Document:

EX-10.1

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made as of the      day of March, 2006 by
and between Cooper US, Inc., a Delaware corporation (hereinafter called the “Company”), and
Name (hereinafter called “Executive”).

WHEREAS, the Company desires to employ or to continue to employ Executive on terms which will
encourage the attention and dedication of Executive to the Company as one of its key executives;

WHEREAS, the Company recognizes that the Executive’s contribution to the Company’s growth and
success has been and continues to be substantial;

WHEREAS, the Company wishes to encourage the Executive to remain with and devote full time and
attention to the business affairs of the Company and wishes to provide income protection to the
Executive for a period of time consistent with the terms and conditions hereunder;

NOW, THEREFORE, in consideration of the premises and the respective covenants of the parties
set forth in this Agreement and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties agree as follows:

1. Definitions

(a) As used herein, the term the “Company” or “Cooper” shall mean Cooper US, Inc., its parent,
affiliates, subsidiaries, divisions, agents, assigns, pension plans, compensation plans, other
benefit plans, employee benefit plan fiduciaries, predecessors-in-interest, successors-in-interest,
and any officer, director, employee, agent, or other representative of any of the foregoing.

(b) As used herein “Executive” shall mean [Executive’s name], his successors-in-interest,
predecessors-in-interest, assigns, administrators, and executors.

2. Employment by the Company. The Company offers and Executive accepts employment
consistent with Executive’s current terms and conditions except as specifically modified herein and
hereinafter set forth, and such modified terms and conditions shall supersede any conflicting oral
or written employment agreement(s) entered into by and between the Company and Executive prior to
the date of this Agreement. Unless the Executive is terminated for Cause (as defined below in
Section 9) or Executive resigns his employment for “Good Reason” (as defined below in Section 9),
Executive shall remain an employee of the Company for a period of six (6) months from the date of
this Agreement (the “Term”). Upon expiration of the Term, Executive will become an “at will”
employee of the Company. Once an “at will” employee, Executive will provide at least thirty (30)
days notice if he decides to terminate his employment. Likewise, the Company will provide at least
thirty (30) days notice of its intention to terminate Executive’s employment.

3. Duties, Obligations and Responsibilities of Executive. Executive shall be employed
as Title, reporting to such persons as may be designated by the Company at the Company’s
discretion. Executive shall assume such responsibilities and perform such duties in connection
with Executive’s position as shall from time to time be assigned to Executive. Executive shall
devote his best efforts to faithfully discharging the duties, obligations and responsibilities as
an employee of the Company as those duties, obligations and responsibilities are defined by the
Company or as may be subsequently modified by the Company. Executive shall perform such duties to
the best of Executive’s ability, experience, and talents, all to the reasonable satisfaction of the
Company. Such duties shall be rendered at such place or places as the Company shall specify.
Executive shall have such authority and power (and only such authority and power) as are inherent
in the undertakings applicable to Executive’s position and necessary to carry out the duties
required of Executive hereunder. Executive shall devote Executive’s entire working time,
attention, and energies to the business of the Company and shall accept compensation from no other
corporation, firm, partnership, or organization in return for services performed by Executive.
Executive may engage in civic or community service activities, so long as such activities do not
interfere with Executive’s ability to comply with this Agreement and are not otherwise in conflict
with the policies or interests of the Company.

4. Base Salary. As an employee of the Company, Executive shall receive a base salary
(“Base Salary”) at the same level in effect as of the date of this agreement. Base Salary payments
to Executive shall be made semi-monthly or on such other schedule as salaried employees of the
Company are paid. Future increase in the Executive’s Base Salary will be determined under the
Company’s normal salary administration policy.

5. Annual Bonus. As an Executive of the Company, Executive will be eligible to
participate in an annual bonus plan. Annual bonus awards are made at the discretion of the
Company’s Corporate Management based upon the financial results and an executive’s individual
performance. Annually, the Executive will be advised of the terms, conditions, and performance
goals in order for Executive to be eligible to receive the bonus payment.

6. Stock Incentive Plan. As an Executive of the Company, Executive shall be eligible
to participate in the Cooper Industries, Inc. Amended and Restated Stock Incentive Plan (the
“Plan”) in accordance with the terms of the Plan administered by the Management Development and
Compensation Committee.

7. Employee Benefits and Business Expenses. Executive shall be eligible to
participate in the same welfare benefit plans, including medical insurance, retirement plans or
programs maintained or sponsored by the Company for salaried employees for which Executive is
eligible pursuant to the terms and conditions of such plan or program; for vacation as provided to
other similarly situated salaried employees and shall have the same schedule of holidays as do the
employees at the Company location to which Executive is assigned; and the Company shall reimburse
Executive for reasonable travel, entertainment and other business expenses incurred by Executive in
accordance with the Company’s policies.

8. Conflicting Interest. Executive agrees that he will not accept any other
employment nor engage in any outside business activities, or become involved in an enterprise of a
commercial nature while the Executive remains an employee of the Company.

9. Termination of Employment

(a) At any time during the Term, the Company may terminate Executive’s employment for “Cause”.
In the event Executive’s employment is terminated for “Cause”, the Company shall be under no
further obligation to provide Executive with Base Salary or bonus payments and Executive will no
longer be eligible to participate in pension and welfare plans sponsored by the Company, except as
may be required by law. For the purpose of this Agreement, “Cause” includes, but is not limited
to: (i) an act or acts of personal dishonesty by the Executive and intended to result in the
personal enrichment of the Executive; (ii) wanton and willful misconduct or gross negligence by the
Executive in the performance of his duties and obligations under this Agreement; (iii) neglect of
his assigned duties, provided the Company gives Executive written notice of the basis for its
determination of neglect and thirty (30) days after such notice to remedy the situation and such
neglect is not remedied; (iv) a criminal act including, but not limited to, the arrest or
indictment for an alleged criminal act; (v) a breach of any provision of this Agreement; or (vi)
other conduct determined by the Company in good faith to be Cause.

(b) During the Term, Executive shall have the right to terminate his employment with the
Company for Good Reason (as defined below) by written notice to the Company. In the event of such
termination, or in the event the Company terminates Executive’s employment without Cause, the
Company shall pay to Executive in a lump sum within forty-five (45) days thereafter any unpaid Base
Salary, prorated target bonus and earned, unused vacation to be provided to Executive hereunder
during the Term of this Agreement. The Company shall also pay to Executive additional separation
allowance benefits for which Executive is eligible under the Company’s Separation Allowance Policy
and Procedure in effect at the time of Executive’s termination which shall be determined by
Executive’s years of continuous service at the Company and Executive’s age at the time of
Executive’s termination of employment in exchange for an executed valid and enforceable waiver in a
form determined by the Company. For purposes of this Agreement, “Good Reason” means the occurrence
of any of the following: (i) the Company materially and adversely changes Executive’s
responsibilities in a manner which constitutes a demotion when compared with Executive’s
responsibilities preceding such change or which results in Executive having a position of
significantly less scope or responsibility, or (ii) the Company materially breaches this Agreement
provided written notice of Executive’s termination is provided to the Company within thirty (30)
days of the first occurrence of the facts giving rise to the Good Reason. This provision provides
the exclusive remedy to Executive for any termination by Executive for Good Reason or by the
Company without Cause during the Term.

(c) Upon expiration of the Term (i) the Executive may resign at any time, and (ii) the Company
may terminate or modify the Executive’s employment, including salary and bonus opportunity and
amounts, in its discretion, with or without Cause, and without any liability on the part of the
Company. The Executive and the Company will each provide the other with at least thirty (30) days
written notice of a decision to terminate Executive’s employment.

(d) If after Executive’s termination, either by the Company without Cause or by the Executive
with Good Reason, the Company has a good faith reason to believe that, while employed by the
Company, the Executive breached any provision of this Agreement, any and all monies due and owing
to Executive including, but not limited to, severance payments, bonus payments, and earned but
unused vacation shall immediately cease unless and until it is determined that Executive did not
breach any provision of this Agreement while still employed by the Company.

10. Covenant Not to Compete. Executive acknowledges that the restrictions on his
activities contained in this Section 10 are in consideration of the Company’s agreement to employ
Executive for the Term, to grant Executive eligibility to participate in the Plan, and the
Company’s promise to disclose confidential and proprietary information to Executive not yet
disclosed to Executive.

So long as Executive is employed by the Company, Executive shall not assist in any way, serve
in any capacity with, or own, directly or indirectly, any interest in, a competitor of the Company
for which Executive is employed (except that Executive may hold an interest in a publicly traded
competitor not exceeding one (1) percent of the competitor’s outstanding stock). This restriction
on competition shall include those customers, markets, products and/or services for which the
Executive held responsibility during Executive’s employment and shall extend for one (1) year after
the termination of Executive’s employment with the Company and shall apply to competition conducted
in the specific geographic areas(s) or territories in which the Executive engaged in business on
behalf of the Company.

As used herein, “competitor” of the Company shall include the organizations named on the
attached Exhibit A, including any and all parent corporations, subsidiaries, joint ventures, and
successors.

The Company’s obligation to continue making severance payments under this Agreement and to
permit exercise of stock options or equity awards under the Plan is conditioned upon the
Executive’s compliance with this paragraph as written. If any provision in this paragraph is found
to be unenforceable, or if the Executive challenges the enforceability of any such provision,
Executive shall not be entitled to continuing severance payments, exercise of stock options or
receipt of Company stock issued under the Plan. In the event this restriction is deemed
unreasonable by any court, the Company and Executive agree that the court may reduce such
restriction to one it deems reasonable to protect the Company.

11. Non-Solicitation of Employees. So long as Executive is employed by the Company
and for one (1) year after Executive leaves the Company, Executive shall not, on behalf of himself
or any other person, firm, company business or other legal entity, directly or indirectly, solicit,
influence or attempt to influence any management, sales, technical design or engineering employee,
representative or advisor of the Company to terminate his or her employment relationship with the
Company and/or to work in any manner for Executive, or any entity affiliated with Executive. In the
event any court deems this restriction unreasonable, the Company and Executive agree that the court
may reduce such restriction to one it deems reasonable to protect the Company.

12. Non-Solicitation of Customers. So long as Executive is employed by the Company
and for one (1) year after Executive leaves the Company, Executive shall not, on behalf of himself,
or any other person, firm, company, business, or other legal entity, solicit, contact, call upon,
initiate communications with or attempt to initiate communications with any customer of the Company
for the purpose of selling or providing products similar to or competitive with those manufactured
by the Company entity employing Executive. In the event any court deems this restriction
unreasonable, the Company and Executive agree that the court may reduce such restriction to one it
deems reasonable to protect the Company.

13. Confidential and Proprietary Information (Secrecy Agreement). The Company agrees
to provide Executive with access to confidential and proprietary information, and may have already
provided additional confidential and proprietary information, necessary to perform Executive’s
duties for the Company. Upon the termination of Executive’s employment with the Company for
whatever reason, with or without Cause, Executive agrees to immediately return to the Company any
of the Company’s proprietary or confidential information or trade secrets in Executive’s possession
or which were provided to Executive during his employment with the Company. This includes all
copies of such information, whether in paper, electronic, or other forms.

Executive agrees during Executive’s employment and thereafter that he shall not at any time
directly or indirectly, use or disclose to any business person or enterprise in any manner
whatsoever, without the prior written consent of the CEO, any confidential or secret information of
any kind relating to the Company or of others as to which Executive knows or should know that the
Company has confidential information obligations.

For the purposes of this Agreement, proprietary or confidential information or trade secrets
(including trade secrets as defined by applicable state law) is defined to include any information
in any form whatsoever that has been developed or used by the Company during Executive’s employment
with the Company, that cannot be obtained readily by third parties from outside sources, and which
was made known to Executive or acquired by Executive during his employment with the Company.
Proprietary or confidential information or trade secrets include without limitation the following:
marketing data, including analyses and projections, strategies, business plans, product plans and
competitive activity data; all financial and profit information not required by law to be
published; purchasing or costs data; sales data including customer lists, booking reports, current
sales information, pricing, billing, and other information; products, services, present and future
developments, manufacturing process or techniques and manufacturing equipment; personnel
compensation and personnel; product specifications and designs, and manufacturing process;
information related to the cost, quantity and type of raw materials and components utilized in
products manufactured by the Company; information related to new product development and
prototypes; the Company’s contracts, bids or proposals; the names of and other information
concerning the Company’s customers that is generally not known to the public, including information
related to customer orders and preferences; proprietary computer programs and software developed
and/or used by the Company; information related to the Company’s patents, trademarks, and
copyrights, including information related to potential patent, trademark, or copyright disputes or
negotiations regarding same with competitors; and information pertaining to the Company or made
available to Executive by the Company and identified or treated as confidential or secret.

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14. Assignment of Discoveries, Improvements and Inventions. 

(a) Executive agrees that, with respect to any and all ideas, concepts, techniques,
discoveries, improvements and inventions or works of authorship (all hereinafter called
“Developments”), which Executive may conceive or make during the term of Executive’s employment,
either solely or jointly with others, whether or not such Developments are patentable, subject to
copyright protection or susceptible to any other form of protection which related to the present or
future business of the Company, or which are in the scope of Executive’s duties for the Company or
relate to work performed by Executive for the Company, Executive will assign and does hereby assign
and transfer, all of Executive’s entire right, title and interest in and to such Developments to
the Company or its designated affiliates, including its successors and assigns, except those
inventions specifically excluded by statute as more fully explained in Section (b) below.

(b) Executive further agrees upon the request of the Company to execute and deliver as
documents and do all acts necessary to secure to the Company, its successors and assigns, or its
designated affiliates or other nominees, the entire right, title and interest in and to those
ideas, concepts, techniques, discoveries, improvements and inventions referred to in paragraph (a),
including applications for and Letters Patent of the United States and foreign countries, provided
the cost of preparing such papers, assignments and applications for Letters Patent, and the
prosecution and maintenance thereof and all proceedings and litigation relating thereto, is borne
by the Company or its nominee.

15. Copyrights. Executive acknowledges that all works prepared solely or jointly with
others which related in any manner to the research, development or other business activities of the
Company shall for the purposes of U.S. copyright law be deemed “works made for hire” and all rights
therein, including copyrights or any other rights, shall be the sole property of the Company and
that such writings shall be held in confidence by Executive until written authorization to publish
is obtained from a duly designated representative of the Company. In the event that these works
are held not to be “works made for hire,” the Executive agrees to assign all right, title and
interest in the works to the Company.

16. Non-Disparagement. Executive agrees that Executive shall not for any reason
whatsoever and whether directly or indirectly, either alone or jointly with any person, firm or
corporation at any time, in any way, make disparaging statements about the Company or any of its
related entities, their products, services or employees to any person, entity, vendor, contractor,

subcontractor, competitor, customer or potential customer of the Company.

17. Employee Transfer. Executive agrees that if Executive shall accept transfer to
any of the Company’s affiliates, the term the “Company” as used herein, shall be deemed to include
each such affiliate, and this Agreement shall remain in full force and effect unless and until
superseded by a new Agreement.

18. Prior Inventions. Executive agrees and represents that listed below are
descriptions of all inventions, whether patented or not, which Executive has made or conceived
prior to being employed by the Company, and to which this Agreement is not applicable. Executive
represents that the absence of any inventions in the listing below (including stating “none”) shall
indicate that Executive owns or claims no such invention at the time of signing this Agreement.

Reserved inventions made or conceived by Executive prior to employment and excluded from this
Agreement, and brief descriptions thereof are:

If none, please state “none”.

19. Injunctive Relief. Executive agrees that in the event of any violation of this
Agreement by Executive, the Company shall be entitled, in addition to any other rights or remedies
which it might have, to maintain an action for damages and permanent injunctive relief, and in
addition the Company shall be entitled to preliminary injunctive relief, it being agreed and
understood that the substantive and irreparable damages which the Company might sustain upon any
such violation could be impossible to ascertain in advance. Executive further agrees that nothing
in this Agreement shall be construed as a limitation upon the remedies the Company might have for
any wrongs of Executive.

Executive acknowledges that any violation of his or her obligations described herein may
result in disciplinary action, including dismissal from the Company, as well as and any other
appropriate relief for the Company including money damages and equitable relief as described in the
preceding paragraph, together with associated attorney fees.

20. Amendments. This Agreement or any provisions hereof may be changed, waived,
discharged, or terminated only by a written amendment signed by both the Company and Executive.

21. Severability and Reformation. Any portion of the Agreement which a Court of
competent jurisdiction shall determine to be void or unenforceable as against public policy, or for
any other reason, shall be deemed to be severable from the Agreement and shall have no affect on
the other covenants or provisions in the Agreement. Executive further agrees that the Court shall
be empowered upon the request of the Company to reform and construe any provision which would
otherwise be void or unenforceable in a manner that it will be valid and enforceable to the maximum
extent permitted by law. Provided that, the Company’s obligation to continue making severance
payments under this Agreement is conditioned upon the Executive’s compliance with paragraph 10 of
this agreement as written.

22. Waiver. The failure of either party to enforce any provision of this Agreement
shall not in any way be construed as a waiver of any such provision as to future breaches or
violations thereof, nor prevent such party thereafter from enforcing each and every other provision
of this Agreement. The rights granted the parties hereunder are cumulative and the waiver of any
single remedy shall not constitute a waiver of such parties’ rights to assert all other legal
remedies available to it pursuant to this Agreement.

23. Arbitration. Any claim or dispute arising in connection with the Agreement which
is not settled by the parties within sixty (60) days of notice thereof first being given by either
party to the other shall be finally settled by arbitration (under the Employment Dispute Resolution
Rules of the American Arbitration Association), and judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction over it. There shall be one arbitrator,
who shall be compensated at his normal hourly or per diem rate for all time spent in connection
with the arbitration proceedings and pending final award appropriate compensation and expenses
shall be advanced equally by the parties. The arbitrator shall actively manage the arbitration to
make it fair, expeditious, economical and less burdensome and adversarial than litigation, and the
award rendered shall not include punitive damages and shall state its reasoning. The arbitrator’s
fees and expenses shall be shared equally by each party. This provision is intended to conform to
Texas law and said law may be substituted for any term of this provision that does not conform to
that law.

24. Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations, or warranties, whether oral or
written, by any officer, employee, or representative of any party hereto.

25. Anti-Assignment. This Agreement is personal in nature and cannot be assigned or
transferred except as provided in Section 26 below.

26. Successors. This Agreement shall not be terminated by the voluntary or
involuntary dissolution by the Company or by any merger or consolidation where the Company is not
the surviving corporation or upon any transfer of all or substantially all of the Company’s assets,
or any other change in control. In the event of such merger or transfer of assets, or other change
in control, the provisions of this Agreement shall be binding upon and inure to the benefit of the
surviving corporation or corporation to which such assets shall be transferred.

27. Governing Law and Venue. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the state of Texas including all matters of construction,
validity and performance. The parties further agree that any lawsuit under this Agreement must be
brought in state or federal court in Harris County, Texas.

2

IN WITNESS THEREOF, the parties have executed this Agreement as of the day and year first
written above.

EXECUTIVE

By:

Name:

Title:

COOPER US, INC.

By:

Name: David R. Sheil

Title: Sr. VP, Human Resources & Chief Administrative Officer

3PARTNERSHIP INTEREST PURCHASE AGREEMENT

     This Agreement is made and entered into as of March 1, 2006, by and between
C.R.H.C.,  Incorporated  ("CRHC"),  a Delaware  corporation,  and Capital Realty
Investors - III Limited Partnership ("CRI-III"),  a Maryland limited partnership
(CRHC and CRI-III,  collectively,  "Seller"),  and H. William Walter, Matthew J.
Walter,   David  W.  Walter  and  Steven  J.  Perkins,   jointly  and  severally
(collectively,  "Purchaser"), with respect to partnership interests in Arboretum
Villages   Limited   Partnership,   an  Illinois   limited   partnership   ("the
"Partnership").

                                   Background
                                   ----------
     CRHC  owns a 0.01%  General  Partner  interest  and  CRI-III  owns a 98.99%
Limited Partner  interest in the Partnership  (collectively,  the  "Interests"),
which partnership owns a residential rental housing property in Lisle, Illinois,
commonly known as Arboretum Village Apartments; and

     The Purchaser owns Heartland Realty Investors, Inc., which acts as property
management  agent  for  the  apartments,  so  Purchaser  acknowledges  its  past
relationship with the Partnership; and

     Seller  desires  to sell,  and  Purchaser  desires  to  purchase,  Seller's
partnership  Interests  in the  Partnership  upon and  subject  to the terms and
conditions hereinafter set forth.

                                    Agreement
                                    ---------

     NOW,  THEREFORE,  in consideration of the mutual covenants herein contained
and  other  good and  valuable  consideration,  Seller  and  Purchaser  agree as
follows:

1.   DEFINITIONS

     When used herein, the following terms shall have the following meanings:

     Agreement: This Agreement.
     ---------

     Agreement Date:  The date first written above.
     ---------------

     Closing Date:  Such date as Purchaser  and Seller may mutually  agree upon;
provided,  however, that if the Closing Date has not occurred on or before March
31, 2006,  Seller shall have the right to terminate  the  Agreement  (unless the
failure to close is the result of a default by Seller hereunder),  in which case
the  Deposit  shall be  disbursed  to Seller and  neither  party  shall have any
further obligation hereunder except as expressly set forth herein.

                                      -1-

<PAGE>

     Deposit:  The initial amount of  Twenty-five  Thousand  Dollars  ($25,000),
which shall be deposited by Purchaser  with Escrow Agent within two (2) business
days after the Agreement  Date, to be held as earnest money subject to the terms
of this Agreement.  The Deposit shall be  nonrefundable  except as expressly set
forth herein.  All interest and other  earnings on the Deposit shall be added to
and become a part thereof.  The Deposit  shall be a credit  against the Purchase
Price if closing occurs.

     Escrow Agent:  Moss & Barnett of  Minneapolis,  MN, Attn:  William A. Haug,
     ------------
Esq.

     Interests:  CRHC's 0.01%  General  Partner  interest and  CRI-III's  98.99%
     ---------
Limited Partner interest in the Partnership.

     Lender:  Citicorp Real Estate,  Inc., the holder of a first mortgage on the
     -------
Partnership's property.

     Property:  The real property and improvements located thereon, and personal
     --------
property used in connection therewith, owned by the Partnership.

     Purchase Price:  The  consideration  payable by Purchaser to Seller for the
     --------------
Interests as provided in Section 3.

2.   PURCHASE AND SALE
     -----------------

     Subject to the terms and conditions of this Agreement,  Purchaser agrees to
purchase  and acquire  from  Seller,  and Seller  agrees to sell and transfer to
Purchaser,  the Interests:  specifically,  CRHC will transfer its entire General
Partner  Interest  to H.  William  Walter and CRI-III  will  transfer is Limited
Partner  Interests  to the  Purchaser as follows:  H.  William  Walter - 28.99%;
Mathew J. Walter - 30%;  David W. Walter - 30%;  and Steven J. Perkins - 10%. No
assets of the Partnership  shall be distributed to Seller in connection with the
closing of the sale of the  Interests,  except as set forth in  Section  10.3(f)
herein.

3.   PURCHASE PRICE
     --------------

     The  Purchase  Price for the  Interests  shall be Six Million  Nine Hundred
Eighty-Eight  Thousand Seven Hundred Fifty-Three Dollars ($6,988,753) to CRI-III
and Seven Hundred  Sixty-Eight  Dollars ($768) to CRHC, payable by wire transfer
of collected  Federal  funds on the Closing  Date.  The Deposit shall be applied
against the Purchase Price at Closing.

                                      -2-

<PAGE>

4.   ESCROW
     ------

     The parties  shall  establish an escrow with the Escrow Agent through which
the transactions  contemplated  herein shall be closed. The parties shall direct
the Escrow  Agent to invest the Deposit in accounts or  securities  permitted by
Escrow Agent at the highest available rate of earnings,  which earnings shall be
added to and become a part of the Deposit. The escrow shall be auxiliary to this
Agreement,  and this  Agreement  shall not be  merged  into,  nor in any  manner
superseded by, the escrow.  The escrow costs and fees shall be paid by Purchaser
and Seller equally, with each paying one-half of the costs and fees.

5.   CONDITION OF INTERESTS
     ----------------------

     Purchaser agrees, with respect to the condition and status of the Interests
and the Partnership Property, that:

     (a)  Purchaser  is in as good a position as Seller to know the  information
relevant to its decision to purchase the Interests  because one of Purchasers is
a current  General  Partner and all Purchasers are affiliated  with the property
manager  of  the  Partnership.  Accordingly,  Purchaser  agrees  to  accept  the
Partnership  Interests and their concomitant interests in all Partnership assets
and liabilities, "AS IS, WITH ALL FAULTS."

     (b)  The  sale  of the  Interests  is  subject  only  to  Seller's  express
warranties and representations set forth in this Agreement. SELLER DISCLAIMS ANY
LIABILITIES OR WARRANTIES,  EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT.

6.   CONDITION PRECEDENT
     -------------------

     The  following  is a condition  precedent  to the  obligation  of Seller to
close:

     Purchaser  shall  either  (i) obtain  and  deliver  to Seller the  Lender's
written consent to the transaction  contemplated  herein,  releasing Seller from
any  post-Closing  Date  liabilities,  OR (ii) indemnify Seller from any and all
claims of Lender and its successors and assigns  arising out of or in connection
with the election not to obtain Lender consent to the  transaction  and/or as to
any post-closing  matters,  such  indemnification to include Seller's reasonable
attorneys' fees and costs. This  indemnification  shall be the joint and several
obligation of Purchaser and its affiliate, Heartland Realty Investors, Inc., and
shall survive closing or other termination of this Agreement.

7.   REPRESENTATIONS AND WARRANTIES OF SELLER
     ----------------------------------------

     CRHC and CRI-III each  individually  represent  and warrant to Purchaser as
follows:

                                      -3-

<PAGE>

     (a) Except for the Lender  consent  discussed in Section 6 above,  CRHC and
CRI-III  each have full  capacity  and  authority  to execute and  perform  this
Agreement  and all  documents  to be executed  by Seller  pursuant  hereto.  The
undersigned  signatory has full power and authority to execute this Agreement on
behalf of each of CRHC and CRI-III.

     (b) CRHC is the sole owner of its Interests in the  Partnership  (holding a
0.01%  General  Partner  Interest),  free  and  clear  of  any  liens,  security
interests, pledges, options or other encumbrances.  CRI-III is the sole owner of
its Interests in the Partnership  (holding a 98.99% Limited  Partner  Interest),
free and clear of any  liens,  security  interests,  pledges,  options  or other
encumbrances.

8.   REPRESENTATIONS AND WARRANTIES OF PURCHASER
     -------------------------------------------

     Purchaser each  individually  hereby  represent and warrant to Seller that,
except for the Lender  consent  discussed in Section 6 above,  the Purchaser has
full  capacity  and  authority  to execute and perform  this  Agreement  and all
documents to be executed by Purchaser pursuant hereto.

9.   BROKERAGE
     ---------

     Seller  and  Purchaser  each  warrant  and  represent  to the other that no
brokerage fee or commission  relating to this  transaction  is due to any party.
Seller and Purchaser  each agree to indemnify and hold each other  harmless from
and against  all costs  relating  to any claim by third  parties  for  brokerage
commissions,  finder's or other fees relating to the transaction contemplated in
this Agreement alleged to be due because of authorization or other action by the
indemnifying party.

10.  CLOSING
     -------

     10.1 Time and Place The transaction  contemplated hereby shall close on the
Closing Date at such date, time and place as the parties may mutually agree.

     10.2  Seller's  Deliveries  On the Closing  Date,  Seller shall  deliver to
Purchaser:

     (a) Five executed  counterpart  originals of an Assignment  and  Assumption
Agreement  with  respect to all of  Seller's  right,  title and  interest to the
Interests;

     (b) Two executed  counterpart  originals of an Amendment to the Partnership
Agreement reflecting the transfer and withdrawal of CRHC and CRI-III;

                                      -4-

<PAGE>

     (c) Two executed  counterpart  originals of an Amendment to the Certificate
of Limited  Partnership  reflecting the withdrawal of CRHC as a General Partner;
and

     (d) Such other instruments and certificates as may be reasonably  requested
by Purchaser to consummate fully the transaction contemplated hereby.

     10.3.  Purchaser's  Deliveries On the Closing Date, Purchaser shall deliver
to Seller:

     (a) The Purchase Price, payable as set forth in Section 3;

     (b) A copy of the consent of Lender to the  transaction  or an indemnity by
Purchaser and Heartland Realty Investors,  Inc. of Seller with respect to claims
of Lender;

     (c) Five executed  counterpart  originals of the  Assignment and Assumption
Agreement;

     (d) Two executed  counterpart  originals of an Amendment to the Partnership
Agreement reflecting the transfer and withdrawal of CRHC and CRI-III;

     (e) Two executed  counterpart  originals of an Amendment to the Certificate
of Limited Partnership reflecting the withdrawal of CRHC as a General Partner;

     (f) An amount to be agreed by the parties  prior to the  Closing  Date that
represents  Seller's  pro rata share of  Partnership's  2006 cash flow,  tax and
insurance escrows and replacement reserves This amount shall not be considered a
part of the  Purchase  Price,  but shall be a deemed  distribution  of cash flow
earned  prior to the Closing  Date.  Prorations  shall be based on the number of
days during the year each party owned its interests in the  Partnership  and the
parties'  respective  percentage  interests  in the  Partnership.  This  Section
10.3(f) shall survive closing; and

     (g) Such other  instruments and certificates as may be reasonably  required
by Seller to consummate fully the transaction contemplated hereby.

     In addition,  Purchaser  agrees to deliver to Seller,  within ten (10) days
after they have been  completed  by the  Partnership's  auditors,  copies of the
annual financial  statements and tax returns of the Partnership for that portion
of 2006 during which Seller was a partner.

                                      -5-

<PAGE>

     10.4.  Closing  Costs.  Purchaser  agrees  to bear any  costs  involved  in
obtaining Lender consent to the transaction, any state or local taxes imposed on
the transfer of  partnership  interests,  and any  recording  costs  involved in
amending the  Partnership  Agreement or  Partnership  Certificate to reflect the
transfers of the  Interests.  Any escrow or closing fees charged by Escrow Agent
shall be shared equally between Purchaser and Seller.

11.  BREACH AND REMEDIES
     -------------------

     11.1 Breach Seller or Purchaser,  as the case may be, shall be in breach in
the event that:

     (a) It fails to timely and duly perform any of its obligations set forth in
this Agreement (except as set forth in subsection (b) below); or

     (b) It fails or refuses to close the sale or purchase of the  Interests (as
the case may be) in a  timely  manner,  except  if the  failure  to close is (i)
specifically  excused under the terms of the Agreement  (e.g. due to the failure
of a condition  precedent to its obligation to close),  or (ii) due to breach by
the other party.

     11.2 Purchaser's Remedies In the event of a breach by Seller, Purchaser may
at its option,  after written notice to Seller  specifying the breach and giving
Seller a five (5)  business  day  cure  period,  seek  either  of the  following
remedies:

     (a)  Enforce the terms of the  Agreement  by seeking  specific  performance
hereof; or

     (b)  Terminate  the Agreement by written  notice to Seller  specifying  the
breach  and  obtain a refund of the  Deposit,  provided  there is no  concurrent
breach by Purchaser.

     Purchaser  agrees that the remedies set forth in this Section 11.2 shall be
Purchaser's only remedies,  Purchaser hereby expressly waives all other remedies
at law or in  equity,  including  without  limitation,  special,  consequential,
incidental and/or punitive damages.

     11.3 Seller's  Remedies In the event of a breach by  Purchaser,  Seller may
terminate this  Agreement by written  notice to Purchaser  specifying the breach
and  (except  in the case of a  breach  described  in  Section  11.1(b))  giving
Purchaser a five (5) business  day cure  period,  in which event Seller shall be
entitled  to retain  the  Deposit,  as  liquidated  damages,  not as a  penalty.
PURCHASER AND SELLER AGREE THAT IT WOULD BE EXTREMELY  DIFFICULT OR  IMPRACTICAL
TO QUANTIFY THE ACTUAL  DAMAGES TO SELLER IN THE EVENT OF A BREACH BY PURCHASER,
THAT THE AMOUNT OF THE DEPOSIT IS A REASONABLE  ESTIMATE OF SUCH ACTUAL DAMAGES,
AND THAT  SELLER'S  REMEDY  IN THE EVENT OF A BREACH  BY  PURCHASER  SHALL BE TO
RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES AND NOT AS PENALTY.

                                      -6-

<PAGE>

     11.4 Costs in the Event of Breach The parties agree that, in the event of a
breach of this Agreement as determined by a court of competent jurisdiction, the
party determined to be in breach shall pay all costs incurred by the other party
or parties in enforcing the remedies afforded herein including,  but not limited
to, court costs and reasonable attorneys' fees.

12.  NOTICES
     -------

     Any notice,  request or other document required or permitted to be given or
served  hereunder  shall be in writing and shall be delivered  personally or via
overnight  express  courier,  postage  prepaid,  and addressed to the parties at
their respective addresses set forth below, and the same shall be effective upon
receipt.  A party may change its  address for receipt of notices by service of a
notice of such change in accordance herewith.

         If to Purchaser:    c/o Heartland Realty Investors, Inc.
                             4802 Nicollet Avenue South
                             Minneapolis, MN  55419
                             Attn: Mr. Matthew J.  Walter, Vice President
                             Tel. No. 612 823-6275, ext. 15
                             Fax No.  612 823-3210
                             Email:  mwalter@heartland-ri.com

         If to Seller:       CRHC and/or CRI-III
                             11200 Rockville Pike, Suite 500
                             Rockville, MD  20852
                             Attn: Mr. Michael F. Murphy, Senior Vice
                                   President
                                   and
                             Office of General Counsel
                             Tel. No. 301 468-9200
                             Fax No. 301
                             468-3150 Email: mmurphy@crimail.com

13.  MISCELLANEOUS
     -------------

     13.1 Entire  Agreement;  Amendments;  Waivers This  Agreement  contains the
entire  agreement and  understanding  of the parties with respect to the subject
matter hereof, merging herein and superseding any negotiations and/or prior oral
or written  agreements  between the parties as to the  purchase  and sale of the
Interests.  This Agreement may not be amended,  modified or discharged,  nor may
any of its terms be waived,  except by an  instrument  in writing  signed by the
party to be bound thereby.

     13.2 Further Assurances The parties each agree to do, execute,  acknowledge
and deliver all such further acts,  instruments  and  assurances and to take all
such  further  action  before  or after the  closing  as shall be  necessary  or
desirable to carry out fully this  Agreement  and to  consummate  and effect the
transactions contemplated hereby.

                                      -7-

<PAGE>

     13.3 No Third Party  Benefit This  Agreement is for the sole and  exclusive
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns, and no third party is intended to or shall have any rights hereunder.

     13.4 Assignment  Purchaser may not assign its rights hereunder  without the
prior written consent of Seller, which may be withheld in its sole discretion.

     13.5 Interpretation

     (a) The  headings  and captions  herein are  inserted  for  convenience  of
reference  only and the same shall not limit  construction  of the  sections  or
paragraphs to which they apply or otherwise affect the interpretation hereof.

     (b) The terms  "include",  "including" and similar terms shall be construed
as if followed by phrase "without being limited to".

     (c) Each party hereto  certifies that it has been represented by counsel of
its own choosing in the  negotiation of this  Agreement,  and that the Agreement
shall not be construed as if either party is the maker thereof.

     13.6  Counterparts  This Agreement and any document or instrument  executed
pursuant  hereto may be  executed  in any number of  counterparts  each of which
shall be deemed an original,  but all of which together shall constitute one and
the same instrument.  A fax copy of a signature on this Agreement shall have the
same  effect as an original  provided  that an original is received by the other
party hereto within two business days thereafter.

     13.7 Time

         (a) Whenever under the terms of this Agreement the time for performance
of a covenant or condition falls upon a Saturday, Sunday or holiday, such time
for performance shall be extended to the next business day. Otherwise all
references herein to "days" shall mean calendar days.

     (b) Time is of the essence with respect to all aspects of this Agreement.

                                      -8-

<PAGE>

     13.8  Governing  Law This  Agreement  shall be governed  and  construed  in
accordance  with  the laws of the  State  of  Illinois,  without  regard  to its
conflict or choice of laws rules,  but venue for any action arising out of or in
any way  related  to this  Agreement  shall  lie in the state or  Federal  court
nearest to Rockville, Maryland.

     IN WITNESS  WHEREOF,  this  Agreement  has been  executed and  delivered by
authorized  representatives  of Seller  and  Purchaser  as of the date first set
forth above.

SELLER:                                              PURCHASER:

C.R.H.C., INCORPORATED

By:      ------------------------               --------------------------------
         Michael F. Murphy                      H. WILLIAM WALTER
Its:     Senior Vice President
         and

CAPITAL REALTY INVESTORS-III                    --------------------------------
         LIMITED PARTNERSHIP                    MATTHEW J. WALTER
By:      C.R.I., Inc.
Its:     Managing General Partner

By:      ------------------------               --------------------------------
         Michael F. Murphy                      DAVID W. WALTER
Its:     Senior Vice President

                                                --------------------------------
                                                STEVEN J. PERKINS

AGREED in his capacity as a                     AGREED as to Section 6 only:
General Partner of the Partnership:
                                                Heartland Realty Investors, Inc.

                                                By:-----------------------------
---------------------------------                     Matthew J. Walter
H. WILLIAM WALTER                               Its:  Vice President

                                      -9-

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