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PARTICIPATION AGREEMENT

THIS AGREEMENT, made and entered into as of the 15th day of December, 2004

("Agreement"), by and among Principal Life Insurance Company, an Iowa life insurance company

("Insurer"), and Princor Financial Services Corporation, ("Contracts Distributor"), the principal

underwriter with respect to the Contracts referred to below (collectively, Insurer and Contracts

Distributor are referred to as the "Company"); Alliance Capital Management L.P., a Delaware

limited partnership ("Adviser"), the investment adviser of the Fund referred to below; and

AllianceBernstein Investment Research And Management, Inc., a Delaware corporation

("Distributor"), the Fund's principal underwriter (collectively, the "Parties"),

WITNESSETH THAT:

WHEREAS the Company, the Distributor, and AllianceBernstein Variable Products Series

Fund, Inc. (the "Fund") desire that Class A shares ("shares") of the Fund's Portfolios listed on

Schedule A (the "Portfolios"; reference herein to the "Fund" includes reference to each Portfolio

to the extent the context requires) be made available by Distributor to serve as underlying

investment media for those combination fixed and variable annuity contracts of the Insurer that are

the subject of Insurer's Form N-4 registration statement filed with the Securities and Exchange

Commission (the "SEC"), File No. 811-02091 (the "Contracts"), to be offered through Contracts

Distributor and other registered broker-dealer firms as agreed to by the Company; and

WHEREAS the Contracts provide for the allocation of net amounts received by the

Company to separate series (the "Divisions"); of the Insurer's "Separate Accounts" (as shown on


Schedule A-I) for investment in the shares of corresponding Portfolios of the Fund that are made
available through the Separate Account to act as underlying investment media,
NOW, THEREFORE, in consideration of the mutual benefits and promises contained
herein, the Fund and Distributor will make shares of the Portfolios available to the Company for
this purpose at net asset value and with no sales charges, all subject to the following provisions:

Section 1. Additional Portfolios

The Fund has and may, from time to time, add additional Portfolios, which will become
subject to this Agreement, if, upon the written consent of each of the Parties hereto, they are made
available as investment media for the Contracts.

Section 2. Processing Transactions

2.1	Timely Pricing and Orders.

The Adviser or its designated agent will provide closing net asset value, dividend and
capital gain information for each Portfolio to Insurer at the close of trading on each day (a
"Business Day") on which (a) the New York Stock Exchange is open for regular trading, (b) the
Fund calculates the Portfolio's net asset value and (c) Insurer is open for business. The Fund or its
designated agent will use its best efforts to provide this information by 6:00 p.m., Eastern time.
Insurer will use these data to calculate unit values, which in turn will be used to process
transactions that receive that same Business Day's Separate Account Division's unit values. Such
Separate Account processing will be done the same evening, and corresponding orders with


respect to Fund shares will be placed the morning of the following Business Day. The Company
will use its best efforts to place such orders with the Fund by 10:OO a.m., Eastern time. The parties
agree to modify the provisions of this paragraph as necessary to comply with changes in applicable
law.

2.2	Timely Payments.

The Company will transmit orders for purchases and redemptions of Fund shares to
Distributor, and will wire payment for net purchases to a custodial account designated by the Fund on
the day the order for Fund shares is placed, to the extent practicable. Payment for net redemptions
will be wired by the Fund to an account designated by the Company on the same day as the order is
placed, to the extent practicable, and in any event be made within six calendar days after the date the
order is placed in order to enable the Company to pay redemption proceeds within the time specified
in Section 22(e) of the Investment Company Act of 1940, as amended (the "1940 Act").

2.3	Redemption in Kind.

The Fund reserves the right to pay any portion of a redemption in kind of portfolio securities,
if the Fund's board of directors (the "Board of Directors") determines that it would be detrimental
to the best interests of shareholders to make a redemption wholly in cash.

2.4	Applicable Price.

The Parties agree that Portfolio share purchase and redemption orders by owners of the
Contracts ("Contractowners") resulting fiom their purchase payments, surrenders, partial
withdrawals, routine withdrawals of charges, or other transactions under the Contracts will be
executed at the net asset values as determined as of the close of regular trading on the New York


Stock Exchange (the "Close of Trading") on the Business Day that the Company receives such
orders and processes such transactions. Subject to the right of the Fund to reject any order, orders
received by the Company prior to the Close of Trading on any Business Day and transmitted to the
Distributor by 8:00 a.m. New York Time on the next Business Day will be executed by the
Distributor at the net asset value determined as of the Close of Trading on the Business Day the order
was received by the Company. For the purposes of this section, the Company shall be deemed to be
the agent of the Fund for receipt of such orders from holders or applicants of contracts, and receipt by
the Company shall constitute receipt by the Fund. Any orders received by the Company after the
Close of Trading on a Business Day and all orders that are transmitted to the Distributor after 8:00
a.m. New York City time on the next Business Day, will be executed by the Distributor at the net
asset value next determined. The Company hereby represents and warrants that it has adopted and
implemented internal controls reasonably designed to prevent orders received after the Close of
Trading on any Business Day from being submitted to the Distributor as or with orders received prior
to the Close of Trading on such Business Day. The Company hereby elects to reinvest all dividends
and capital gains distributions in additional shares of the corresponding Portfolio at the record-date
net asset values until the Company otherwise notifies the Fund in writing, it being agreed by the
Parties that the record date and the payment date with respect to any dividend or distribution will be
the same Business Day. The parties agree to modify the provisions of this paragraph as necessary to
comply with changes in applicable law.

Section 3. Costs and Expenses

3.1	General.


Except as otherwise specifically provided herein, each Party will bear all expenses incident to
its performance under this Agreement.

3.2	Registration.

The Fund will bear the cost of its registering as a management investment company under the
1940 Act and registering its shares under the Securities Act of 1933, as amended (the "1933 Act"),
and keeping such registrations current and effective; including, without limitation, the preparation of
and filing with the SEC of Forms N-SAR, N-CSR, and Rule 24f-2 Notices respecting the Fund and
its shares and payment of all applicable registration or filing fees with respect to any of the foregoing.
The Company will bear the cost of registering the Separate Account as a unit investment trust under
the 1940 Act and registering units of interest under the Contracts under the 1933 Act and keeping
such registrations current and effective; including, without limitation, the preparation and filing with
the SEC of Forms N-SAR and Rule 24f-2 Notices respecting the Separate Account and its units of
interest and payment of all applicable registration or filing fees with respect to any of the foregoing.

3.3	Other (Non-Sales-Related) Expenses.

The Fund will bear the costs of preparing, filing with the SEC and setting for printing the
Fund's prospectus, statement of additional information and any amendments or supplements thereto
(collectively, the "Fund Prospectus"), periodic reports to shareholders, Fund proxy material and
other shareholder communications and any related requests for voting instructions fiom Participants
(as defined below). The Company will bear the costs of preparing, filing with the SEC and setting
for printing, the Separate Account's prospectus, statement of additional information and any
amendments or supplements thereto (collectively,the "Separate Account Prospectus"), any


periodic reports to owners, annuitants or participants under the Contracts (collectively,
"Participants"), and other Participant communications. The Fund and the Company each will bear
the costs of printing in quantity and delivering to existing Participants the documents as to which it
bears the cost of preparation as set forth above in this Section 3.3, it being understood that reasonable
cost allocations will be made in cases where any such Fund and the Company documents are printed
or mailed on a combined or coordinated basis. The Fund will provide annual Prospectus text to
Insurer on diskette for printing and binding with the Separate Account Prospectus.

3.4	Other Sales-Related Expenses.

Expenses of distributing the Portfolio's shares and the Contracts will be paid by Contracts
Distributor and other parties, as they shall determine by separate agreement.

3.5	Parties to Cooperate.

The Adviser, the Company, Contracts Distributor, and Distributor each agrees to cooperate
with the others, as applicable, in arranging to print, mail and/or deliver combined or coordinated
prospectuses or other materials of the Fund and Separate Account.

Section 4. Legal Compliance

4.1	Tax Laws.

(a)	The Adviser will use its best efforts to qualify and to maintain qualification of each
Portfolio as a regulated investment company ("RIC") under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and the Adviser or Distributor will notify the


Company immediately upon having a reasonable basis for believing that a Portfolio has ceased to so
qualify or that it might not so qualify in the future.

(b)	The Company represents that it believes, in good faith, that the Contracts will be
treated as annuity contracts under applicable provisions of the Code and that it will make every effort
to maintain such treatment. The Company will notify the Fund and Distributor immediately upon
having a reasonable basis for believing that any of the Contracts have ceased to be so treated or that
they might not be so treated in the future.

(c)	The Fund will use its best efforts to comply and to maintain each Portfolio's
compliance with the diversification requirements set forth in Section 817(h) of the Code and Section
1.817-5(b) of the regulations under the Code, and the Fund, Adviser or Distributor will notify the
Company immediately upon having a reasonable basis for believing that a Portfolio has ceased to so
comply or that a Portfolio might not so comply in the future.

(d)	The Company represents that it believes, in good faith, that the Separate Account is a
"segregated asset account" and that interests in the Separate Account are offered exclusively through
the purchase of or transfer into a "variable contract," within the meaning of such terms under Section
817(h) of the Code and the regulations thereunder. The Company will make every effort to continue
to meet such definitional requirements, and it will notify the Fund and ~istributorimmediately upon
having a reasonable basis for believing that such requirements have ceased to be met or that they
might not be met in the future.


(e)	The Adviser will manage the Fund as a RIC in compliance with Subchapter M of the
Code and will use its best efforts to manage to be in compliance with Section 817(h) of the Code and
regulations thereunder. The Fund has adopted and will maintain procedures for ensuring that the
Fund is managed in compliance with Subchapter M and Section 817(h) and regulations thereunder.

(f)	Should the Distributor or Adviser become aware of a failure of Fund, or any of its
Portfolios, to be in compliance with Subchapter M of the Code or Section 817(h) of the Code and
regulations thereunder, they represent and agree that they will immediately notify the Company of
such in writing.

4.2	Insurance and Certain Other Laws.

(a)	The Adviser will use its best efforts to cause the Fund to comply with any applicable
state insurance laws or regulations, to the extent specificallyrequested in writing by the Company. If
it cannot comply, it will so notify Insurer in writing.

(b)	Insurer represents and warrants that (i) it is an insurance company duly organized,
validly existing and in good standing under the laws of the State of Iowa and has full corporate
power, authority and legal right to execute, deliver and perform its duties and comply with its
obligations under this Agreement, (ii) it has legally and validly established and maintains the
Separate Account as a segregated asset account under the laws of the State of Iowa, and (iii) the
Contracts comply in all material respects with all other applicable federal and state laws and
regulations.


(c)	The Company and Contracts Distributor represent and warrant that Contracts
Distributor is a business corporation duly organized, validly existing, and in good standing under the
laws of the State of Iowa and has full corporate power, authority and legal right to execute, deliver,
and perform its duties and comply with its obligations under this Agreement.

(d)	Distributor represents and warrants that it is a business corporation duly organized,
validly existing, and in good standing under the laws of the state of Delaware and has full corporate
power, authority and legal right to execute, deliver, and perform its duties and comply with its
obligations under this Agreement.

(e)	Distributor represents and warrants that the Fund is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Maryland and has full power,
authority, and legal right to execute, deliver, and perform its duties and comply with its obligations
under this Agreement.

(f)	Adviser represents and warrants that it is a limited partnership, duly organized,
validly existing and in good standing under the laws of the State of Delaware and has full power,
authority, and legal right to execute, deliver, and perform its duties and comply with its obligations
under this Agreement.

(g)	Company undertakes to comply with all anti-money laundering laws and regulations
relating to the offer and sale of Contracts. In addition, Company represents that it has instituted, and
that it follows, procedures designed to identifjl and prevent money laundering activities with respect
to the Contracts.


4.3	Securities Laws.

(a)	Insurer represents and warrants that (i) interests in the Separate Account pursuant to
the Contracts will be registered under the 1933Act to the extent required by the 1933 Act and the
Contracts will be duly authorized for issuance and sold in compliance with applicable state law, (ii)
the Separate Account is and will remain registeredunder the 1940Act to the extent required by the
1940 Act, (iii) the SeparateAccount does and will comply in all material respects with the
requirements of the 1940Act and the rules thereunder, (iv) the Separate Account's 1933 Act
registration statement relating to the Contracts, together with any amendments thereto, will, at all
times comply in all material respects with the requirements of the 1933 Act and the rules thereunder,
and (v) the Separate Account Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.

(b)	The Adviser and Distributor represent and warrant that (i) Fund shares sold pursuant
to this Agreement will be registered under the 1933 Act to the extent required by the 1933 Act and
duly authorized for issuance and sold in compliance with Maryland law, (ii) the Fund is and will
remain registered under the 1940 Act to the extent required by the 1940 Act, (iii) the Fund will
amend the registration statement for its shares under the 1933 Act and itself under the 1940Act from
time to time as required in order to effect the continuous offering of its shares, (iv) the Fund does and
will comply in all material respects with the requirements of the 1940Act and the rules thereunder,
(v) the Fund's 1933Act registration statement, together with any amendmentsthereto, will at all
times comply in all material respects with the requirements of the 1933Act and rules thereunder, and


(vi) the Fund Prospectus will at all times comply in all material respects with the requirements of the
1933 Act and the rules thereunder.

(c)	The Fund will register and qualify its shares for sale in accordance with the laws of
any state or other jurisdiction only if and to the extent reasonably deemed advisable by the Fund,
Insurer or any other life insurance company utilizing the Fund.

(d)	Distributor and Contracts Distributor each represents and warrants that it is registered
as a broker-dealer with the SEC under the SecuritiesExchange Act of 1934, as amended, and is a
member in good standing of the National Association of SecuritiesDealers Inc. (the "NASD").

4.4	Notice of Certain Proceedin~sand Other Circumstances.

(a)	Distributor or the Fund shall immediately notify the Company of (i) the issuance by
any court or regulatorybody of any stop order, cease and desist order, or other similar order with
respect to the Fund's registration statement under the 1933 Act or the Fund Prospectus, (ii) any
request by the SEC for any amendment to such registration statement or Fund Prospectus, (iii) the
. initiation of any proceedings for that purpose or for any other purpose relating to the registration or
offering of the Fund's shares, or (iv) any other action or circumstancesthat may prevent the lawful
offer or sale of Fund shares in any state or jurisdiction, including, without limitation, any
circumstances in which (x) the Fund's shares are not registered and, in all material respects, issued
and sold in accordance with applicable state and federal law or (y) such law precludes the use of such
shares as an underlying investment medium of the Contracts issued or to be issued by Insurer.
Distributor and the Fund will make every reasonable effort to prevent the issuance of any such stop


order, cease and desist order or similar order and, if any such order is issued, to obtain the lifting
thereof at the earliest possible time.

(b)	The Company shall immediately notify the Fund of (i) the issuance by any court or
regulatory body of any stop order, cease and desist order or similar order with respect to the Separate
Account's registration statement under the 1933Act relating to the Contracts or the Separate
Account Prospectus, (ii) any request by the SEC for any amendment to such registration statement or
Separate Account Prospectus, (iii) the initiation of any proceedings for that purpose or for any other
purpose relating to the registration or offering of the Separate Account interests pursuant to the
Contracts, or (iv) any other action or circumstances that may prevent the lawful offer or sale of said
interests in any state or jurisdiction, including, without limitation, any circumstances in which said
interests are not registered and, in all material respects, issued and sold in accordance with applicable
state and federal law. The Company will make every reasonable effort to prevent the issuance of any
such stop order, cease and desist order or similar order and, if any such order is issued, to obtain the
lifting thereof at the earliest possible time.

4.5	Company to Provide Documents.

Upon request, the Company will provide the Fund and the Distributor one complete copy of
SEC registration statements, Separate Account Prospectuses, reports, any preliminary and final
voting instruction solicitation material, applications for exemptions, requests for no-action letters,
and amendments to any of the above, that relate to the Separate Account or the Contracts,
contemporaneously with the filing of such document with the SEC or other regulatory authorities.

4.6	Fund to Provide Documents.


Upon request, the Fund will provide to Insurer one complete copy of SEC registration
statements, Fwd Prospectuses, reports, any preliminary and final proxy material, applications for
exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the
Fund or its shares, contemporaneouslywith the filing of such document with the SEC or other
regulatory authorities.

4.7	Market Timing

The Company agrees that it will take any and all actions reasonably necessary to ensure the
compliance by Contractowners with the Fund's policies prohibiting "market tinling," as set forth in
the Fund's current prospectus. In the event that it should come to the Company's attention that any
Contractowner is engaging in a pattern of purchases, redemptions andlor exchanges of shares of a
Fund that may evidence "market timing," the Company shall notify the Distributor of such pattern.
The Company agrees to cooperate fully with the Distributor for the purpose of preventing "market
timing", and will furnish to the Distributor such information as Distributor may consider necessary or
desirable to review the possible existence and extent of "market timing" by any Contractowner. The
Company will take any and all such actions, to the extent permitted by law, as the Distributor may
reasonably request in order to terminate any pattern of trading that the Distributor considers to be
"market timing," including, without limitation, refusing the orders of any Contractowner to purchase
or exchange shares of the Fund.

Section 5. Mixed and Shared Funding

5.1	General.


The Fund has obtained an order exempting it from certain provisions of the 1940 Act and
rules thereunder so that the Fund is available for investment by certain other entities, including,
without limitation, separate accounts funding variable life insurance policies and separate accounts of
insurance companies unaffiliated with Insurer ("Mixed and Shared Funding Order"). The Parties
recognize that the SEC has imposed terms and conditions for such orders that are substantially
identical to many of the provisions of this Section 5.

5.2	Disinterested Directors.

The Fund agrees that its Board of Directors shall at all times consist of directors a majority of
whom (the "Disinterested Directors") are not interested persons of Adviser or Distributor within the
meaning of Section 2(a)(19) of the 1940 Act.

5.3	Monitoring for Material Irreconcilable Conflicts.

The Fund agrees that its Board of Directors will monitor for the existence of any material
irreconcilable conflict between the interests of the participants in all separate accounts of life
insurance companies utilizing the Fund, including the Separate Account. The Company agrees to
inform the Board of Directors of the Fund of the existence of or any potential for any such material
irreconcilable conflict of which it is aware. The concept of a "material irreconcilable conflict" is not
defined by the 1940 Act or the rules thereunder, but the Parties recognize that such a conflict may
arise for a variety of reasons, including, without limitation:

(a)	an action by any state insurance or other regulatory authority;


(b)	a change in applicable federal or state insurance, tax or securities laws or
regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar
action by insurance, tax or securities regulatory authorities;

(c)	an administrative or judicial decision in any relevant proceeding;

(d)	the manner in which the investments of any Portfolio are being managed;

(e)	a difference in voting instructions given by variable annuity contract and variable
life insurance contract participants or by participants of different life insurance companies utilizing
the Fund; or

(f)	a decision by a life insurance company utilizing the Fund to disregard the voting
instructions of participants.

The Company will assist the Board of Directors in carrying out its responsibilities by
providing the Board of Directors with all information reasonably necessary for the Board of
Directors to consider any issue raised, including information as to a decision by the Company to
disregard voting instructions of Participants.

5.4	Conflict Remedies.

(a)	It is agreed that if it is determined by a majority of the members of the Board of
Directors or a majority of the Disinterested Directors that a material irreconcilable conflict exists, the
Company and the other life insurance companiesutilizing the Fund will, at their own expense and to
the extent reasonably practicable (as determined by a majority of the Disinterested Directors), take


whatever steps are necessary to remedy or eliminate the material irreconcilable conflict, which steps
may include, but are not limited to:

(i)	withdrawing the assets allocable to some or all of the separate accounts from the
	Fund or any Portfolio and reinvesting such assets in a different investment medium,
	including another Portfolio of the Fund, or submitting the question whether such
	segregation should be implemented to a vote of all affected participants and, as
	appropriate, segregating the assets of any particular group (e.g., annuity contract
	owners or participants, life insurance contract owners or all contract owners and
	participants of one or more life insurance companies utilizing the Fund) that votes
	in favor of such segregation, or offering to the affected contract owners or
	participants the option of making such a change; and
(ii)	establishing a new registered investment company of the type defined as a
	"Management Company" in Section 4(3) of the 1940Act or a new separate account
	that is operated as a Management Company.

(b)	If the material irreconcilable conflict arises because of Insurer's decision to disregard
Participant voting instructions and that decision represents a minority position or would preclude a
majority vote, the Company may be required, at the Fund's election, to withdraw the Separate
Account's investment in the Fund. No charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal must take place within six months after the Fund gives notice to
hsurer that this provision is being implemented, and until such withdrawal Distributor and the Fund


shall continue to accept and implement orders by Insurer for the purchase and redemption of shares
of the Fund.

(c)	If a material irreconcilable conflict arises because a particular state insurance
regulator's decision applicable to Insurer conflicts with the majority of other state regulators, then
Insurer will withdraw the Separate Account's investment in the Fund within six months after the
Fund's Board of Directors informs Insurer that it has determined that such decision has created a
material irreconcilable conflict, and until such withdrawal Distributor and Fund shall continue to
accept and implement orders by the Company for the purchase and redemption of shares of the Fund.

(d)	The Company agrees that any remedial action taken by it in resolving any material
irreconcilable conflict will be carried out at its expense and with a view only to the interests of
Participants.

(e)	For purposes hereof, a majority of the Disinterested Directors will determine whether
or not any proposed action adequately remedies any material irreconcilable conflict. In no event,
however, will the Fund or Distributor be required to establish a new funding medium for any
Contracts. The Company will not be required by the terms hereof to establish a new fbnding
medium for any Contracts if an offer to do so has been declined by vote of a majority of Participants
materially adversely affected by the material irreconcilable conflict.


5.5	Notice to the Company.

The Fund will promptly make known in writing to the Company the Board of Directors7
determination of the existence of a material irreconcilable conflict, a description of the facts that give
rise to such conflict and the implications of such conflict.

5.6	Information Requested by Board of Directors.

The Company and the Fund will at least annually submit to the Board of Directors of the
Fund such reports, materials or data as the Board of Directors may reasonably request so that the
Board of Directors may hlly carry out the obligations imposed upon it by the provisions hereof, and
said reports, materials and data will be submitted at any reasonable time deemed appropriate by the
Board of Directors. All reports received by the Board of Directors of potential or existing conflicts,
and all Board of Directors actions with regard to determining the existence of a conflict, notifying life
insurance companies utilizing the Fund of a conflict, and determining whether any proposed action
adequately remedies a conflict, will be properly recorded in the minutes of the Board of Directors or
other appropriate records, and such minutes or other records will be made available to the SEC upon
request.

5.7	Compliance with SEC Rules.

If, at any time during which the Fund is serving an investment medium for variable life
insurance policies, 1940 Act Rules 6e-3(T) or, if applicable, 6e-2 are amended or Rule 6e-3 is
adopted to provide exemptive relief with respect to mixed and shared funding, the Parties agree that
they will comply with the terms and conditions thereof and that the terms of this Section 5 shall be


deemed modified if and only to the extent required in order also to comply with the terms and
conditions of such exernptiverelief that is afforded by any of said rules that are applicable.

Section 6. Ternination
6.1	Events of Termination.
Subject to Section 6.4 below, this Agreement will terminate as to a Portfolio:

(a)	at the option of the Company or Distributorupon at least six months advance *written*
notice to the other Parties, or

(b)	at the option of the Fund upon (i) at least sixty days advance written notice to the
other parties, and (ii) approval by (x) a majority of the disinterested Directors upon a finding that a
continuation of this Contract is contrary to the best interests of the Fund, or (y) a majority vote of the
shares of the affected Portfolio in the correspondingDivision of the Separate Account (pursuant to
the procedures set forth in Section 10of this Agreement for voting Trust shares in accordancewith
Participant instructions).

(c)	at the option of the Fund upon institution of formal proceedings against the Company
by the NASD, the SEC, any state insurance regulator or any other regulatorybody regarding the
Company's obligations under this Agreement or related to the sale of the Contracts, the operation of
the Separate Account, or the purchase of the Fund shares, if, in each case, the Fund reasonably
determines that such proceedings, or the facts on which such proceedings would be based, have a
material likelihood of imposing material adverse consequenceson the Portfolio to be terminated; or


(d)	at the option of the Company upon institution of formal proceedings against the
Fund, Adviser, or Distributor by the NASD, the SEC, or any state insurance regulator or any other
regulatory body regarding the Fund's, Adviser's or Distributor's obligations under this Agreement or
related to the operation or management of the Fund or the purchase of Fund shares, if, in each case,
the Company reasonably determines that such proceedings, or the facts on which such proceedings
would be based, have a material likelihood of imposing material adverse consequences on the
Company or the Division corresponding to the Portfolio to be terminated; or

(e)	at the option of any Party in the event that (i) the Portfolio's shares are not registered
and, in all material respects, issued and sold in accordance with any applicable state and federal law
or (ii) such law precludes the use of such shares as an underlying investment medium of the
Contracts issued or to be issued by the Company; or

*(f)*	upon termination of the corresponding Division's investment in the Portfolio pursuant
to Section 5 hereof; or

(g)	at the option of the Company if the Portfolio ceases to qualify as a RIC under
Subchapter M of the Code or under successor or similar provisions; or

(h)	at the option of the Company if the Portfolio fails to comply with Section 817(h) of
the Code or with successor or similar provisions; or


(i)	at the option of the Company if the Company reasonably believes that any change in
a Fund's investment adviser or investment practices will materially increase the risks incurred by the
Company.

6.2	Funds to Remain Available.

Except (i) as necessary to implement Participant-initiatedtransactions, (ii) as required by state
insurance laws or regulations, (iii) as required pursuant to Section 5 of this Agreement, or (iv) with
respect to any Portfolio as to which this Agreement has terminated, the Company shall not (x)
redeem Fund shares attributable to the Contracts, or (y) prevent Participants from allocating
payments to or transferring amounts from a Portfolio that was otherwise available under the
Contracts, until, in either case, 30 calendar days after the Company shall have notified the Fund or
Distributor of its intention to do so.

6.3	Survival of Warranties and Indemnifications.

All warranties and indemnifications will survive the termination of this Agreement.

6.4	Continuance of Ameement for Certain Purposes.

Notwithstanding any termination of this Agreement, the Distributor shall continue to make
available shares of the Portfolios pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this Agreement (the "Existing Contracts"),
except as otherwise provided under Section 5 of this Agreement. Specifically, and without
limitation, the Distributor shall facilitate the sale and purchase of shares of the Portfolios as necessary

in order to process premium payments, surrenders and other withdrawals, and transfers or

reallocations of values under Existing Contracts.

Section 7. Parties to Cooperate Respecting Termination

The other Parties hereto agree to cooperate with and give reasonable assistance to the

Company in taking all necessary and appropriate steps for the purpose of ensuring that the Separate

Account owns no shares of a Portfolio after the final termination date with respect thereto.

Section 8. Assignment

This Agreement may not be assigned by any Party, except with the written consent of each

other Party.

Section 9. Notices

Notices and communications required or permitted by Section 2 hereof will be given by

means mutually acceptable to the Parties concerned. Each other notice or communicatioh required

or permitted by this Agreement will be given to the following persons at the following addresses

and facsimile numbers, or such other persons, addresses or facsimile numbers as the Party

receiving such notices or communications may subsequently direct in writing:

Principal Life Insurance Company

711 High Street

Des Moines, IA 50392-0300

Attn: Sarah Pitts, Counsel

FAX: 5151248-3011

Princor Financial Services Corporation

711 High Street

Des Moines, IA 50392-0300

Attn: Sarah Pitts, Counsel

FAX: 5l5I248-3Oll

AllianceBernstein Investment Research and

Management, Inc.

1345 Avenue of the Americas

New York NY 10105

Attn.: Mark R. Manley

FAX: (2 12) 969-2290

Alliance Capital Management L.P.

1345 Avenue of the Americas

New YorkNY 10105

Attn: Mark R. Manley

FAX: (2 12) 969-2290

Section 10. Voting Procedures

Subject to the cost allocation procedures set forth in Section 3 hereof, Insurer will distribute

all proxy material furnished by the Fund to Participants and will vote Fund shares in accordance with

instructions received from Participants. The Company will vote Fund shares that are (a) not

attributable to Participants or (b) attributable to Participants, but for which no instructions have been

received, in the same proportion as Fund shares for which said instructions have been received from

Participants. The Company agrees that it will disregard Participant voting instructions only to the

extent it would be permitted to do so pursuant to Rule 6e-3 (T)(b)(lS)(iii) under the 1940 Act if the

Contracts were variable life insurance policies subject to that rule. Other participating life insurance


companies utilizing the Fund will be responsible for calculating voting privileges in a manner
consistent with that of Insurer, as prescribed by this Section 10.

Section 11. Foreign Tax Credits

The Adviser agrees to consult in advance with Insurer concerning any decision to elect or not
to elect pursuant to Section 853 of the Code to pass through the benefit of any foreign tax credits to
the Fund's shareholders.

Section 12. Indemnification

12.1	Of Fund, Distributor and Adviser by Insurer.

(a)	Except to the extent provided in Sections 12.1(b) and 12.1(c), below, the Company
agrees to indemnify and hold harmless the Fund, Distributor and Adviser, each of their directors and
officers, and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of
Section 15 of the 1933 Act (collectively, the "IndemnifiedParties"for purposes of this Section 12.
1) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of Insurer) or actions in respect thereof (including, to the extent reasonable, legal
and other expenses), to which the Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or actions
are related to the sale, acquisition, or holding of the Fund's shares and:
(i)	arise out of or are based upon any untrue statement or alleged untrue statement of
	any material fact contained in the Separate Account's 1933 Act registration


	statement, the Separate Account Prospectus, the Contracts or, to the extent prepared
	by Insurer or Contracts Distributor, sales literature or advertising for the Contracts
	(or any amendment or supplement to any of the foregoing), or arise out of or are
	based upon the omission or the alleged omission to state therein a material fact
	required to be stated therein or necessary to make the statements therein not
	misleading; provided that this agreement to indemnify shall not apply as to any
	Indemnified Party if such statement or omission or such alleged statement or
	omission was made in reliance upon and in conformity with information furnished
	to Insurer or Contracts Distributor by or on behalf of the Fund, Distributor or
	Adviser for use in the Separate Account's 1933Act registration statement, the
	Separate Account Prospectus, the Contracts, or sales literature or advertising (or any
	amendment or supplement to any of the foregoing); or
(ii)	arise out of or as a result of any other statements or representations (other than
	statements or representations contained in the Fund's 1933Act registration statement,
	Fund Prospectus, sales literature or advertising of the Fund, or any amendment or
	supplement to any of the foregoing, not supplied for use therein by or on behalf of
	Insurer or Contracts Distributor) or the negligent, illegal or fraudulent conduct of the
	Company or Contracts Distributor or persons under their control (including, without
	limitation, their employees and "Associated Persons," as that term is defined in
	paragraph (m) of Article 1of the NASD's By-Laws), in connection with the sale or
	distribution of the Contracts or Fund shares; or


(iii)	arise out of or are based upon any untrue statement or alleged untrue statement of any
	material fact contained in the Fund's 1933 Act registration statement, Fund
	Prospectus, sales literature or advertising of the Fund, or any amendment or
	supplement to any of the foregoing, or the omission or alleged omission to state
	therein a material fact required to be stated therein or necessary to make the
	statements therein not misleading if such a statement or omission was made in
	reliance upon and in conformity with information furnished to the Fund, Adviser or
	Distributor by or on behalf of Insurer or Contracts Distributor for use in the Fund's
	1933 Act registration statement, ~ u n Prospectus, sales literature or advertising of the
	Fund, or any amendment or supplement to any of the foregoing; or

(iv)	arise as a result of any failure by Insurer or Contracts Distributor to perform the
	obligations, provide the services and furnish the materials required of them under the
	terms of this Agreement.

(b)	The Company shall not be liable under this Section 12.1 with respect to any losses,

claims, damages, liabilities or actions to which an Indemnified Party would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance by that Indemnified
Party of its duties or by reason of that Indemnified Party's reckless disregard of obligations or duties
under this Agreement or to Distributor or to the Fund.

(c)	The Company shall not be liable under this Section 12.1 with respect to any action
against an Indemnified Party unless the Fund, Distributor or Adviser shall have notified Insurer in
writing within a reasonable time after the summons or other first legal process giving information of


the nature of the action shall have been served upon such lndemnified Party (or after such
lndemnified Party shall have received notice of such service on any designated agent), but failure to
notify Insurer of any such action shall not relieve Insurer from any liability which it may have to the
lndemnified Party against whom such action is brought otherwise than on account of this Section 12.
1. In case any such action is brought against an Indemnified Party, Insurer shall be entitled to
participate, at its own expense, in the defense of such action. Insurer also shall be entitled to assume
the defense thereof, with counsel approved by the Indemnified Party named in the action, which
approval shall not be unreasonably delayed or withheld. After notice from Insurer to such
Indemnified Party of Insurer's election to assume the defense thereof, the Indemnified Party will
cooperate fully with Insurer and shall bear the fees and expenses of any additional counsel retained
by it, and Insurer will not be liable to such lndemnified Party under this Agreement for any legal or
other expenses subsequently incurred by such Indemnified Party independently in connection with
the defense thereof, other than reasonable costs of investigation.

12.2	Indemnification of Insurer and Contracts Distributor by Adviser.

(a)	Except to the extent provided in Sections 12.2(d) and 12.2(e),below, Adviser agrees
to indemnify and hold harmless Insurer and Contracts Distributor, each of their directors and officers,
and each person, if any, who controls Insurer or Contracts Distributor within the meaning of Section
15 of the 1933Act (collectively,the "IndemnifiedParties"for purposes of this Section 12.2)
against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the
written consent of Adviser) or actions in respect thereof (including, to the extent reasonable, legal
and other expenses) to which the Indemnified Parties may become subject under any statute, at

common law or otherwise, insofar as such losses, claims, damages, liabilities or actions are related to

the sale, acquisition, or holding of the Fund's shares and:


(i)	arise out of or are based upon any untrue statement or alleged untrue statement of
	any material fact contained in the Fund's 1933 Act registration statement, Fund
	Prospectus, sales literature or advertising of the Fund or, to the extent not prepared
	by lnsurer or Contracts Distributor, sales literature or advertising for the Contracts
	(or any amendment or supplement to any of the foregoing), or arise out of or are
	based upon the omission or the alleged omission to state therein a material fact
	required to be stated therein or necessary to make the statements therein not
	misleading; provided that this agreement to indemnify shall not apply as to any
	Indemnified Party if such statement or omission or such alleged statement or
	omission was made in reliance upon and in conformity with information hrnished to
	Distributor,Adviser or the Fund by or on behalf of lnsurer or Contracts Distributor
	for use in the Fund's 1933 Act registration statement, Fund Prospectus, or in sales
	literature or advertising (or any amendment or supplement to any of the foregoing); or

(ii)	arise out of or as a result of any other statements or representations (other than
	statements or representationscontained in the Separate Account's 1933 Act
	registration statement, Separate Account Prospectus, sales literature or advertising for
	the Contracts, or any amendment or supplement to any of the foregoing, not supplied
	for use therein by or on behalf of Distributor, Adviser, or the Fund) or the negligent,
	illegal or fraudulent conduct of the Fund, Distributor, Adviser or persons under their


	control (including, without limitation, their employees and Associated Persons), in
	connection with the sale or distribution of the Contracts or Fund shares; or

(iii)	arise out of or are based upon any untrue statement or alleged untrue statement of any
	material fact contained in the Separate Account's 1933 Act registration statement,
	Separate Account Prospectus, sales literature or advertising covering the Contracts, or
	any amendment or supplement to any of the foregoing, or the omission or alleged
	omission to state therein a material fact required to be stated therein or necessary to
	make the statements therein not misleading, if such statement or omission was made
	in reliance upon and in conformity with information furnished to Insurer or Contracts
	Distributor by or on behalf of the Fund, Distributor or Adviser for use in the Separate
	Account's 1933 Act registration statement, Separate Account Prospectus, sales
	literature or advertising covering the Contracts, or any amendment or supplement to
	any of the foregoing; or
(iv)	arise as a result of any failure by the Fund, Adviser or Distributor to perform the
	obligations, provide the services and furnish the materials required of them under the
	terms of this Agreement;

(b)	Except to the extent provided in Sections 12.2(d) and 12.2(e) hereof, Adviser agrees

to indemnify and hold harmless the Indemnified Parties from and against any and all losses, claims,

damages, liabilities (including amounts paid in settlement thereof with, except as set forth in Section

12.2(c) below, the written consent of Adviser) or actions in respect thereof (including, to the extent

reasonable, legal and other expenses) to which the Indemnified Parties may become subject directly


or indirectly under any statute, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or actions directly or indirectlyresult from or arise out of the failure of any Portfolio to
operate as a regulated investment company in compliancewith (i) Subchapter M of the Code and
regulations thereunder and (ii) Section 817(h) of the Code and regulations thereunder (except to the
extent that such failure is caused by Insurer), including, without limitation, any income taxes and
related penalties, rescission charges, liability under state law to Contract owners or Participants
asserting liability against Insurer or ContractsDistributorpursuant to the Contracts, the costs of any
ruling and closing agreement or other settlement with the Internal Revenue Service, and the cost of
any substitution by Insurer of shares of another investment company or portfolio for those of any
adversely affected Portfolio as a fundingmedium for the Separate Account that Insurer deems
necessary or appropriate as a result of the noncompliance.

(c)	The written consent of Adviser referred to in Section 12.2(b) above shall not be
required with respect to amounts paid in connection with any ruling and closing agreement or other
settlement with the Internal Revenue Service.

(d)	Adviser shall not be liableunder this Section 12.2 with respect to any losses, claims;
damages, liabilities or actions to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance,bad faith, or gross negligencein the performance by that Indemnified Party of its
duties or by reason of such Indemnified Party's reckless disregard of its obligations and duties under
this Agreement or to Insurer, Contracts Distnbutor or the Separate Account.

(e)	Adviser shall not be liable under this Section 12.2with respect to any action against
an Indemnified Party unless Insurer or Contracts Distributor shall have notified Adviser in writing

within a reasonable time after the summons or other first legal process giving information of the

nature of the action shall have been served upon such Indemnified Party (or after such Indemnified

Party shall have received notice of such service on any designated agent), but failure to notify

Adviser of any such action shall not relieve Adviser from any liability which it may have to the

Indemnified Party against whom such action is brought otherwise than on account of this Section

12.2. In case any such action is brought against an Indemnified Party, Adviser will be entitled to

participate, at its own expense, in the defense of such action. Adviser also shall be entitled to assume

the defense thereof (which shall include, without limitation, the conduct of any ruling request and

closing agreement or other settlement proceeding with the Internal Revenue Service), with counsel

approved by the Indemnified Party named in the action, which approval shall not be unreasonably

withheld. After notice froin Adviser to such Indemnified Party of Adviser's election to assume the

defense thereof, the Indemnified Party will cooperate fully with Adviser and shall bear the fees and

expenses of any additional counsel retained by it, and Adviser will not be liable to such Indemnified

Party under this Agreement for any legal or other expenses subsequently incurred by such

Indemnified Party independently in connection with the defense thereof, other than reasonable costs

of investigation.

12.3 Effect of Notice.

Any notice given by the indemnifj.lng Party to an Indemnified Party referred to in

Section 12.1(c) or 12.2(e) above of participation in or control of any action by the indemnifjmg Party

will in no event be deemed to be an admission by the indemnikng Party of liability, culpability or

responsibility, and the indemnifying Party will remain free to contest liability with respect to the

claim among the Parties or otherwise.

Section 13. Applidable Law

This Agreement will be construed and the provisions hereof interpreted under and in

accordance with New York law, without regard for that state's principles of conflict of laws.

Section 14. Execution in Countemarts

This Agreement may be executed simultaneously in two or more counterparts, each of

which taken together will constitute one and the same instrument.

Section 15. Severability

If any provision of this Agreement is held or made invalid by a court decision, statute, rule

or otherwise, the remainder of this Agreement will not be affected thereby.

Section 16. Rights Cumulative

The rights, remedies and obligations contained in this Agreement are cumulative and are in

addition to any and all rights, remedies and obligations, at law or in equity, that the Parties are

entitled to under federal and state laws.

Section 17. Restrictions on Sales of Fund Shares

The Company agrees that the Fund will be permitted (subject to the other terms of this

Agreement) to make its shares available to separate accounts of other life insurance companies.

Section 18. Headings

The Table of Contents and headings used in this Agreement are for purposes of reference

only and shall not limit or define the meaning of the provisions of this Agreement.

Section 19. Trade Names

The Advisor and the Distributor hereby consent to the Company's use of the Advisor's and

Distributor's respective trade names, logos, trademarks or service marks, as well as the names of

the Portfolios designated in Schedule A. The Company acknowledges and agrees that Adviser and

Distributor andlor their affiliates, own all right, title and interest in their respective trade names,

logos, trademarks or service marks, and covenants not, at any time, to challenge the rights of the

Adviser and Distributor and/or their affiliates to such names and/or marks. Advisor's and

Distributor's consent will terminate with the termination of this Agreement. Advisor or

Distributor may withdraw this consent as to any particular use of any such name or identifying

marks at any time (i) upon Advisor's or Distributor's reasonable determination that such use

would have a material adverse effect on the reputation or marketing efforts of Advisor, Distributor

or Funds or (ii) if no series or class of shares continues to be offered through variable insurance

contracts issued by the Company; provided however, that the Company may continue to use

materials prepared or printed prior to the withdrawal of such authorization, and provided further

that the Company shall have stickered the material to disclose that no series or class of shares

continues to be offered through the variable insurance contracts issued by the Company.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their

names and on their behalf by and through their duly authorized officers signing below.


PRINCIPAL LIFE INSURANCE COMPANY


By: &d	6w'
name: Melissa Crew
Title:	Director Product Developent


PRINCOR FINANCIAL SERVICE
CORPORATION




Title:	Vice President Product Developent


ALLIANCE CAPITAL MANAGEMENT LP




By:
Name:	Mark R. Manley
Title:	Senior Vice PresidenuDeputy
General Counsel




$Jam& Andrew Gangolf
Title:	Senior Vice President and Assistant
General Counsel