UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report: March 31, 2006
(Date of earliest event reported)
Paragon Real Estate Equity and Investment Trust
(Exact name of registrant as specified in its charter)
         
Maryland   0-25074   39-6594066
(State or other jurisdiction   (Commission   (I.R.S. Employer
of incorporation)   File Number)   Identification Number)
1240 Huron Road, Cleveland, Ohio 44115
(Address of principal executive offices including zip code)
(216) 430-2700
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

 

Item 1.01 Entry into a Material Definitive Agreement.
     On April 3, 2006, the Board of Trustees of Paragon authorized modifications to the individual employment agreements of James C. Mastandrea, President and Chief Executive Officer, and of John J. Dee, Senior Vice President and Chief Financial Officer. The modification agreements allow Messrs. Mastandrea and Dee to devote time to other business and personal investments while performing their duties for Paragon. The modification agreements are attached as Exhibits 10.1 and 10.2.
Item 1.02 Termination of a Material Definitive Agreement.
     On March 31, 2006, Paragon requested the return of its escrow deposit from Veard & Lowe Investments, Inc., on behalf of the various partnerships under its control, and in effect canceling the Purchase Agreement, dated September 26, 2005, among Paragon and the various partnerships.
Item 2.01 Completion of Acquisition or Disposition of Assets.
     On April 3, 2006, the Board of Trustees of Paragon authorized the transfer of its 1% ownership in Paragon Real Estate LP, the owner of Richton Trail Apartments in a suburb of Chicago, IL, to Hampton Court Associates, the limited partner of Paragon Real Estate LP. Paragon is no longer the general partner of Paragon Real Estate LP and will not be liable for the mortgage loan of approximately $2.7 million secured by the apartment property. Paragon cancelled the right of the partnership units held by Hampton Court Associates to be redeemed for cash after July 1, 2007, or at the option of Paragon, to be converted into Paragon’s common shares.
Item 9.01 Financial Statements and Exhibits.
     (d)       Exhibits
     
10.1
  Modification Agreement between Paragon Real Estate Equity and Investment Trust and James C. Mastandrea
 
   
10.2
  Modification Agreement between Paragon Real Estate Equity and Investment Trust and John J. Dee

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
             
Date: April 6, 2006   Paragon Real Estate Equity and Investment Trust  
 
           
 
    By:       /s/ John J. Dee    
 
           
 
         John J. Dee    
 
        Chief Financial Officer and Senior Vice President    

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EXHIBIT INDEX
     
Exhibit Number   Description
     
 
10.1
  Modification Agreement between Paragon Real Estate Equity and Investment Trust and James C. Mastandrea
 
   
10.2
  Modification Agreement between Paragon Real Estate Equity and Investment Trust and John J. Dee

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Exhibit 10.1
MODIFICATION AGREEMENT
     THIS MODIFICATION AGREEMENT (this “Agreement”) is made at Cleveland, Ohio, this 3rd day of April, 2006, between PARAGON REAL ESTATE EQUITY AND INVESTMENT TRUST, a Maryland business trust (the “Trust”), and JAMES C. MASTANDREA, 9520 Metcalf Road, Waite Hill, Ohio 44094 (“Mastandrea”).
WITNESSETH:
     WHEREAS, the Trust previously entered into an Employment Agreement dated March 4, 2003 (“Employment Agreement”) with Mastandrea;
     WHEREAS, at the time set forth herein, Mastandrea holds the offices of Chairman of the Board of Trustees, Chief Executive Officer and President of the Trust;
     WHEREAS, Mastandrea is expected to devote time to the business and objectives of the Trust; and
     WHEREAS, the Trust and Mastandrea desire to enter into this Agreement pursuant to which the Trust will continue to employ Mastandrea and Mastandrea will serve the Trust;
     NOW, THEREFORE, the Trust and Mastandrea, in consideration of the premises and the mutual covenants herein contained, agree as follows:
     Sections 2(c) and 2(d) shall be deleted from the Employment Agreement and the following substituted:
     2. POSITION, DUTIES, RESPONSIBILITIES.
       (c) At all times during the Contract Period, Mastandrea shall use his best efforts to direct the business and objectives of the Trust. Nothing in this Agreement shall preclude Mastandrea from devoting time to charitable and community activities, service on boards of other companies (public or private), or any other business or personal investment.
       (d) The duties to be performed by Mastandrea under this Agreement shall be performed primarily in the United States, except for travel outside the United States incident to his performance of services hereunder.
The remaining provisions of the Employment Agreement shall remain unchanged.

 

 

     IN WITNESS WHEREOF, this Agreement has been signed by the Trust and Mastandrea as of the date first above written.
         
PARAGON REAL ESTATE EQUITY AND INVESTMENT TRUST
 
       
By:
       /s/ Daryl J. Carter    
 
     
Title:
       Trustee    
 
       
By:
       /s/ James C. Mastandrea    
 
     
 
       James C. Mastandrea    

 

 

Exhibit 10.2
MODIFICATION AGREEMENT
     THIS MODIFICATION AGREEMENT (this “Agreement”) is made at Cleveland, Ohio, this 3rd day of April, 2006, between PARAGON REAL ESTATE EQUITY AND INVESTMENT TRUST, a Maryland business trust (the “Trust”), and JOHN J DEE, 26151 Pebblebrook Lane, North Olmsted, OH 44070 (“Dee”).
WITNESSETH:
     WHEREAS, the Trust previously entered into an Employment Agreement dated March 4, 2003 (“Employment Agreement”) with Dee;
     WHEREAS, at the time set forth herein, Dee holds the offices of Trustee, Senior Vice President and Chief Financial of the Trust;
     WHEREAS, Dee is expected to devote time to the business and objectives of the Trust; and
     WHEREAS, the Trust and Dee desire to enter into this Agreement pursuant to which the Trust will continue to employ Dee and Dee will serve the Trust;
     NOW, THEREFORE, the Trust and Dee, in consideration of the premises and the mutual covenants herein contained, agree as follows:
     Sections 2(c) and 2(d) shall be deleted from the Employment Agreement and the following substituted:
     2. POSITION, DUTIES, RESPONSIBILITIES.
       (c) At all times during the Contract Period, Dee shall use his best efforts to direct the business and objectives of the Trust. Nothing in this Agreement shall preclude Dee from devoting time to charitable and community activities, service on boards of other companies (public or private), or any other business or personal investment.
       (d) The duties to be performed by Dee under this Agreement shall be performed primarily in the United States, except for travel outside the United States incident to his performance of services hereunder.
The remaining provisions of the Employment Agreement shall remain unchanged.

 

 

     IN WITNESS WHEREOF, this Agreement has been signed by the Trust and Dee as of the date first above written.
         
PARAGON REAL ESTATE EQUITY AND INVESTMENT TRUST  
 
       
By:
       /s/ Daryl J. Carter    
 
     
Title:
       Trustee    
 
       
By:
       /s/ John J. Dee    
 
     
 
       John J. Dee