March 23, 1998 Mr. George Gatch Managing Director Morgan Guaranty Trust Company of New York 522 Fifth Avenue New York, New York 10036 Dear Mr. Gatch: This letter sets forth the agreement between National Life Insurance Company (the "Company") and...

                                                                  Xxxxx 00, 0000

Xx. Xxxxxx Xxxxx
Managing Director
Xxxxxx Guaranty Trust Company of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000


Dear Xx. Xxxxx:

This letter sets forth the agreement between National Life Insurance Company
(the "Company") and Xxxxxx Guaranty Trust Company of New York ("Xxxxxx")
concerning certain administrative services.


1.   Administrative Services and Expenses. Administrative services for the
     Company's Separate Accounts (the "Accounts") which invest in the X.X.
     Xxxxxx Series Trust II (the "Fund") pursuant to the Participation Agreement
     among the Company and the Fund, dated March 23, 1998 (the "Participation
     Agreement"), and for purchasers of variable annuity and/or variable life
     insurance contracts (the "Contracts") issued through the Accounts, are the
     responsibility of the Company. Certain administrative services for the Fund
     in which the Accounts invest, and shareholder services for purchasers of
     shares of the Fund, are the responsibility of Xxxxxx.

     Xxxxxx recognizes the Company as the sole shareholder of record of shares
     of Portfolios offered by the Fund (the "Portfolios") purchased under the
     Participation Agreement on behalf of the Accounts. Xxxxxx further
     recognizes that it will derive a substantial savings in administrative and
     shareholder servicing expenses by virtue of having the Company as the
     shareholder of record of shares of the Fund purchased under the
     Participation Agreement, rather than multiple shareholders having record
     ownership of such shares. The administrative and shareholder servicing
     expenses for which Xxxxxx will derive such savings are set forth in
     Schedule A to this letter agreement.

2.   Expense Payments. In consideration of the anticipated administrative and
     shareholder servicing expense savings resulting from the Company's services
     set forth above, Xxxxxx agrees to pay the Company a fee (the "Fee"),
     computed daily and paid monthly in arrears, equal to the following percent
     of the daily net asset value of the shares of the Portfolios held in the
     subaccount of the Account:

        X.X. Xxxxxx International Opportunities Portfolio    .20%
        X.X. Xxxxxx Small Company Portfolio                  .20%;





     provided, however, that to the extent and for so long as assets in any one
     or more of the above listed Portfolios held in the subaccounts of the
     Accounts equal or exceed $50,000,000, calculated on a per Portfolio basis
     and not aggregated among all Portfolios (the "Requisite Amount"), the Fee
     with respect to each Portfolio containing assets at the Requisite Amount
     shall be increased to address increased expense savings as follows:

        X.X. Xxxxxx International Opportunities Portfolio    .25%
        X.X. Xxxxxx Small Company Portfolio                  .25%;

     (b) As soon as practicable after the end of each month, the company will
     send Xxxxxx, at the address and in the manner set forth in the
     Participation Agreement, a statement of the average daily net asset value
     for the preceding month of the shares of each such Portfolio as to which
     the fee stated in this Paragraph 2 is calculated, together with a statement
     of the amount of such fee. For purposes of this paragraph 2, the average
     daily net asset value of the shares of the Fund will be based on the net
     asset values reported by such Fund to the Company.

3.   Nature of Payments. The parties to this letter agreement recognize and
     agree that Xxxxxx'x payments to the Company relate to administrative and
     shareholder services only and do not constitute payment in any manner for
     investment advisory services or for costs of distribution of Contracts or
     of shares of the Fund, and that these payments are not otherwise related to
     investment advisory or distribution services or expenses. The amount of
     administrative and shareholder servicing expense payments made by Xxxxxx to
     the Company pursuant to Paragraph 2 of this letter agreement will not be
     deemed to be conclusive with respect to actual administrative and
     shareholder servicing expenses or savings of Xxxxxx.

4.   Representations. The Company represents and warrants that in performing the
     services and receiving the compensation described in this letter agreement
     it will comply with all applicable laws, rules and regulations.

5.   Term. This letter agreement will remain in full force and effect for so
     long as any assets of the Fund are attributable to amounts invested by the
     Company under the Participation Agreement, unless terminated in accordance
     with Paragraph 6 of this letter agreement. Fees will continue to be due and
     payable with respect to the shares attributable to existing Contracts for
     only so long as such payments comply with applicable laws, rules and
     regulations.

6.   Termination. This letter agreement will be terminated upon mutual agreement
     of the parties hereto in writing.





7.   Amendment. This letter agreement may be amended only upon mutual agreement
     of the parties hereto in writing.

8.   Counterparts. This letter may be executed in counterparts, each of which
     will be deemed an original but all of which will together constitute one
     and the same instrument.

If this letter agreement is consistent with your understanding of the matters we
discussed concerning administrative and shareholder servicing expenses payments,
please sign below and return a signed copy to us.


                               Very truly yours,


                        NATIONAL LIFE INSURANCE COMPANY

                        By:/s/Xxxxxx von Gal
                           _________________

                             Treasurer

Acknowledged and Agreed:


XXXXXX GUARANTY TRUST COMPANY OF NEW YORK

By:/s/Xxxxxx X. X. Xxxxx
   _____________________

    Xxxxxx X. X. Xxxxx
    Managing Director

Attachment: Schedule A





                                   SCHEDULE A


Maintenance of Books and Records
________________________________

~   Record issuance of shares
~   Record transfers (via net purchase orders)
~   Reconciliation and balancing of the separate account at the fund level in
    the general ledger, at various banks and within systems interface

Communication with the Fund
___________________________

~   Purchase Orders
    - Determination of net amount available for investment by the Fund
    - Deposit of receipts at the Fund's custodian (generally by wire transfer)
    - Notification of the custodian of the estimated amount required to pay
      dividend or distribution
~   Redemption Orders
    - Determination of net amount required for redemptions by the Fund
    - Notification of the custodian and Fund of cash required to meet payments
    - Cost of share redemption
~   Daily pricing

Processing Distributions from the Fund
______________________________________

~   Process ordinary dividends and capital gains
~   Reinvest the Fund's distributions

Report
______

~   Periodic information reporting to the Fund

Fund-related Contractowner Services
___________________________________

~   Financial consultant's advice to contractowners with respect to Fund
    inquiries (not including information about performance or related to sales)
~   Communications to contractowners regarding Fund and subaccount performance

Other Administrative Support
____________________________

~   Providing other administrative support for the Fund as mutually agreed
    between the Company and the Fund or the Adviser
~   Relieving the Fund of other usual or incidental administrative services
    provided to individual contractowners