agreement.

11.  SERVICES TO OTHER CLIENTS

     The Adviser understand, and has advised the Trust's Board of Trustees, that
the Subadviser now acts, or may in the future act, as an investment adviser to
fiduciary and other managed accounts and as investment adviser or subadviser to
other investment companies. Further, the Adviser understands, and has advised
the Trust's Board of Trustees that the Subadviser and its affiliates may give
advice and take action for its accounts, including investment companies, which
differs from advice given on the timing or nature of action taken for the
Portfolio. The Subadviser is not obligated to initiate transaction for the
Portfolio in any security which the Subadviser, its principals, affiliates or
employees may purchase or sell for their own accounts or other clients.

12.  AMENDMENTS TO THE AGREEMENT

     This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the outstanding voting
securities of each of the Portfolios affected by the amendment and by the vote
of a majority of the Trustees of the Trust who are not interested persons of any
party to this Agreement cast in person at a meeting called for the purpose of
voting on such approval. The required shareholder approval shall be effective
with respect to any Portfolio if a majority of the outstanding voting securities
of that Portfolio vote to approve the amendment, notwithstanding that the
amendment may not have been approved by a majority of the outstanding voting
securities of (a) any other Portfolio affected by the amendment or (b) all the
portfolios of the Trust.

13.  ENTIRE AGREEMENT

     This Agreement contains the entire understanding and agreement of the
parties.

14.  HEADINGS

     The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.

15.  NOTICES

     All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or
applicable party in person or by registered mail or a private mail or delivery
service providing the sender with notice of receipt. Notice shall be deemed
given on the date delivered or mailed in accordance with this paragraph.

                                       4
<PAGE>

16.  SEVERABILITY

     Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.

17.  GOVERNING LAW

     The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, or any of the
applicable provisions of the Investment Company Act. To the extent that the laws
of The Commonwealth of Massachusetts, or any of the provisions in this
Agreement, conflict with applicable provisions of the Investment Company Act,
the latter shall control.

18.  LIMITATION OF LIABILITY

     The Amended and Restated Agreement and Declaration of Trust dated February
18, 1994, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of The Commonwealth of
Massachusetts, provides that the name "North American Funds" refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of the
Trust shall be held to any personal liability, nor shall resort be had to their
private property, for the satisfaction of any obligation or claim, in connection
with the affairs of the Trust or any portfolio thereof, but only the assets
belonging to the Trust, or to the particular portfolio with which the obligee or
claimant dealt, shall be liable.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
under seal by their duly authorized officers as of the date first mentioned
above.

                                         American General Asset Management Corp.

                                         by:  ______________________________

                  `                      INVESCO Funds Group, Inc.

                                         by:  ______________________________

                                       5
<PAGE>

                                   APPENDIX A

     The Subadviser shall serve as investment subadviser for the following
portfolios of the Trust. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement, the fee computed
separately for each such Portfolio at an annual rate as follows (the "Subadviser
Percentage Fee"):

     Mid Cap Growth Fund: .550% of the first $50,000,000, .500% between
     $50,000,000 and $100,000,000, .450% between $100,000,000 and $250,000,000,
     .400% between $250,000,000 and $500,000,000 and .350% on the excess over
     $500,000,000 of the average net assets of the Fund.

     Balanced Fund : .400% of the first $50,000,000, .400% between $50,000,000
     and $100,000,000, .350% between $100,000,000 and $250,000,000 and .300% on
     the excess over $250,000,000 of the average net assets of the Fund.

     The Subadviser Percentage Fee for each Portfolio shall be accrued for each
calendar day and the sum of the daily fee accruals shall be paid monthly to the
Subadviser. The daily fee accruals will be computed by multiplying the fraction
of one over the number of calendar days in the year by the applicable annual
rate described in the preceding paragraph, and multiplying this product by the
net assets of the Portfolio as determined in accordance with the Trust's
prospectus and statement of additional information as of the close of business
on the previous business day on which the Trust was open for business.

If this Agreement becomes effective or terminates before the end of any month,
the fee (if any) for the period from the effective date to the end of such month
or from the beginning of such month to the date of termination, as the case may
be, shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.

                                       6

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