Exhibit 10.1
Stock Subscription Agreement
This Stock Subscription Agreement (this “Agreement”) is entered into by and
between                                          (“Investor”) and Paragon Real
Estate Equity and Investment Trust, a Maryland trust (the “Company”), as of
September 29, 2006.
     1. Sale and Purchase of Shares. Subject to the terms and conditions set
forth in this Agreement, the Company hereby sells to Investor, and Investor
hereby purchases from the Company for investment,                      shares of
the Company’s Class C convertible preferred shares of beneficial interest, $0.01
par value per share (“Stock”), issuable upon the Company’s receipt of the signed
Agreement. As consideration for the purchase of Stock, Investor hereby agrees to
pay to the Company the sum of $                     (the “Purchase Price”) in
equal quarterly installments on the first day of each quarter, beginning
September 1, 2006. The shares of Stock being purchased by Investor are referred
to as the “Subscription Shares.”
     2. Representation and Warranty of the Company. The Company represents and
warrants to Investor that the Subscription Shares, when issued, will be duly
authorized and validly issued by the Company, but not fully paid and
nonassessable until the Company receives the Purchase Price from Investor.
     3. Representations and Warranties of Investor. Investor understands that
the sale of Subscription Shares is intended to be exempt from registration under
the Securities Act of 1933, as amended (the “Securities Act”), by virtue of
Sections 3(b) and 4(2) of the Securities Act, and Investor represents and
warrants that:
          (a) Investor has been advised that the Subscription Shares have not
been registered under the Securities Act and, therefore, cannot be resold unless
they are registered under the Securities Act or unless an exemption from
registration is available and the certificates representing the subscription
shares will be legended accordingly. Investor is aware that there is a limited
market for the resale of the Subscription Shares, and that he may be required to
hold the Subscription Shares indefinitely. Investor is purchasing the
Subscription Shares for his own account for investment and not with a view to,
or for resale in connection with, the distribution thereof, and Investor has no
present intention of distributing or reselling the Subscription Shares. Investor
represents and warrants that he has such knowledge and experience in financial
and business matters that he is capable of evaluating the merits and risks of
such investment and is able to bear the economic risk of such investment.
          (b) In addition to any other legends required by any agreement or
otherwise, the certificates representing Subscription Shares shall be
conspicuously endorsed in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A PRIVATE
PLACEMENT, WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”). NO TRANSFER OF SUCH SECURITIES MAY BE MADE ON THE BOOKS OF THE
ISSUER, UNLESS ACCOMPANIED BY AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER,
THAT SUCH TRANSFER MAY PROPERLY BE MADE WITHOUT REGISTRATION UNDER THE ACT OR
THAT SUCH SECURITIES HAVE BEEN SO REGISTERED UNDER A REGISTRATION STATEMENT
WHICH IS IN EFFECT AT THE DATE OF SUCH TRANSFER. IN ADDITION, THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER PURSUANT
TO A SUBSCRIPTION AGREEMENT DATED
SEPTEMBER 29, 2006.

 

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          (c) Investor is an “accredited investor” as such term is defined in
Rule 501(a) of Regulation D of the Securities Act.
          (d) This Stock Subscription Agreement has been duly executed and
delivered by Investor and constitutes Investor’s legal, valid and binding
obligation, enforceable in accordance with its terms. If Investor does not make
a quarterly payment of the Purchase Price, Investor will return a proportionate
number of Subscription Shares.
          (e) Investor is a member of the board of trustees of the Company, has
made a complete and thorough investigation of the affairs and prospects of the
Company and has had a reasonable opportunity to ask questions of and receive
answers from a person or persons acting on behalf of the Company concerning this
investment, and all such questions have been answered to the full satisfaction
of Investor.
          (f) Investor acknowledges that the Company is entering into this
Agreement in reliance upon Investor’s representations and warranties in this
Agreement.
     4. Covenants and Representations to Survive Delivery; Assignment. All
covenants, agreements, representations and warranties made in this Agreement
will survive the delivery to Investor of the Subscription Shares and payment
therefore and, notwithstanding any investigation previously or in the future
made by Investor or on Investor’s behalf, shall continue in full force and
effect. Investor may not assign any of his rights hereunder. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the heirs, successors and permitted assigns of such party, and
all covenants, promises and agreements in this Agreement by or on behalf of the
Company, or by or on behalf of Investor, shall bind and inure to the benefit of
the heirs, successors and permitted assigns of such party hereto.
     5. Governing Law; Amendments. This Stock Subscription Agreement shall be
construed and enforced in accordance with the domestic substantive laws of the
State of Ohio without giving effect to any choice or conflict of laws provision
or rule that would cause the application of the domestic substantive laws of any
other state. This Agreement cannot be changed orally, and can be changed only by
an instrument in writing signed by the party against whom enforcement of such
change is sought.
In Witness Whereof, the parties have executed this Agreement as of the date
written above.
Paragon Real Estate Equity and Investment Trust

     
   /s/ James C. Mastandrea
 
By James C. Mastandrea, President and CEO
   

                                                                                             
By Investor:
                                                                         

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