SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): March 4, 2003

STONEHAVEN REALTY TRUST
(Exact name of Registrant as specified in its charter)

Maryland	0-25074	39-6594066
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

5620 Smetana Drive Minneapolis, Minnesota	55343
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (952) 935-5411

Item 5. Other Events.

On March 4, 2003, the Board of Trustees unanimously approved Stonehaven Realty Trust (“Stonehaven”) entering into an Asset Contribution Agreement (the “Agreement”) with Hampton Court Associates, LP (“Hampton”), an affiliate of Paragon Real Estate Development, LLC (“Paragon”).

Pursuant to the transactions contemplated by the Agreement, Paragon will arrange for the contribution of apartment buildings owned by Hampton to a newly established UPREIT of Stonehaven (Paragon Real Estate LP) in exchange for 813,938 restricted units in the UPREIT, each unit being convertible after four years into 22.881 shares of Stonehaven’s common stock. In addition, Stonehaven intends to offer the shareholders of its Class A Preferred Stock a one-time incentive to convert each share into 22.881 shares of Stonehaven’s common stock.. As part of the conversion, the shareholders of Class A Preferred Stock will consent to waive the dividend payable in April 2003 and eliminate any future dividends that would have been payable.

In connection with the signing of the Agreement, Stonehaven appointed the following new trustees to its Board of Trustees: James C. Mastandrea, John J. Dee, Daniel G. DeVos, and Michael T. Oliver. In addition, Mr. Mastandrea was appointed President and Mr. Dee was appointed Senior Vice President of Stonehaven pursuant to separate incentive based employment agreements with non-compete provisions. Messrs. Mastandrea and Dee are also entitled to receive additional shares of Stonehaven’s capital stock pursuant to separate restricted share agreements and an additional contribution agreement. The stock they receive under both of these agreements is restricted until Stonehaven achieves growth in assets for the restricted share agreements, and increases in net operating income and funds from operations for the additional contribution agreement.

Various components of the transactions contemplated by the Agreement are subject to shareholder approval. Stonehaven intends to file a proxy statement for a shareholder meeting as well as a registration statement related to the one-time incentive exchange offer for the Class A Preferred Stock.

As part of the Agreement, existing management has agreed to vote their shares in favor of the transactions contemplated by the Agreement and to convert their Class A Preferred Stock in the exchange offer. In addition, the independent trustees of the Board of Trustees have unanimously approved and existing management has agreed to an option and put agreement to purchase the Minnesota properties currently held by Stonehaven. Existing management, Paragon, Hampton and Messrs. Mastandrea and Dee have also agreed to certain transfer restrictions with respect to their shares of Stonehaven’s capital stock.

Upon closing of the transactions contemplated by the Agreement, Stonehaven intends to relocate its Corporate Headquarters to Cleveland, Ohio, and change its name to Paragon Real Estate Equity and Investment Trust.

The consummation of the transactions contemplated by the Agreement is subject to various closing conditions and SEC clearance, which is anticipated to be completed in the second quarter of 2003.

This description of the Agreement and the transactions contemplated thereby is qualified in its entirety by reference to the full text of the Agreement and the other transaction documents which are attached hereto as an Exhibit and incorporated herein by reference.

Item 7. Financial Statements and Exhibits.

Exhibits

2.1	Asset Contribution Agreement.

2.2	Voting and Stock Restriction Agreement.

2.3	Employment Agreement of James C. Mastandrea.

2.4	Employment Agreement of John J. Dee.

2.5	Restricted Share Agreement of James C. Mastandrea.

2.6	Restricted Share Agreement of John J. Dee.

2.7	Additional Contribution Agreement.

2.8	Modification Agreement.

2.9	Amendment No. 1 to the Partnership Agreement of Wellington Properties Investment, L.P.

2.10	Form of Limited Partnership Agreement of Paragon Real Estate, L.P.

99	Press release. The contents of Internet addresses included in such press release are not incorporated by reference into the press release or this filing.

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, thereunto duly authorized.

	STONEHAVEN REALTY TRUST


		By:	/s/ Duane H. Lund
			Duane H. Lund Executive Officer

Date: March 4, 2003

Exhibit 2.1

ASSET CONTRIBUTION AGREEMENT

BY AND AMONG

HAMPTON COURT ASSOCIATES, L.P.,

PARAGON REAL ESTATE, L.P.,

AND

STONEHAVEN REALTY TRUST

EFFECTIVE AS OF THE DAY OF MARCH, 2003

TABLE OF CONTENTS

1.	DEFINITIONS

1.1	DEFINITIONS

2.	CONTRIBUTION OF ASSETS; CONTRIBUTION CONSIDERATION; CLOSING

2.1	CONTRIBUTION OF ASSETS
2.2	CONTRIBUTION CONSIDERATION
2.3	ASSUMED LIABILITIES
2.4	CLOSING
2.5	CLOSING OBLIGATIONS
2.6	FURTHER ASSURANCES

3.	REPRESENTATIONS AND WARRANTIES OF HAMPTON

3.1	ORGANIZATION AND GOOD STANDING
3.2	ENFORCEABILITY; AUTHORITY; NO CONFLICT
3.3	FINANCIAL STATEMENTS
3.4	TITLE TO PROPERTIES; ENCUMBRANCES
3.5	CONDITION AND SUFFICIENCY OF ASSETS
3.6	NO UNDISCLOSED LIABILITIES
3.7	TAXES
3.8	NO MATERIAL ADVERSE CHANGE
3.9	COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS
3.10	LEGAL PROCEEDINGS; ORDERS
3.11	ORDINARY COURSE OF BUSINESS
3.12	CONTRACTS; NO DEFAULTS
3.13	INSURANCE
3.14	ENVIRONMENTAL MATTERS
3.15	BROKERS OR FINDERS
3.16	SEC FILINGS
3.17	DISCLOSURE

4.	REPRESENTATIONS AND WARRANTIES OF PARAGON AND STONEHAVEN

4.1	ORGANIZATION AND GOOD STANDING
4.2	ENFORCEABILITY; AUTHORITY; NO CONFLICT
4.3	CAPITALIZATION
4.4	FINANCIAL STATEMENTS
4.5	BOOKS AND RECORDS
4.6	NO UNDISCLOSED LIABILITIES
4.7	TAXES

4.8	COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS
4.9	LEGAL PROCEEDINGS; ORDERS
4.10	AUTHORIZATION; ISSUANCE
4.11	SEC REPORTS
4.12	ENVIRONMENTAL MATTERS
4.13	NO MATERIAL ADVERSE CHANGE
4.14	SOLVENCY; CASH
4.15	CONTRACTS; NO DEFAULTS
4.16	INSURANCE
4.17	EMPLOYEES
4.18	BROKERS OR FINDERS
4.19	SEC FILINGS
4.20	DISCLOSURE

5.	COVENANTS OF HAMPTON PRIOR TO CLOSING DATE

5.1	ACCESS AND INVESTIGATION
5.2	OPERATION OF THE BUSINESS OF HAMPTON
5.3	NOTIFICATION
5.4	BEST EFFORTS
5.5	CURRENT EVIDENCE OF TITLE

6.	COVENANTS OF PARAGON AND STONEHAVEN PRIOR TO CLOSING DATE

6.1	ACCESS AND INVESTIGATION
6.2	OPERATION OF THE BUSINESS OF PARAGON AND STONEHAVEN
6.3	PAYMENT OF INDEBTEDNESS BY RELATED PERSONS
6.4	NO NEGOTIATION
6.5	NOTIFICATION
6.6	BEST EFFORTS

7.	CONDITIONS PRECEDENT TO PARAGON’S AND STONEHAVEN’S OBLIGATION TO CLOSE

7.1	ACCURACY OF REPRESENTATIONS
7.2	HAMPTON’S PERFORMANCE
7.3	CONSENTS
7.4	NO PROCEEDINGS
7.5	NO PROHIBITION
7.6	ADDITIONAL DOCUMENTS
7.7	SUBSCRIPTION AGREEMENT

8.	CONDITIONS PRECEDENT TO THE PARTNERS’ OBLIGATION TO CLOSE

8.1	ACCURACY OF REPRESENTATIONS
8.2	PARAGON’S PERFORMANCE

8.3	CONSENTS
8.4	ADDITIONAL DOCUMENTS
8.5	NO PROCEEDINGS
8.6	NO PROHIBITION

9.	ADDITIONAL CONDITIONS PRECEDENT

9.1	ADDITIONAL EVENTS
9.2	SEC FILINGS
9.3	STOCKHOLDER MEETING
9.4	INDEMNIFICATION
9.5	DIRECTORS AND OFFICERS
9.6	CERTAIN POST-CLOSING COVENANTS

10.	TERMINATION

10.1	TERMINATION EVENTS
10.2	EFFECT OF TERMINATION

11.	GENERAL PROVISIONS

11.1	EXPENSES
11.2	PUBLIC ANNOUNCEMENTS
11.3	NOTICES
11.4	JURISDICTION; SERVICE OF PROCESS
11.5	ENFORCEMENT OF AGREEMENT
11.6	WAIVERS; REMEDIES CUMULATIVE
11.7	ENTIRE AGREEMENT AND MODIFICATION
11.8	SCHEDULES
11.9	ASSIGNMENT; SUCCESSORS AND NO THIRD-PARTY RIGHTS
11.10	SEVERABILITY
11.11	CONSTRUCTION
11.12	TIME OF THE ESSENCE
11.13	GOVERNING LAW
11.14	EXECUTION OF AGREEMENT
11.15	STONEHAVEN OBLIGATIONS
11.16	USAGE

iii

ASSET CONTRIBUTION AGREEMENT

THIS ASSET CONTRIBUTION AGREEMENT (this “ Agreement ”) is made and entered into as of the day of March, 2003, by and among HAMPTON COURT ASSOCIATES, L.P., an Illinois limited partnership (“ Hampton ”), PARAGON REAL ESTATE, L.P., a Delaware limited partnership (“ Paragon ”), and STONEHAVEN REALTY TRUST, a Maryland real estate investment trust (“ Stonehaven ”).

RECITALS

A. Hampton owns certain parcels and tracts of real property containing residential apartment buildings located in Chicago, Illinois, and more particularly described on Exhibit A (the “ Real Property ”)

B. Pursuant to the terms and subject to the conditions set forth in this Agreement, Hampton desires to contribute, convey, assign, transfer and deliver to Paragon all of Hampton’s right, title and interest in and to certain of its assets, including the Real Property, in exchange for receiving limited partnership units of Paragon (“ Paragon Units ”) that are, among other things, convertible, at Stonehaven’s option, into cash or shares of Stonehaven’s common stock, $0.01 par value per share (“ Common Stock ”).

AGREEMENT

In consideration of the foregoing recitals, of the representations, warranties, covenants and agreements set forth in this Agreement and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. DEFINITIONS

1.1 DEFINITIONS . For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1.1:

“ Agreement ” — as defined in the first paragraph of this Agreement.

“ Assets ” — as defined in Section 2.1.

“ Assumed Liabilities ” — as defined in Section 2.3.

“ Best Efforts ” — the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible; provided, however, that an obligation to use Best Efforts under this Agreement does not require the Person subject to that obligation to take actions that would result in a materially adverse change in the benefits to such Person of this Agreement and the Contemplated Transactions.

“ Breach ” — a “Breach” of a representation, warranty, covenant, obligation, or other provision of this Agreement or any instrument delivered pursuant to this Agreement will be deemed

to have occurred if there is or has been (a) any inaccuracy in or breach of, or any failure to perform or comply with, such representation, warranty, covenant, obligation or other provision, or (b) any occurrence or circumstance that is or was inconsistent with such representation, warranty, covenant, obligation or other provision, and the term “Breach” means any such inaccuracy, breach, failure, claim, occurrence or circumstance.

“ Class A Preferred Stock ” — as defined in Section 4.3(b).

“ Closing ” — as defined in Section 2.4.

“ Closing Date ” — the date and time as of which the Closing actually takes place.

“ Common Stock ” — as defined in Recital B of this Agreement.

“ Consent ” — any approval, consent, ratification, waiver, or other authorization (including any Governmental Authorization).

“ Contemplated Transactions ” — all of the transactions contemplated by this Agreement, including (a) contribution of the Assets by Hampton to Paragon, (b) issuance of the Paragon Units by Paragon to Hampton; (c) assumption of the Assumed Liabilities by Paragon; and (d) the performance by the parties to this Agreement of their respective covenants and obligations hereunder.

“ Contract ” — any agreement, contract, obligation, promise or undertaking (whether written or oral and whether express or implied) that is legally binding.

“ Contribution Consideration ” — as defined in Section 2.2.

“ Encumbrance ” — any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

“ Environment ” — soil, land surface or subsurface strata, surface waters (including navigable waters, ocean waters, streams, ponds, drainage basins, and wetlands), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, and any other environmental medium or natural resource.

“ Environmental, Health, and Safety Liabilities ” — any cost, damages, expense, liability, obligation, or other responsibility arising from or under Environmental Law and consisting of or relating to (a) any environmental, health, or safety matters or conditions, (b) fines, penalties, judgments, awards, settlements, legal or administrative proceedings, damages, losses, claims, demands and response, investigative, remedial, or inspection costs and expenses arising under Environmental Law, (c) financial responsibility under Environmental Law for cleanup costs or corrective action, including any investigation, cleanup, removal, containment or other remediation or response actions (“ Cleanup ”) required by applicable Environmental Law (whether or not such

Cleanup has been required or requested by any Governmental Body or any other Person) and for any natural resource damages, or(d) any other compliance, corrective, investigative, or remedial measures required under Environmental Law. The terms “removal,” “remedial,” and “response action,” include the types of activities covered by the United States Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., as amended (“ CERCLA ”).

“ Environmental Law ” — any Legal Requirement that requires or relates to (a) advising appropriate authorities, employees, and the public of intended or actual releases of pollutants or hazardous substances or materials, violations of discharge limits, or other prohibitions and of the commencements of activities, such as resource extraction or construction, that could have significant impact on the Environment, (b) preventing or reducing to acceptable levels the release of pollutants or hazardous substances or materials into the Environment, (c) reducing the quantities, preventing the release, or minimizing the hazardous characteristics of wastes that are generated, (d) assuring that products are designed, formulated, packaged, and used so that they do not present unreasonable risks to human health or the Environment when used or disposed of, (e) reducing to acceptable levels the risks inherent in the transportation of hazardous substances, pollutants, oil or other potentially harmful substances, (f) cleaning up pollutants that have been released, preventing the threat of release, or paying the costs of such clean up or prevention, or (g) making responsible parties pay private parties, or groups of them, for damages done to their health or the Environment, or permitting self-appointed representatives of the public interest to recover for injuries done to public assets.

“ Excluded Assets ” — as defined in Section 2.1(b).

“ Exchange Act ” — as defined in Section 4.11.

“ Exchange Offer ” — as defined in Section 9.2.

“ GAAP ” — generally accepted United States accounting principles.

“ Governmental Authorization ” — any approval, consent, license, permit, waiver or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

“ Governmental Body ” — any (a) nation, state, county, city, town, village, district or other jurisdiction of any nature, (b) federal, state, local, municipal, foreign or other government, (c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), (d) multi-national organization or body, or (e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature.

“ Hampton ” — as defined in the first paragraph of this Agreement.

“ Hampton Balance Sheet ” — as defined in Section 3.3.

“ Hampton Contract ” — any Contract that is set forth on Schedule 3.12 .

“ Hampton Interim Financials ” — as defined in Section 9.2(b).

“ Hampton’s Advisors ” — as defined in Section 6.1.

“ Hazardous Materials ” — any waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminant under or pursuant to any Environmental Law, including any admixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefor and asbestos or asbestos-containing materials.

“ Incumbent Trustee ” — as defined in Section 6.4(a).

“ Insured Exception ” — as defined in Section 5.5(d).

“ IRS ” — the United States Internal Revenue Service or any successor agency, and, to the extent relevant, the United States Department of the Treasury.

“ Knowledge ” — an individual will be deemed to have “Knowledge” of a particular fact or other matter if (a) such individual is actually aware of such fact or other matter; or (b) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonably comprehensive investigation concerning the existence of such fact or other matter. A Person (other than an individual) will be deemed to have “Knowledge” of a particular fact or other matter if any individual who is serving as a director, officer, general partner or trustee of such Person (or in any similar capacity) has Knowledge of such fact or other matter.

“ Legal Requirement ” — any federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute or treaty.

“ Liability ” — with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such Person.

“ MGCL ” — Maryland General Corporation Law.

“ Mr. Mastandrea ” — as defined in Section 9.1(a)(xii).

“ New Trustees ” — as defined in Section 9.5.

“ Order ” — any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency or other Governmental Body or by any arbitrator.

“ Ordinary Course of Business ” — an action taken by a Person will be deemed to have been taken in the “Ordinary Course of Business” only if (a) such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person, (b) such action is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority), and (c) such action is similar in nature and magnitude to actions customarily taken, without any authorization by the board of directors (or by any Person or group of Persons exercising similar authority), in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.

“ Organizational Documents ” — (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (e) any amendment to any of the foregoing.

“ Paragon ” — as defined in the first paragraph of this Agreement.

“ Paragon Contract ” — any Contract (a) under which Paragon has or may acquire any rights, (b) under which Paragon has or may become subject to any obligation or liability, or (c) by which Paragon or any of the assets owned or used by it is or may become bound.

“ Paragon Units ” — as defined in Recital B of this Agreement.

“ Paragon’s Advisors ” — as defined in Section 5.1.

“ Partnership Agreement ” — as defined in Section 2.2.

“ Permitted Encumbrances ” — as defined in Section 3.4.

“ Person ” — any individual, corporation, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Body.

“ Proceeding ” — any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

“ Proxy Statement ” — as defined in Section 3.16.

“ Public Filings ” — as defined in Section 9.2(b).

“ Real Property ” — as defined in Recital A of this Agreement.

“ Recorded Documents ” — as defined in Section 5.5(a)(i)(B).

“ Registration Statement ” — as defined in Section 3.16.

“ Related Person ” — with respect to a specified Person (a) any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person, (b) any Person that holds a Material Interest in such specified Person, (c) each Person that serves as a director, officer, partner, executor, or trustee of such specified Person (or in a similar capacity), (d) any Person in which such specified Person holds a Material Interest; (e) any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity), and (f) any Related Person of any individual described in clause (b) or (c).

For purposes of this definition “Material Interest” means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of voting securities or other voting interests representing at least 10% of the outstanding voting power of a Person or equity securities or other equity interests representing at least 10% of the outstanding equity securities or equity interests in a Person.

“ Release ” — any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping or other releasing into the Environment, whether intentional or unintentional.

“ Representative ” — with respect to a particular Person, any director, officer, employee, agent, consultant, advisor or other representative of such Person, including legal counsel, accountants and financial advisors.

“ SEC ” — as defined in Section 4.11.

“ SEC Documents ” — as defined in Section 4.11.

“ Securities Act ” — the Securities Act of 1933 or any successor law, and regulations and rules issued pursuant to that Act or any successor law.

“ Stockholder Meeting ”— as defined in Section 3.16.

“ Stonehaven ” — as defined in the first paragraph of this Agreement.

“ Stonehaven Balance Sheet ” — as defined in Section 4.4.

“ Stonehaven Contract ” — any Contract (a) under which Stonehaven has or may acquire any rights, (b) under which Stonehaven has or may become subject to any obligation or liability, or (c) by which Stonehaven or any of the assets owned or used by it is or may become bound.

“ Stonehaven Facilities ” — any real property, leaseholds or other interests currently or formerly owned or operated by Stonehaven or Paragon and any buildings, plants, structures or equipment currently or formerly owned or operated by Stonehaven or Paragon.

“ Stonehaven Interim Balance Sheet ” — as defined in Section 4.4.

“ Stonehaven’s Notice ” — as defined in Section 5.5(c)(ii)

“ Subscription Agreement ” — as defined in Section 2.2.

“ Superior Proposal ” — as defined in Section 6.4.

“ Tax ” — any tax (including any income tax, capital gains tax, value-added tax, sales tax, property tax, gift tax, or estate tax), levy, assessment, tariff, duty (including any customs duty), deficiency, or other fee, and any related charge or amount (including any fine, penalty, interest, or addition to tax), imposed, assessed, or collected by or under the authority of any Governmental Body or payable pursuant to any tax-sharing agreement or any other Contract relating to the sharing or payment of any such tax, levy, assessment, tariff, duty, deficiency or fee.

“ Tax Return ” — any return (including any information return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any Legal Requirement relating to any Tax.

“ Threat of Release ” — a substantial likelihood of a Release that may require action in order to prevent or mitigate damage to the Environment that may result from such Release.

“ Threatened ” — a claim, Proceeding, dispute, action or other matter will be deemed to have been “Threatened” if any demand or statement has been made (orally or in writing) or any notice has been given (orally or in writing), or if any other event has occurred or any other circumstances exist, that would lead a prudent Person to conclude that such a claim, Proceeding, dispute, action or other matter is likely to be asserted, commenced, taken or otherwise pursued in the future.

“ Title Commitment ” — as defined in Section 5.5(a)(i)(A).

“ Title Insurer ” — as defined in Section 5.5(a)(i).

“ Title Objection ” — as defined in Section 5.5(c).

“ Wellington ” — as defined in Section 4.1(b).

2. CONTRIBUTION OF ASSETS; CONTRIBUTION CONSIDERATION; CLOSING

2.1 CONTRIBUTION OF ASSETS .

(a) Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Hampton shall contribute, convey, assign, transfer and deliver to Paragon, and Paragon shall accept and acquire from Hampton, free and clear of any Encumbrances other than Permitted Encumbrances, all of Hampton’s right, title and interest in and to the Real Property and all other property and assets, whether real, personal or mixed, tangible or intangible, of every kind and description and wherever located, owned by Hampton and relating to, arising from or currently used exclusively in connection with, Hampton’s operation of the Real Property. All of the property and assets to be contributed by Hampton to Paragon pursuant to this Section 2.1(a) are herein referred to collectively as the “ Assets .”

(b) Notwithstanding anything to the contrary contained in Section 2.1(a) or elsewhere in this Agreement, the assets and properties of Hampton that are not part of Assets (collectively, the “ Excluded Assets ”) shall remain the property of Hampton after the Closing, and include:

(i) all cash and cash equivalents, subject to the credits and adjustments as set forth in Section 2.2(b);

(ii) all claims for refund of Taxes and other governmental charges of any nature;

(iii) all rights of Hampton under this Agreement and the bill of sale and assignment and assumption agreement described Section 2.5; and

(iv) the property and assets expressly designated in Schedule 2.1(b)(iv) .

2.2 CONTRIBUTION CONSIDERATION .

(a) In consideration of Hampton contributing, conveying, assigning, transferring and delivering the Assets to Paragon, Paragon shall, at the Closing, (i) issue and deliver to Hampton 813,938 validly issued, fully paid and non-assessable Paragon Units (the “ Contribution Consideration ”); and (ii) assume the Assumed Liabilities. The Paragon Units issued to Hampton in connection with Section 2.2(a)(i) shall constitute ninety-nine percent (99%) of the authorized, issued and outstanding Paragon Units. If the calculation of the Contribution Consideration in connection with Section 2.2(a)(i) results in a fractional number of Paragon Units being issued to Hampton, Paragon shall round that fraction up or down, as the case may be, to the nearest whole number of Paragon Units. Upon issuance, the Paragon Units will have the terms, and will entitle the holder thereof to the rights, powers and privileges described in the agreement of limited partnership of Paragon attached hereto as Exhibit A , which imposes a four (4) year holding period on any Paragon Units prior to conversion into Common Stock (the “ Partnership Agreement ”). As of the date of this Agreement, Hampton shall have executed a subscription agreement in the form attached hereto as Exhibit B (the “ Subscription Agreement ”).

(b) Credits and adjustments of cash will be made for the following:

(i) Any rents, prepaid items and other applicable items with respect to the Assumed Liabilities shall be prorated as of the Closing Date. Hampton shall assign to Paragon all tenant security deposits with respect to the Assumed Liabilities and Paragon shall receive cash in the amount thereof.

(ii) Ad valorem, real and tangible personal property taxes that are a lien with respect to the Assets as of the Closing Date shall be prorated between Hampton and Paragon as of the Closing Date on the basis of no applicable discount. If the amount of such taxes with respect to any of the Assets has not been determined as of the Closing Date, then the taxes with respect to such Assets for the preceding calendar year, on the basis of no applicable discount, shall be used to calculate such prorations, with known changes in valuation or millage applied. Paragon will receive the amount of prorated taxes in cash from Hampton. If the actual amount of any such taxes varies by more than $5,000 from estimates used at the Closing to prorate such taxes, then the parties shall re-prorate such taxes within ten (10) days following request by any party based on the actual amount of the tax bill.

2.3 Assumed Liabilities . At or prior to the Closing, Paragon shall assume and agree to discharge all Liabilities of Hampton relating exclusively to the Assets (the “ Assumed Liabilities ”), and all of which are listed below, provided Paragon has received a proration credit or adjustment related thereto:

(a) all accounts payable in the Ordinary Course of Business that remain unpaid as of the Closing, all of which are listed on Schedule 2.3(a) ;

(b) all Liabilities to tenants of Hampton as of the Closing, all of which are listed on Schedule 2.3(b) ;

(d) all Liabilities (i) relating to or incurred in connection with the Permitted Encumbrances all of which are reflected on Schedule 2.3(d) , (ii) reflected or reserved against in the Hampton Balance Sheet or incurred in the Ordinary Course of Hampton’s business since that date thereof, or (iii) otherwise described in Schedule 2.3(d) .

Notwithstanding any other provision of this Agreement, neither Paragon nor Stonehaven is assuming under this Agreement or any other agreement contemplated hereby any Liability of Hampton that is not specifically identified as an Assumed Liability under this Section including: (i) Liabilities arising out of any breach, default or delinquency by Hampton of any provision of any Hampton Contract that occurs prior to the Closing Date; (ii) any federal, state or local income or other Tax payable with respect to the Assets for a period prior to the Closing Date; (iii) any Liabilities arising before or after the Closing Date or as a result of the Closing for severance, bonuses or any other form of compensation to any employees, agents or independent contractors of Hampton, whether or not arising or under any applicable Law, benefit plan or other arrangement with respect thereto; (iv) any Liabilities of Hampton arising or incurred in connection with the negotiation, preparation and execution of this Agreement and the Contemplated Transactions except to the extent provided in Section 11.1; (v) any Environmental, Health and Safety Liability

arising from or related to circumstances existing on or before the Closing Date; (vi) any Liabilities of Hampton based upon an act or omission of Hampton occurring after the Closing; and (vii) any other Liabilities of Hampton not specifically assumed herein, regardless of when made or asserted, that are not specifically assumed hereunder.

2.4 Closing . Consummation of the sale of the Assets, and the issuance of the Paragon Units as provided for in this Agreement (the “ Closing ”) shall take place at the office of Hampton’s legal counsel, Kohrman Jackson & Krantz P.L.L., at One Cleveland Center, 20th Floor, 1375 East Ninth Street, Cleveland, Ohio, commencing at 10:00 a.m. (local time) on the 2 ^nd day of June, 2003, or at such other time and place as Hampton and Paragon may agree.

2.5 Closing Obligations . In addition to any other documents to be delivered under any other section of this Agreement, at the Closing:

(a) Hampton shall deliver to Paragon:

(i) a recordable deed in form and substance sufficient to transfer title to the Real Property to Paragon;

(ii) a bill of sale executed by Hampton in form and substance sufficient to transfer title to all of the Assets that are tangible personal property to Paragon;

(iii) an assignment and assumption agreement executed by Hampton in form and substance sufficient to transfer title to all of the Assets that are intangible personal property to Paragon, which assignment shall also contain Paragon’s agreement to assume and discharge all of the Assumed Liabilities;

(iv) such other documents or instruments of transfer and conveyance as may be reasonably requested by Paragon, each in form and substance satisfactory to Paragon and its legal counsel, and executed by Hampton; and

(v) a certificate executed by Hampton as to the accuracy of its representations and warranties as of the date of this Agreement and as of the Closing in accordance with Section 7.1, and as to its compliance with and performance of its covenants and obligations to be performed or complied with at or before the Closing in accordance with Section 7.2.

(b) Paragon shall deliver to Hampton:

(i) the Contribution Consideration, in form and substance satisfactory to Hampton and its legal counsel;

(ii) the assignment and assumption agreement described in Section 2.5(a)(iii), executed by Paragon; and

(iii) a certificate executed by Paragon and Stonehaven as to the accuracy of their representations and warranties as of the date of this Agreement and as of the Closing in accordance

with Section 8.1, and as to its compliance with and performance of its covenants and obligations to be performed or complied with at or before the Closing in accordance with Section 8.2.

2.6 Further Assurances . T he parties hereto shall cooperate reasonably with each other and with their respective Representatives in connection with any actions required to be taken as part of their respective obligations under this Agreement, and shall: (a) furnish upon request to each other such further information; (b) execute and deliver to each other such other documents; and (c) do such other acts and things, all as any other party may reasonably request for the purpose of carrying out the intent of this Agreement and the Contemplated Transactions.

3. REPRESENTATIONS AND WARRANTIES OF HAMPTON

Hampton represents and warrants to Paragon and Stonehaven as follows as of the date hereof and as of the Closing (except as otherwise expressly stated herein):

3.1 Organization and Good Standing . Hampton is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Illinois, with full partnership power and partnership authority to conduct its business as it is now being conducted, to own and use the Assets, and to perform its obligations under this Agreement. Hampton is duly qualified to do business as a foreign entity and is in good standing under the laws of each state or other jurisdiction in which either the ownership and use of the Assets or the nature of the activities conducted by Hampton with respect to the Assets, requires such qualification. Hampton has delivered to Stonehaven copies of the Organizational Documents of Hampton.

3.2 Enforceability ; Authority; No Conflict

(a) This Agreement constitutes the legal, valid and binding obligation of Hampton, enforceable against Hampton in accordance with its terms. Hampton has the right, power, authority and capacity to execute and deliver this Agreement and to perform its obligations under this Agreement.

(b) Neither the execution and delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions by Hampton will, directly or indirectly (with or without notice or lapse of time):

(i) contravene, conflict with or result in a violation of (A) any provision of the Organizational Documents of Hampton, or (B) any resolution adopted by Hampton’s partners;

(ii) contravene, conflict with or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which any of the Assets are subject;

(iii) contravene, conflict with or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate

the maturity or performance of, or payment under, or to cancel, terminate or modify, any Hampton Contract;

(iv) result in the imposition or creation of any Encumbrance upon or with respect to any of the Assets; or

(v) contravene, conflict with or result in a violation or breach of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by Hampton and relates to the Assets.

(c) Except as set forth in Schedule 3.2(c) , Hampton is not required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

3.3 Financial Statements . Hampton has delivered to Paragon an unaudited balance sheet of Hampton as the same appears on IRS Form 1065 for the calendar year ended December 31, 2001, and shall deliver an unaudited balance sheet of Hampton as the same appears on IRS Form 1065 for the calendar year ended December 31, 2002 (the “ Hampton Balance Sheet ”). Such financial statements fairly present, or will present, as applicable, in all material respects the financial condition of Hampton. The financial statements have been prepared from and are in accordance with the accounting records of Hampton in all material respects.

3.4 Title to Properties; Encumbrances . Hampton owns good and marketable title to the Real Property, and good and transferable title to all of the other Assets. All of the Assets are free and clear of any material Encumbrances except (i) mortgages or security interests shown on the Hampton Balance Sheet or Schedule 3.4 , (ii) mortgages or security interests created in connection with the purchase of Assets after the date of the Hampton Balance Sheet in the Ordinary Course of Business, (iii) liens for current taxes not yet due, and (iv) with respect to the Real Property, (A) minor imperfections of title, if any, none of which is substantial in amount, materially detracts from the value or impairs the use thereof, or impairs the operations thereof, and (B) zoning laws and other land use restrictions that do not materially impair the present or anticipated use thereof (collectively, the “ Permitted Encumbrances ”).

3.5 Condition and Sufficiency of Assets . All of the Assets are in good operating condition and repair, ordinary wear and tear excepted, and are adequate for the uses to which they are being put. The buildings and structures included within the Assets are structurally sound and none of such buildings and structures is in need of maintenance or repairs except for ordinary, routine maintenance and repairs. The Assets are sufficient for the continued conduct of the Real Property after the Closing in substantially the same manner as conducted prior to the Closing.

3.6 No Undisclosed Liabilities . Other than (i) the Permitted Encumbrances, (ii) Liabilities reflected or reserved against in the Hampton Balance Sheet or incurred in the Ordinary Course of Hampton’s business since the date thereof, or (iii) otherwise described in Schedule 3.6 , there are no material Liabilities or material obligations adversely affecting the Assets.

3.7 Taxes . Hampton has filed or caused to be filed all Tax Returns that are or were required to be filed by it pursuant to applicable Legal Requirements. Hampton has paid, or made provision for the payment of, all Taxes that have or may have become due by it. All Tax Returns filed by Hampton are true, correct and complete in all material respects.

3.8 No Material Adverse Change . Since the date of the Hampton Balance Sheet, there has not been any material adverse change in the Assets, and to the Knowledge of Hampton, no event has occurred or circumstance exists that may result in such a material adverse change.

3.9 Compliance with Legal Requirements; Governmental Authorizations .

(a) Except as set forth in Schedule 3.9 :

(i) Hampton is, and at all times has been, in compliance in all material respects with each Legal Requirement that is, or was, applicable to the conduct or operation of the Assets; and

(ii) no event has occurred or circumstance exists that (with or without notice or lapse of time) (A) may constitute or result in a violation by Hampton of, or a failure on the part of Hampton to comply with, any Legal Requirement affecting the Assets, or (B) may give rise to any obligation on the part of Hampton to undertake, or to bear all or any portion of the cost of, any remedial action of any nature as a result of owning or operating any of the Assets; and

(iii) Hampton has not received any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding (A) any actual, alleged, possible or potential violation of, or failure to comply with, any Legal Requirement affecting the Assets, or (B) any actual, alleged, possible or potential obligation on the part of Hampton to undertake, or to bear all or any portion of the cost of, any remedial action of any nature as a result of owning or operating any of the Assets.

(b) Hampton has obtained each Governmental Authorization that is required for the conduct of its business that relates to the Assets and each such Governmental Authorization is valid and in full force and effect.

3.10 Legal Proceedings; Orders

(a) Except as set forth in Schedule 3.10(a) , there is no pending Proceeding:

(i) by or against Hampton that relates to or may affect the Assets; or

(ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Contemplated Transactions.

To the Knowledge of Hampton, (A) no such Proceeding has been Threatened, and (B) no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Proceeding.

(b) Except as set forth in Schedule 3.10(b) , the Assets are not subject to any Order.

3.11 Ordinary Course of Business . Except as set forth in Schedule 3.11 , since the date of the Hampton Balance Sheet, Hampton has conducted its businesses in the Ordinary Course of Business.

3.12 Contracts; No Defaults . Schedule 3.12 contains a complete and accurate list, and Hampton has delivered or made available to Paragon true and complete copies, of all Hampton Contracts affecting or relating to the Assets. Except as set forth in Schedule 3.12 , Hampton is in material compliance with all terms and requirements of each such Hampton Contract, and, to Hampton’s Knowledge, each other Person that has or had any obligation or Liability under any such Hampton Contract is, and has been, in compliance with all material terms and requirements of such Hampton Contract.

3.13 Insurance . Hampton has delivered or made available to Paragon (a) true and complete copies of all policies of insurance to which Hampton is a party and under which any of the Assets is covered, and (b) true and complete copies of all pending applications for policies of insurance covering the Assets.

3.14 Environmental Matters .

Except as set forth in Schedule 3.14 :

(a) To the Knowledge of Hampton, the Real Property is, and at all times has been, in all material respects, in compliance with, and is not, and has not been, in violation of, any Environmental Law to which it is subject. Hampton has no basis to expect, nor has it received, any notice or other communication from (i) any Governmental Body, or (ii) the current or prior owner or operator of the Real Property, of any violation or failure to comply with any Environmental Law to which the Real Property is subject, or of any obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to the Real Property.

(b) There are no pending or, to the Knowledge of Hampton, Threatened claims or Encumbrances resulting from any Environmental, Health, and Safety Liabilities or arising under or pursuant to any Environmental Law, with respect to or affecting the Real Property.

(c) Hampton has no Knowledge of any basis to expect, nor has Hampton received, any citation, directive, inquiry, notice, Order, summons, warning or other communication that relates to hazardous activity, Hazardous Materials, or any alleged, actual or potential violation or failure to comply with any Environmental Law, or of any alleged, actual or potential obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to the Real Property or any other properties or assets (whether real, personal, or mixed) in which Hampton has or had an interest, or with respect to any property or Real Property to which Hazardous Materials generated, manufactured, refined, transferred, imported, used or processed by Hampton has been transported, treated, stored, handled, transferred, disposed, recycled or received.

(d) To the Knowledge of Hampton, there has been no Release or Threat of Release, of any Hazardous Materials at or from the Real Property or at any other locations where any Hazardous Materials were generated, manufactured, refined, transferred, produced, imported, used or processed from or by the Real Property.

3.15 Brokers or Finders . Neither Hampton nor any of its Representatives has incurred any obligation or Liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payments in connection with the Contemplated Transactions.

3.16 Sec Filings . The information supplied by Hampton in writing expressly for the purpose of inclusion in the proxy statement and registration statement to be filed with the SEC with respect to the Contemplated Transactions (the “ Registration Statement ”) shall not at the time the Registration Statement (including any amendments or supplements thereto) is filed or declared effective by the SEC contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading. The information supplied by Hampton in writing expressly for the purpose of inclusion in the proxy statement/prospectus to be sent to the stockholders of Stonehaven in connection with the meetings of Stonehaven’s stockholders (the “ Stockholder Meeting ”) to be held in connection with the Contemplated Transactions (such proxy statement/prospectus as amended or supplemented is referred to herein as the “ Proxy Statement ”) shall not, on the date the Proxy Statement is first mailed to Stonehaven’s stockholders and, at the time of the Stockholder Meeting, contain any untrue statement of a material fact, or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. If at any time prior to the Closing any event or information should be discovered by Hampton that should be set forth in an amendment to the Registration Statement or a supplement to the Proxy Statement, Hampton shall promptly inform Stonehaven.

3.17 Disclosure . No representation or warranty or other statement made by Hampton in this Agreement, any Schedule or certificate delivered pursuant to the terms of this Agreement or otherwise in connection with the Contemplated Transactions contains any untrue statement or omits to state a material fact necessary to make any of them, in light of the circumstances in which it was made, not misleading. There does not now exist any event, condition or other matter, or any series of events, conditions or other matters, individually or in the aggregate, materially and adversely affecting the Assets that has not been disclosed to Stonehaven by Hampton on or prior to the date of this Agreement.

4. REPRESENTATIONS AND WARRANTIES OF PARAGON AND STONEHAVEN

Paragon and Stonehaven jointly and severally represent and warrant to Hampton as followsas of the date hereof and as of the Closing (except as otherwise expressly stated herein):

4.1 Organization and Good Standing .

(a) Paragon is a Delaware limited partnership, duly organized, validly existing and in good standing under the laws of the State of Delaware, with full partnership power and partnership authority to conduct its business as it is now being conducted and to own and use the properties and

assets that it purports to own and use, and to perform fully its obligations under this Agreement. Paragon is duly qualified to do business as a foreign entity and is in good standing under the laws of each state or other jurisdiction in which either the ownership and use of the properties owned and used by it, or the nature of the activities conducted by it, requires such qualification.

(b) Stonehaven is a real estate investment trust duly organized, validly existing and in good standing under the laws of the State of Maryland, with full power and authority to conduct its business as it is now being conducted and to own or use the properties and assets that it purports to own or use, and to perform fully its obligations under this Agreement. Stonehaven is duly qualified to do business as a foreign entity and is in good standing under the laws of each state or other jurisdiction in which either the ownership and use of the properties owned and used by it, or the nature of the activities conducted by it, requires such qualification. Stonehaven does not own any shares of capital stock or other securities of any Person other than Stonehaven Technologies, Inc., Paragon, Stellent, Inc. and Wellington Properties Investments, LP (“ Wellington ”), each in the amounts set forth on Schedule 4.1(b) .

4.2 Enforceability; Authority; No Conflict .

(a) This Agreement constitutes the legal, valid and binding obligation of Paragon and Stonehaven, enforceable against Paragon and Stonehaven in accordance with its terms. Paragon and Stonehaven each have the right, power and authority to execute and deliver this Agreement and to perform their respective obligations hereunder.

(b) Neither the execution and delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions by Paragon or Stonehaven will, directly or indirectly (with or without notice or lapse of time):

(i) breach (A) any provision of any of the Organizational Documents of Paragon or Stonehaven, or (B) any resolution adopted by the partners of Paragon or the board of trustees or stockholders of Stonehaven;

(ii) breach or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under any Legal Requirement or any Order to which Paragon or Stonehaven, or any of the their assets or properties, may be subject;

(iii) contravene, conflict with or result in a violation or breach of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by Paragon or Stonehaven or that relates to the assets or properties, or to the business, of Paragon or Stonehaven;

(iv) cause Stonehaven to become subject to, or to become liable for the payment of, any Tax;

(v) breach any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or payment under, or to

cancel, terminate or modify, any Contract to which Paragon or Stonehaven, or any of their assets or properties may be subject;

(vi) result in the imposition or creation of any Encumbrance upon or with respect to any of the assets or properties of Paragon or Stonehaven; or

(vii) result in any holder of Common Stock having the right to exercise dissenters’ appraisal rights as a holder of Common Stock.

(c) Except as set forth in Schedule 4.2(c) , neither Paragon nor Stonehaven is required to give any notice to or obtain any Consent in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

4.3 Capitalization .

(a) No equity securities of Paragon have been issued or will be issued except in accordance with the terms of this Agreement.

(b) The authorized equity securities of Stonehaven consist of (i) 100,000,000 shares of Common Stock , of which 4,517,524 shares are issued and outstanding, (ii) 1,518,000 shares of Class A Cumulative Convertible Preferred Shares, $0.01 par value per share (“ Class A Preferred Stock ”), of which 663,291 shares are issued and outstanding, and (iii) 349,800 shares of Class B Junior Cumulative Convertible Preferred Shares, $0.01 par value per share, of which no shares are issued and outstanding, all of which have been duly authorized and validly issued and are fully paid and nonassessable. All dividends that Stonehaven has been required to pay on its capital stock have been duly paid.

Except as set forth in Schedule 4.3 , there are no Contracts relating to the issuance, sale or transfer of any equity securities or other securities of Paragon or Stonehaven. None of the outstanding equity securities of Paragon or Stonehaven was issued in violation of the Securities Act, or any other Legal Requirement.

4.4 Financial Statements .

(a) Stonehaven has delivered to Hampton: (i) an audited consolidated balance sheet of Stonehaven as at December 31, 2001 (including the notes thereto, the “ Stonehaven Balance Sheet ”), and the related audited statements of income, changes in stockholders’ equity and cash flows for the fiscal year then ended, including in each case the notes thereto, together with the report thereon of Boulay, Heutmaker, Zibell & Co. P.L.L.P., independent certified public accountants; (ii) audited consolidated balance sheets of Stonehaven as at December 31 in each of the fiscal years 1998, 1999 and 2000, and the related audited statements of income, changes in stockholders’ equity and cash flows for each of the fiscal years then ended, including in each case the notes thereto together with the reports thereon of Stonehaven’s then independent certified public accountants; and (iii) an unaudited balance sheet of Stonehaven as at September 30, 2002, (the “ Stonehaven Interim Balance Sheet ”) and the related unaudited statements of income, changes in stockholders’ equity, and cash flows for the nine months then ended, including in each case the notes thereto certified by

Stonehaven’s chief financial officer. Such financial statements fairly present the in all material respects the financial condition and the results of operations, changes in stockholders’ equity and cash flows of Stonehaven and its subsidiaries as at the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP (except that the interim financial statements are subject to year-end adjustments). The financial statements referred to in this Section 4.4(a) reflect the consistent application of such accounting principles throughout the periods involved in all material respects. The financial statements have been prepared from and are in accordance with the accounting records of Stonehaven in all material respects. Stonehaven has also delivered to Hampton copies of all letters from Stonehaven’s auditors to Stonehaven’s board of trustees or the audit committee thereof during the thirty-six (36) months preceding the execution of this Agreement, together with copies of all responses thereto.

(b) Stonehaven shall deliver to Hampton an audited consolidated balance sheet of Stonehaven as at December 31, 2002, and the related audited statements of income, changes in stockholders’ equity and cash flows for the fiscal year then ended, including in each case the notes thereto, together with the report thereon of Boulay, Heutmaker, Zibell & Co. P.L.L.P, independent certified public accountants, as soon as such financial statements become available to Stonehaven. Following Stonehaven’s delivery of the financial statements referred to in this Section 4.4(b) to Hampton, the audited consolidated balance sheet of Stonehaven as at December 31, 2002 shall constitute the “ Stonehaven Balance Sheet ” for all purposes under this Agreement. The financial statements to be delivered by Stonehaven pursuant to this Section 4.4(b) shall fairly present in all material respects the financial condition and the results of operations, changes in stockholders’ equity and cash flows of Stonehaven as at the dates of and for the periods referred to in such financial statements, all in accordance with GAAP. The financial statements referred to in this Section 4.4(b) shall reflect the consistent application of such accounting principles throughout the periods involved in all material respects. The financial statements shall have been prepared from and are in accordance with the accounting records of Stonehaven in all material respects.

4.5 Books and Records . The books of account and other financial records of Paragon and Stonehaven, all of which have been made available to Hampton, are complete and correct and represent actual, bona fide transactions and have been maintained in accordance with sound business practices and the requirements of section 13(b)(2) of the Exchange Act, including the maintenance of an adequate system of internal controls. The minute books of Paragon and Stonehaven, all of which have been made available to Hampton, contain accurate and complete records of all meetings held of, and corporate action taken by, the partners, the stockholders, the board of trustees and committees of the board of trustees of Paragon and Stonehaven, as the case may be, and no meeting of any such partners, stockholders, board of trustees or committee thereof has been held for which minutes have not been prepared or are not contained in such minute books.

4.6 No Undisclosed Liabilities . Except as set forth in Schedule 4.6 , neither Paragon nor Stonehaven has any material Liability except for (i) Liabilities reflected or reserved against in the Stonehaven Balance Sheet or the Stonehaven Interim Balance Sheet, (ii) current Liabilities incurred in the Ordinary Course of Business of Paragon or Stonehaven since the date of the Stonehaven Interim Balance Sheet, and (iii) Liabilities incurred in connection with this Agreement and the Contemplated Transactions.

4.7 Taxes .

(a) Paragon and Stonehaven have filed or caused to be filed on a timely basis all Tax Returns and all reports with respect to Taxes that are or were required to be filed pursuant to applicable Legal Requirements. All Tax Returns and reports filed by Paragon and Stonehaven are true, correct and complete in all material respects. Paragon and Stonehaven have paid, or made provision for the payment of, all Taxes that have or may have become due for all periods covered by the Tax Returns or otherwise, or pursuant to any assessment received by Paragon or Stonehaven, in each case in all material respect, except such Taxes, if any, as are listed in Schedule 4.7(a) and are being contested in good faith and as to which adequate reserves (determined in accordance with GAAP) have been provided in the Stonehaven Balance Sheet and the Stonehaven Interim Balance Sheet. Except as provided in Schedule 4.7(a) , neither Paragon nor Stonehaven currently is the beneficiary of any extension of time within which to file any Tax Return. To the Knowledge of Stonehaven, no claim has ever been made or is expected to be made by any Governmental Body in a jurisdiction where Paragon or Stonehaven does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

(b) Copies of all Tax Returns filed by or on behalf of Paragon or Stonehaven since 1998 have been delivered to Hampton. The federal and state income or franchise Tax Returns of Paragon and Stonehaven, if applicable, have been audited by the IRS or relevant state tax authorities or are closed by the applicable statute of limitations for all taxable years. Schedule 4.7(b) contains a complete and accurate list of all Tax Returns of Paragon and Stonehaven that have been audited or are currently under audit and accurately describe any deficiencies or other amounts that were paid or are currently being contested. To the Knowledge of Paragon and Stonehaven, no undisclosed deficiencies are expected to be asserted with respect to any such audit. All deficiencies proposed as a result of such audits have been paid, reserved against, settled or are being contested in good faith by appropriate proceedings as described in Schedule 4.7(b) . Paragon and Stonehaven have delivered, or made available to Hampton, copies of any examination reports, statements or deficiencies or similar items with respect to such audits. Except as provided in Schedule 4.7(b) , neither Paragon nor Stonehaven has any Knowledge that any Governmental Body is likely to assess any additional taxes for any period for which Tax Returns have been filed. There is no dispute or claim concerning any Taxes of Paragon or Stonehaven either (i) claimed or raised by any Governmental Body in writing or (ii) as to which Paragon or Stonehaven has Knowledge. Schedule 4.7(b) contains a list of all Tax Returns for which the applicable statute of limitations has not run. Except as described in Schedule 4.7(b) , neither Paragon nor Stonehaven has given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes of Paragon or Stonehaven or for which Paragon or Stonehaven may be liable. There are no Encumbrances on any of the assets or properties of Paragon or Stonehaven that arose in connection with any failure to pay any Tax.

(c) The charges, accruals and reserves with respect to Taxes on the records of Paragon and Stonehaven are, in all material respects, adequate (determined in accordance with GAAP) and are at least equal to Paragon’s and Stonehaven’s respective liability for Taxes. To the Knowledge of Stonehaven, there exists no proposed tax assessment or deficiency against either Paragon or Stonehaven except as disclosed in the Stonehaven Interim Balance Sheet or in Schedule 4.7(c) .

(d) All Taxes that either Paragon or Stonehaven are or were required by Legal Requirements to withhold, deduct or collect have been duly withheld, deducted and collected and, to the extent required, have been paid to the proper Governmental Body or other Person in all material respects. There is no tax sharing agreement, tax allocation agreement, tax indemnity obligation or similar written or unwritten agreement, arrangement, understanding or practice with respect to Taxes (including any advance pricing agreement, closing agreement or other arrangement relating to Taxes) that will require any payment by Paragon or Stonehaven.

4.8 Compliance with Legal Requirements; Governmental Authorizations .

(a) Except as set forth in Schedule 4.8(a) :

(i) Each of Paragon and Stonehaven are, and at all times have been, in all material respects in full compliance with each Legal Requirement that is or was applicable to it or to the conduct or operation of its business or the ownership or use of any of its assets or properties;

(ii) no event has occurred or circumstance exists that (with or without notice or lapse of time) (A) may constitute or result in a violation by either Paragon or Stonehaven of, or a failure on the part of either Paragon or Stonehaven to comply with, any Legal Requirement, or (B) may give rise to any obligation on the part of either Paragon or Stonehaven to undertake, or to bear all or any portion of the cost of, any remedial action of any nature; and

(iii) Neither Paragon nor Stonehaven has received any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding (A) any actual, alleged, possible or potential violation of, or failure to comply with, any Legal Requirement, or (B) any actual, alleged, possible or potential obligation on the part of either Paragon or Stonehaven to undertake, or to bear all or any portion of the cost of, any remedial action of any nature.

(b) Stonehaven and Paragon have each obtained all Governmental Authorizations required for the conduct of their respective businesses or that otherwise relates to Paragon’s or Stonehaven’s business , assets or properties and each such Governmental Authorization is valid and in full force and effect.

4.9 Legal Proceedings; Orders .

(a) Except as set forth in Schedule 4.9(a) , there is no pending or, to either Paragon’s or Stonehaven’s Knowledge, threatened Proceeding:

(i) by or against either Paragon or Stonehaven or that otherwise relates to or may affect the business of, or any of the assets owned or used by, Paragon or Stonehaven; or

(ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Contemplated Transactions.

To the Knowledge of Paragon and Stonehaven, no event has occurred or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any such Proceeding.

(b) Except as set forth in Schedule 4.9(b) , neither Paragon nor Stonehaven are subject to any Order that relates to the business of, or any of the assets owned or used by, Paragon or Stonehaven.

4.10 Authorization; Issuance .

(a) Paragon and Stonehaven have authorized the issuance and delivery of the Paragon Units as described in Section 2.2(a). Upon issuance and delivery by Paragon to Hampton, (i) the Paragon Units will be duly authorized and validly issued and fully paid and non-assessable, (ii) upon consummation of the Exchange Offer, each Paragon Unit shall be convertible into 22.881 shares of Common Stock or cash, as described in the Partnership Agreement, and (iii) have the terms, and will entitle the holders thereof to the, all other rights, powers and privileges, described in the Partnership Agreement. The Paragon Units issued to Hampton in connection with this Section 2.2(a) will constitute 99.0% of the authorized, issued and outstanding Paragon Units.

(b) Assuming the accuracy of the representations of Hampton contained in the Subscription Agreement, the issuance and delivery of the Paragon Units as contemplated by this Agreement are exempt from the registration requirements of the Securities Act and all state securities laws, and neither Paragon, Stonehaven nor any one acting on their behalf will take any action hereafter that would cause the loss of such exemption.

4.11 SEC Reports .

Stonehaven has filed all forms, reports, schedules, proxy materials, registration statements and related prospectuses and supplements and other documents required to be filed by Stonehaven with the Securities and Exchange Commission (the “ SEC ”) pursuant to the Securities Act or the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), through the year ended December 31, 2002 and up to the date hereof (collectively, the “ SEC Documents ”), and will cause to be delivered to Hampton copies of such additional documents as may be filed with the SEC by Stonehaven between the date hereof and the Closing Date. The SEC Documents were, and those additional documents filed between the date hereof and the Closing Date will be, prepared and filed in full compliance in all material respects with the rules and regulations promulgated by the SEC, and do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

4.12 Environmental Matters .

Except as set forth in Schedule 4.12 :

(a) To the Knowledge of Paragon or Stonehaven, Paragon and Stonehaven are, and at all times have been, in all material respects in full compliance with, and have not been and are not in violation of or liable under, any Environmental Law. Neither Paragon nor Stonehaven has any

basis to expect, nor have they or any other Person for whose conduct they are or may be responsible for received, any actual or Threatened order, notice, or other communication from (i) any Governmental Body, or (ii) the current or prior owner or operator of any Stonehaven Facilities, of any actual or potential violation or failure to comply with any Environmental Law, or of any actual or Threatened obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Stonehaven Facilities or any other properties or assets (whether real, personal, or mixed) in which Paragon or Stonehaven has or had an interest.

(b) There are no pending or, to the Knowledge of either Paragon or Stonehaven, Threatened claims, Encumbrances or other restrictions of any nature, resulting from any Environmental, Health, and Safety Liabilities or arising under or pursuant to any Environmental Law, with respect to or affecting any of the Stonehaven Facilities or any other properties and assets (whether real, personal, or mixed) in which either Paragon or Stonehaven has or had an interest.

(c) Neither Paragon nor Stonehaven has any Knowledge of any basis to expect, nor has either Paragon or Stonehaven received, any citation, directive, inquiry, notice, Order, summons, warning or other communication that relates to hazardous activity, Hazardous Materials, or any alleged, actual or potential violation or failure to comply with any Environmental Law, or of any alleged, actual or potential obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Stonehaven Facilities or any other properties or assets (whether real, personal, or mixed) in which either Paragon or Stonehaven has or had an interest, or with respect to any property or Stonehaven Facilities to which Hazardous Materials generated, manufactured, refined, transferred, imported, used or processed by either Paragon or Hampton has been transported, treated, stored, handled, transferred, disposed, recycled or received.

(d) To the Knowledge of Paragon and Stonehaven, there has been no Release or Threat of Release, of any Hazardous Materials at or from the Stonehaven Facilities or at any other locations where any Hazardous Materials were generated, manufactured, refined, transferred, produced, imported, used or processed from or by the Stonehaven Facilities or from or by any other properties and assets (whether real, personal, or mixed) in which either Paragon or Stonehaven has or had an interest.

4.13 No Material Adverse Change . Since the date of the Stonehaven Balance Sheet, there has not been any material adverse change in the business, operations, prospects, properties, assets or condition of Paragon or Stonehaven, and to the Knowledge of Paragon and Stonehaven, no event has occurred or circumstance exists that may result in such a material adverse change, and Paragon and Stonehaven have conducted their business in the Ordinary Course of Business.

4.14 Solvency; Cash . Neither Paragon nor Stonehaven is now insolvent and will not be rendered insolvent by any of the Contemplated Transactions. As used in this Section 4.14, “insolvent” means that the sum of the respective debts and other probable Liabilities of Paragon and Stonehaven exceeds the present fair saleable value of their respective assets. As of the date of this Agreement, Stonehaven owns $1,200,000 in cash, including $290,000 in restricted cash.

4.15 Contracts; No Defaults

(a) Stonehaven and Paragon have delivered or made available to Hampton true and complete copies, of:

(i) each Paragon Contract and Stonehaven Contract that involves performance of services by either Paragon or Stonehaven in an amount or value in excess of $50,000;

(ii) each Paragon Contract and Stonehaven Contract that involves performance of services or delivery of goods or materials to either Paragon or Stonehaven of an amount or value in excess of $50,000;

(iii) each Paragon Contract and Stonehaven Contract that was not entered into in the Ordinary Course of Business and that involves expenditures or receipts by either Paragon or Stonehaven in excess of $50,000;

(iv) each lease, rental or occupancy agreement and other Paragon Contract or Stonehaven Contract affecting the ownership of, leasing of, title to, use of, or any leasehold or other interest in, any real or personal property (except personal property leases and installment and conditional sales agreements having a value per item or aggregate payments of less than $50,000 and with terms of less than one year) owned or used by Paragon or Hampton; and

(v) each Paragon Contract and Stonehaven Contract for capital expenditures in excess of $50,000;

(b) Except as set forth in Schedule 4.15(b) :

(i) Paragon and Stonehaven are in material compliance with all terms and requirements of each Paragon Contract and Stonehaven Contract to which it is a party; and

(ii) to the Knowledge of Paragon and Stonehaven, each other Person that has or had any obligation or Liability under any Paragon Contract or Stonehaven Contract is, and has been, in compliance with all material terms and requirements of such Contract.

(c) Attached hereto as Exhibit 4.15 is a true, complete and accurate copy of the Management Agreement, dated as of the 29 ^th day of February, 2000, by and between Stonehaven and Hoyt Properties, Inc., which Management Agreement is currently in full force and effect and binding upon the parties thereto in all respects.

4.16 Insurance . Stonehaven has delivered or made available to Hampton (a) true and complete copies of all policies of insurance to which either Paragon or Stonehaven is a party or under which either Paragon or Stonehaven or any of the assets owned by either Paragon or Stonehaven is covered, and (b) true and complete copies of all pending applications for policies of insurance.

4.17 Employees . Paragon and Stonehaven have delivered or made available to Hampton all policies with respect to vacation pay, holiday or sick pay, severance pay, pension and profit-sharing contributions, health, medical or any other type of employee benefit plan to which either Paragon or Stonehaven presently contributes or is required to contribute. Neither Paragon nor Stonehaven is indebted to any employee other than for wages and benefits earned during the current payroll period that are not yet due and payable. None of the employees of Paragon or Stonehaven is represented by a labor union and no petition has been filed or proceedings instituted within the past five (5) years by any employee or group of employees with any labor relations board seeking recognition of a bargaining representative or alleging any violation of law in connection therewith. There are no controversies or Proceedings pending, or to Stonehaven’s Knowledge Threatened, between either Paragon or Stonehaven and any of its respective employees, which controversies or Proceedings have affected or may affect materially and adversely the business, operations, assets, prospects or condition (financial or otherwise) of either Paragon or Stonehaven.

4.18 Brokers or Finders . Neither Paragon, Stonehaven nor any of their Representatives has incurred any obligation or Liability for brokerage or finders’ fees or agents’ commissions or other similar payments in connection with the Contemplated Transactions.

4.19 SEC Filings . The information supplied by Stonehaven or Paragon expressly for the purpose of inclusion in the Registration Statement shall not at the time the Registration Statement (including any amendments or supplements thereto) is filed or declared effective by the SEC contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading. The information supplied by Stonehaven or Paragon expressly for the purpose of inclusion in the Proxy Statement to be sent to the stockholders of Stonehaven in connection with the Stockholder Meeting to be held in connection with the Contemplated Transactions shall not, on the date the Proxy Statement is first mailed to Stonehaven’s stockholders and, at the time of the Stockholder Meeting, contain any untrue statement of a material fact, or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. If at any time prior to the Closing any event or information should be discovered by Stonehaven or Paragon that should be set forth in an amendment to the Registration Statement or a supplement to the Proxy Statement, they shall promptly inform Hampton.

4.20 Disclosure . No representation or warranty or other statement made by Paragon or Stonehaven in this Agreement, any Schedule or certificate delivered pursuant to the terms of this Agreement or otherwise in connection with the Contemplated Transactions contains any untrue statement or omits to state a material fact necessary to make any of them, in light of the circumstances in which it was made, not misleading. There does not now exist any event, condition or other matter, or any series of events, conditions or other matters, individually or in the aggregate, materially and adversely affecting Paragon’s or Stonehaven’s assets, business, prospects, financial condition or results of its operations that has not been disclosed to Hampton by Paragon on or prior to the date of this Agreement.

5. COVENANTS OF HAMPTON PRIOR TO CLOSING DATE

5.1 Access and Investigation . Between the date of this Agreement and the Closing, and upon reasonable advance notice received by Hampton from Stonehaven, Hampton shall cause Hampton and its Representatives to (a) afford Paragon and Stonehaven and their Representatives (collectively, “ Paragon’s Advisors ”) full and free access to Hampton’s personnel, properties (including subsurface testing), contracts, books and records, and other documents and data, (b) furnish Paragon or Paragon’s Advisors with copies of all such Contracts, books and records, and other existing documents and data relating to the Assets as Paragon and Stonehaven may reasonably request, and (c) furnish Paragon and Paragon’s Advisors with such additional financial, operating and other data and information relating to the Assets as they may reasonably request.

5.2 Operation of the Business of Hampton . Between the date of this Agreement and the Closing, Hampton shall:

(a) conduct its business only in the Ordinary Course of Business and continue to own the Assets, and not sell, agree to sell, mortgage, refinance or in any way further encumber the Assets;

(b) confer with Paragon and Stonehaven concerning operational matters that materially and adversely affect the Assets;

(c) use its Best Efforts to preserve intact the Assets and maintain the relations and goodwill with its creditors, tenants and others having business relationships therewith; and

(d) otherwise report periodically to Paragon and Stonehaven concerning the status of the Assets.

5.3 Notification . Between the date of this Agreement and the Closing, Hampton shall promptly notify Stonehaven if Hampton becomes aware of any fact or condition that causes or constitutes a Breach of any of Hampton’s representations and warranties as of the date of this Agreement, or if Hampton becomes aware of the occurrence of any fact or condition that would (except as expressly contemplated by this Agreement) cause or constitute a Breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition. Should any such fact or condition require any change in any of the Schedules or Exhibits to ensure their accuracy or completeness as of the Closing Date, Hampton shall promptly deliver to Paragon or Stonehaven a supplement to any such Schedule or Exhibit describing such change.

5.4 Best Efforts . Between the date of this Agreement and the Closing Date, Hampton shall use its Best Efforts to cause the conditions in Sections 7, 8.3 and 9 to be satisfied.

5.5 Current Evidence of Title .

(a) As soon as is reasonably possible, and in no event later than thirty business days after the date of this Agreement, Hampton shall furnish to Stonehaven, at Stonehaven’s expense, for each parcel, tract or subdivided land lot comprising the Real Property:

(i) from Commonwealth Land Title Insurance Co. (the “ Title Insurer ”):

(A) a title commitment issued by the Title Insurer to insure title to all land, improvements and insurable appurtenances, if any, in an amount reasonably determined by Hampton, covering the Real Property, naming Paragon as the proposed insured and having an effective date after the date of this Agreement, wherein the Title Insurer agrees to issue an ALTA 1992 form owner’s policy of title insurance (the “ Title Commitment ”); and

(B) complete and legible copies of all recorded documents listed as Schedule B-1 matters to be terminated or satisfied in order to issue the policy described in the Title Commitment or as special Schedule B-2 exceptions thereunder (the “ Recorded Documents ”); and

(b) The Title Commitment shall include the Title Insurer’s requirements for issuing its title policy, which requirements shall be met by Hampton on or before the Closing Date.

(i) any Title Commitment or other evidence of title or search of the appropriate real estate records discloses that any party other than Hampton has title to the insured estate covered by the Title Commitment; or

(ii) any title exception is disclosed in Schedule B to any Title Commitment that is not related to any of the Permitted Encumbrances or one that Hampton specifies when delivering the Title Commitment to Stonehaven as one that Hampton will cause to be deleted from the Title Commitment concurrently with the Closing, including (A) any exceptions that pertain to Encumbrances securing any loans that do not constitute an Assumed Liability and (B) any exceptions that Stonehaven reasonably believes could materially and adversely affect Stonehaven’s use and enjoyment of the Real Property;

then Stonehaven shall notify Hampton in writing (“ Stonehaven’s Notice ”) of such matters within ten (10) business days after receiving the Title Commitment and copies of Recorded Documents.

(d) Hampton shall use its Best Efforts to cure each Title Objection and take all steps required by the Title Insurer to eliminate each Title Objection as an exception to the Title Commitment. Any Title Objection that the Title Company is willing to insure over on terms acceptable to Hampton and Stonehaven is herein referred to as an “ Insured Exception .” The Insured Exceptions, together with any title exception not objected to by Stonehaven in the manner aforesaid shall be deemed to be acceptable to Stonehaven.

6. COVENANTS OF PARAGON AND STONEHAVEN PRIOR TO CLOSING DATE

6.1 Access and Investigation . Between the date of this Agreement and the Closing, and upon reasonable advance notice received by Paragon or Stonehaven from Hampton, Paragon and Stonehaven shall, and shall cause their Representatives to (a) afford Hampton and its Representatives (collectively, “ Hampton’s Advisors ”) full and free access to Paragon’s and Stonehaven’s personnel, properties (including subsurface testing), contracts, books and records, and other documents and data, (b) furnish Hampton’s Advisors with copies of all such contracts, books and records, and other documents and data as Hampton’s Advisors may reasonably request, and (c) furnish Hampton’s Advisors with such additional financial, operating and other data and information as Hampton’s Advisors may reasonably request.

6.2 Operation of the Business of Paragon and Stonehaven . Between the date of this Agreement and the Closing, Paragon and Stonehaven shall:

(a) conduct their respective businesses only in the Ordinary Course of Business;

(b) use their Best Efforts to preserve intact the current business organization of Paragon and Stonehaven, keep available the services of the current officers, employees and agents of Paragon and Stonehaven, and maintain the relations and goodwill with suppliers, customers, landlords, creditors, employees, agents and others having business relationships with Paragon or Stonehaven;

(c) receive the consent of Hampton concerning operational matters of a material nature, including expenditures in excess of $5,000; and

(d) otherwise report periodically to Hampton concerning the status of the business, operations and finances of Paragon and Stonehaven.

6.3 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS . Between the date of this Agreement and the Closing, Paragon and Stonehaven shall cause all indebtedness owed thereto by any Related Person to be paid in full prior to Closing.

6.4 No Negotiation .

(a) Until such time, if any, as this Agreement is terminated pursuant to Section 10, neither Paragon nor Stonehaven shall, and shall cause each of their Representatives not to, directly or indirectly solicit, initiate or encourage any inquiries or proposals from, discuss or negotiate with, provide any non-public information to, or consider the merits of any unsolicited inquiries or proposals from, any Person relating to any transaction involving the sale of the business or assets of Paragon or Stonehaven, or any securities of Paragon or Stonehaven, or any merger, consolidation, business combination or similar transaction involving Paragon or Stonehaven; provided, however, that nothing contained in this Agreement shall prevent Stonehaven (for itself and Paragon), to the extent a majority of its Incumbent Trustees determine, in good faith (after consultation with independent legal advisors), that their fiduciary duties under applicable law require them to do so, from (A) furnishing non-public information to, or entering into discussions or negotiations with, any Person in connection with an unsolicited, bona fide, acquisition proposal by such Person or

recommending an unsolicited, bona fide, acquisition proposal by such Person to the stockholders of Stonehaven, if and only to the extent that (1) the majority of the Incumbent Trustees determine in good faith (after consultation with independent financial and legal advisors) that such acquisition proposal is reasonably capable of being completed on the terms proposed and, after taking into account the strategic benefits anticipated to be derived from the Contemplated Transactions and the long-term prospects of acquiring the Assets, would, if consummated, result in a transaction more favorable to Stonehaven’s stockholders from a financial point of view than the Contemplated Transactions (any such more favorable acquisition proposal being referred to in this Agreement as a “ Superior Proposal ”) and a majority of the Incumbent Trustees determine in good faith (after consultation with independent legal advisors) that such action is necessary for Stonehaven’s board of trustees to comply with its fiduciary duties to stockholders under applicable law and (2) prior to furnishing such non-public information to, or entering into discussions or negotiations with, such person or entity, Stonehaven advises Hampton in writing of such disclosure or discussions or negotiations, including the person or entity to whom disclosed or with whom discussions or negotiations will occur; or (B) complying with Rules 14d-9 and 14e-2 promulgated under the Exchange Act with regard to an acquisition proposal. “ Incumbent Trustee ” shall mean a member of Stonehaven’s board of trustees immediately prior to the signing of this Agreement.

(b) Notwithstanding any of the rights of Stonehaven contained in Section 6.4(a) or elsewhere, if the Contemplated Transactions are not consummated following (i) the determination by the Incumbent Trustees that a Superior Proposal has been received by Stonehaven, (ii) Stonehaven furnishing non-public information to, or entering into discussions or negotiations with, any Person in connection with an unsolicited, bona fide, acquisition proposal by such Person or recommending an unsolicited, bona fide, acquisition proposal by such Person to the stockholders of Stonehaven, or (iii) Stonehaven’s compliance with Rules 14d-9 and 14e-2 promulgated under the Exchange Act with regard to an acquisition proposal, Hampton shall be entitled to receive from Stonehaven, and Stonehaven shall pay to Hampton, a fee equal to $200,000 plus the amount of all expenses and costs (including reasonable attorneys’ fees) incurred by Hampton. Such amount shall be payable in cash to Hampton by Stonehaven with three (3) business days of written demand by Hampton to Stonehaven.

(c) It is understood and agreed to by the parties to this Agreement that the fee payable by Stonehaven to Hampton pursuant to Section 6.4(b) is intended to, and shall, constitute liquidated damages since the actual amount of damages that would be sustained by Hampton as a result of the events described Section 6.4(b) would be difficult, if not impossible, to ascertain.

6.5 Notification . Between the date of this Agreement and the Closing, Stonehaven shall promptly notify Hampton if Stonehaven becomes aware of any fact or condition that causes or constitutes a Breach of any of Stonehaven’s or Paragon’s representations and warranties as of the date of this Agreement, or if Stonehaven becomes aware of the occurrence of any fact or condition that would (except as expressly contemplated by this Agreement) cause or constitute a Breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition. Should any such fact or condition require any change in any of the Schedules to ensure their accuracy or completeness as of the Closing Date, Stonehaven shall promptly deliver to Hampton a supplement to the Schedules describing such change.

6.6 Best Efforts . Between the date of this Agreement and the Closing, Paragon and Stonehaven shall use their Best Efforts to cause the conditions in Sections 7.3, 8 and 9 to be satisfied.

7. CONDITIONS PRECEDENT TO PARAGON’S AND STONEHAVEN’S OBLIGATION TO CLOSE

Paragon’s obligation to acquire the Assets and issue the Paragon Units, and Paragon’s and Stonehaven’s obligation to take any other actions required to be taken thereby at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Stonehaven, in whole or in part):

7.1 Accuracy of Representations . All of Hampton’s representations and warranties in this Agreement must be accurate in all material respects as of the date of this Agreement and as of the time of the Closing as if then made, after giving full effect in each case to any supplements to the Schedules provided by Hampton to Stonehaven in accordance with Section 11.8(d).

7.2 Hampton’s Performance .

(a) All of the covenants and obligations that Hampton is required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been duly performed and complied with in all material respects.

(b) Each document and item required to be delivered by Hampton pursuant to Section 2.5 must have been delivered.

7.3 Consents . Each of the Consents set forth in Schedule 4.2(c) and Schedule 7.3 must have been obtained and must be in full force and effect.

7.4 No Proceedings . Since the date of this Agreement, there must not have been commenced or Threatened against Paragon or Stonehaven any material Proceeding (a) involving any challenge to, or seeking damages or other relief in connection with, any of the Contemplated Transactions, or (b) that may have the effect of preventing, materially delaying, making illegal or otherwise materially interfering with any of the Contemplated Transactions.

7.5 No Prohibition . Neither the consummation nor the performance of any of the Contemplated Transactions shall, directly or indirectly (with or without notice or lapse of time), materially contravene or conflict with, or result in a material violation of, or cause Paragon or Stonehaven to suffer any material adverse consequence under (a) any applicable Legal Requirement or Order, or (b) any Legal Requirement or Order that has been published, introduced or otherwise formally proposed by or before any Governmental Body.

7.6 Additional Documents . Hampton shall have caused to be delivered to Stonehaven certificates dated as of a date not earlier than the third business day prior to the Closing as to the good standing of Hampton and the payment of all applicable state Taxes by Hampton, executed by the appropriate official of the State of Illinois, and each jurisdiction in which Hampton

is licensed or qualified to do business as a foreign corporation, and such other documents as Stonehaven may reasonably request for the purpose of:

(i) evidencing the accuracy of Hampton’s representations and warranties;

(ii) evidencing the performance by Hampton, or the compliance by Hampton with, any covenant or obligation required to be performed or complied with by Hampton under this Agreement;

(iii) evidencing the satisfaction of any condition referred to in this Article 7; or

(iv) otherwise facilitating the consummation or performance of any of the Contemplated Transactions.

7.7 Subscription Agreement . The Subscription Agreement shall be in full force and effect as of the Closing, and the representations made by Hampton thereunder shall continue to be accurate.

8. CONDITIONS PRECEDENT TO HAMPTON’S OBLIGATION TO CLOSE

Hampton’s obligation to contribute the Assets, accept the Paragon Units and to take any other action required to be taken by Hampton at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Hampton, in whole or in part):

8.1 Accuracy of Representations . All of Paragon’s and Stonehaven’s representations and warranties in this Agreement (considered collectively), and each of these representations and warranties (considered individually), shall have been accurate in all material respects as of the date of this Agreement, and shall be accurate in all material respects as of the time of the Closing as if then made, after giving full effect in each case to any supplements to the Schedules provided by Stonehaven or Paragon to Hampton in accordance with Section 11.8(d).

8.2 Paragon’s Performance .

(a) All of the covenants and obligations that Paragon and Stonehaven are required to perform or to comply with pursuant to this Agreement at or prior to the Closing (considered collectively), and each of these covenants and obligations (considered individually), shall have been duly performed and complied with in all material respects.

(b) Each document required to be delivered by Paragon or Stonehaven pursuant to Section 2.5 shall have been delivered.

8.3 Consents . Each of the Consents set forth in Schedule 3.2(c) and Schedule 8.3 must have been obtained and must be in full force and effect.

8.4 Additional Documents . Stonehaven shall have caused the following to be delivered to Hampton:

(a) Certificates dated as of a date not earlier than the third business day prior to the Closing as to the good standing of Paragon and Stonehaven and the payment of all applicable state Taxes by Paragon and Stonehaven, executed by the appropriate official of the State of Delaware as to Paragon, and Maryland as to Stonehaven, and each jurisdiction in which Paragon or Stonehaven is licensed or qualified to do business as a foreign corporation; and

(b) Such other documents or information as Hampton may reasonably request for the purpose of:

(i) evidencing the accuracy of any of Paragon’s and Stonehaven’s representations and warranties in this Agreement;

(ii) evidencing the performance by Paragon and Stonehaven of, or the compliance by Paragon and Stonehaven with, any covenant or obligation required to be performed or complied with by Paragon or Stonehaven under this Agreement;

(iii) evidencing the satisfaction of any condition referred to in this Article 8;

(iv) evidencing that the applicability of the Maryland Business Combination Act (MGCL §§ 3-601 to 3-604) has been waived in writing by Stonehaven’s board of trustees with respect to the Contemplated Transactions ;

(v) evidencing that Stonehaven’s bylaws have been amended to exempt the Contemplated Transactions from the applicability of the Maryland Control Share Acquisition Act (MGCL §§ 3-701 to 3-709);

(vi) otherwise facilitating the consummation or performance of any of the Contemplated Transactions.

8.5 No Proceedings . Since the date of this Agreement, there must not have been commenced or Threatened against Hampton, or against any Person affiliated with Hampton, any material Proceeding (a) involving any challenge to, or seeking damages or other relief in connection with, any of the Contemplated Transactions, or (b) that may have the effect of preventing, materially delaying, making illegal or otherwise materially interfering with any of the Contemplated Transactions.

8.6 No Prohibition . Neither the consummation nor the performance of any of the Contemplated Transactions shall, directly or indirectly (with or without notice or lapse of time), materially contravene, or conflict with, or result in a material violation of, or cause Hampton or any Person affiliated with Hampton to suffer any material adverse consequence under (a) any applicable Legal Requirement or Order, or (b) any Legal Requirement or Order that has been published, introduced or otherwise formally proposed by or before any Governmental Body.

9. ADDITIONAL CONDITIONS PRECEDENT AND COVENANTS

9.1 Additional Events . In addition to the conditions precedent to the parties obligations hereunder as set forth in Section 7 and Section 8, each party’s obligation to take any action required to be taken thereby at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions:

(a) Each of the following events must have occurred at or prior to the Closing:

(i) the voting and stock restriction agreement, in substantially the form of Exhibit 9.1(a)(i) , shall have been executed by the parties thereto and shall be in full force and effect;

(ii) the agreement of limited partnership of Paragon, in substantially the form of Exhibit 9.1(a)(ii) , shall have been executed by the parties thereto and shall be in full force and effect;

(iii) the severance arrangement of Duane Lund, as described in Exhibit 9.1(a)(iii) , shall have been approved by Stonehaven’s board of trustees in accordance with all applicable Legal Requirements and shall be in full force and effect;

(iv) the Amendment No. 1 to the Agreement of Limited Partnership of Wellington, in substantially the form of Exhibit 9.1(a)(iv) , shall have been executed by the parties thereto and shall be in full force and effect;

(v) the individuals identified on Schedule 9.1(a)(v) , shall be the only members of Stonehaven’s board of trustees;

(vi) the holders of all applicable classes of Stonehaven’s capital stock shall have approved (a) Stonehaven’s execution and performance of the restricted stock agreements of even date herewith by and between Stonehaven and the individuals identified therein, (b) Stonehaven’s execution and performance of this Agreement, (c) a waiver of the April, 2003 dividend payable on the Class A Preferred Stock, and (d) an amendment to Stonehaven’s Declaration of Trust to eliminate the mandatory Class A Preferred Stock dividend in favor of a dividend payable thereon at the discretion of Stonehaven’s board of trustees;

(vii) the additional contribution agreement, in substantially the form of Exhibit 9.1(a)(vii) , shall have been executed by the parties thereto and shall be in full force and effect;

(viii) eighty percent (80%) or more of the issued and outstanding Class A Preferred Stock shall have been subject to the Exchange Offer and exchanged for shares of Common Stock at a rate equal to 22.881 shares of Stonehaven’s Common Stock for each share of Class A Preferred Stock;

(ix) all matters contemplated by Section 9.3 as being submitted for stockholder approval at the Stockholder Meeting shall have been approved and adopted by the holders of the Common Stock as of the record date set for the Stockholder Meeting;

(x) the filing with the American Stock Exchange of a Notification Form for Listing of Additional Shares with respect to: (A) all shares of Class A Preferred Stock issued or to be issued to Paragon Real Estate Development, LLC; and (B) the shares of Common Stock issuable (1) to Hampton upon conversion of the Paragon Units, (2) to Paragon Real Estate Development, LLC upon conversion of any shares of Class A Preferred Stock issued or to be issued thereto, and (3) in connection with the Exchange Offer, shall have been made and be effective;

(xi) the Registration Statement shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings by a Governmental Body seeking a stop order. The Proxy Statement shall have been delivered to the stockholders of Stonehaven in accordance with the requirements of the Securities Act and the Exchange Act;

(xii) each of Steve Hoyt, Duane Lund, Paul Lambert, James C. Mastandrea (“ Mr. Mastandrea ”), John J. Dee and Paragon Real Estate Development, LLC shall have agreed to convert the shares of Class A Preferred Stock owned by them, respectively, into shares of Common Stock pursuant to the terms of the Exchange Offer; provided, however, that Messrs. Mastandrea and Dee may retain, on an unconverted basis, an amount of Class A Preferred Stock equal to not more than fifty-one percent (51%) of the total shares of Class A Preferred Stock outstanding following completion of the Exchange Offer;

(xiii) Amendment No. 1 to the Agreement of Limited Partnership of Wellington shall have been approved by the limited partners of Wellington to extent required by the Agreement of Limited Partnership of Wellington; and

(xiv) no more than ten percent (10%) of the holders of Class A Preferred Stock shall have exercised dissenters’ appraisal rights available thereto, if any.

(b) In addition to the foregoing conditions precedent, Hampton’s obligation to consummate the Closing is expressly subject to the individuals identified on Schedule 9.1(b) having resigned in writing as members of Stonehaven’s board of trustees as of the date of this Agreement.

9.2 SEC Filings .

(a) As promptly as practicable after the execution of this Agreement, Stonehaven and Hampton shall prepare proxy materials and the Proxy Statement relating the issuance of: (i) Class A Preferred Stock to Paragon Real Estate Development, LLC; and (ii) the shares of Common Stock issuable (A) to Hampton upon conversion of the Paragon Units, (B) to Paragon Real Estate Development, LLC upon conversion of any Class A Preferred Stock issued or to be issued thereto, and (C) in connection with the Exchange Offer, election of directors, amendment to the terms of the Class A Preferred Stock and any other matter requiring stockholder approval as a result of the Contemplated Transactions; and, as promptly as practicable, Stonehaven shall file with the SEC the Registration Statement for the Exchange Offer. The Proxy Statement and Registration Statement

shall comply in form in all material respects with applicable law and SEC requirements and each of Stonehaven and Hampton shall use all commercially reasonable efforts to cause the Registration Statement to become effective as soon thereafter as practicable. Each of Stonehaven and Hampton shall use all commercially reasonable efforts to respond as promptly as practicable to any comments of the SEC with respect thereto and to cause the Proxy Statement to be mailed to the stockholders of Stonehaven as promptly as practicable after the Registration Statement is declared effective under the Securities Act. Each of Stonehaven and Hampton shall furnish all information concerning it (and its respective subsidiaries and Related Parties) to the other and to the SEC as may be reasonably requested in connection with any such action and the preparation, filing and distribution of the Registration Statement and the Proxy Statement. Each of Stonehaven and Hampton shall promptly notify the other upon the receipt of any comments from the SEC or its staff or any request from the SEC or its staff for amendments or supplements to the Registration Statement or the Proxy Statement and shall promptly provide the other with copies of all correspondence between it and its representatives, on the one hand, and the SEC and its staff, on the other hand. Notwithstanding the foregoing, prior to filing the Registration Statement (or any amendment or supplement thereto) or filing or mailing the Proxy Statement (or any amendment or supplement thereto) or responding to any comments of the SEC with respect thereto, each of Stonehaven and Hampton, as the case may be, (i) shall provide the other party with a reasonable opportunity to review and comment on such document or response, (ii) shall include in such document or response all comments reasonably proposed by such other party and (iii) shall not file or mail such document or respond to the SEC prior to receiving such other party’s approval, which approval shall not be unreasonably withheld or delayed. “ Exchange Offer ” means the offer of Stonehaven to exchange 22.881 shares of Common Stock for each share of its outstanding Class A Preferred Stock.

(b) Hampton shall, at its own expense (except to the extent provided in Section 6.4 and Section 11.1), cooperate with Stonehaven in all reasonable respects in connection with the preparation and filing with the SEC of the Registration Statement and Proxy Statement (and any amendment or supplement to either thereof). Without limiting the foregoing, Hampton shall (i) prepare interim financial statements for Hampton (“ Hampton Interim Financials ”), if required in connection with the Registration Statement or Proxy Statement that are suitable for inclusion by Stonehaven in the Public Filings, including compliance with the applicable provisions of Regulation S-X of the Exchange Act, (ii) use its best efforts to obtain written consents of its independent public accountants, when required, with respect to its financial statements and any Hampton Interim Financials so that such financial statements can be used in registration statements filed under the Securities Act and reports under the Securities Exchange Act (“ Public Filings ”), issued or filed by Stonehaven, and (iii) cooperate with Stonehaven so Stonehaven can obtain information sufficient for Stonehaven to comply with the requirements of the Management’s Discussion and Analysis portion of the Public Filings, as it may relate to Stonehaven and its subsidiaries.

9.3 Stockholder Meeting . Stonehaven shall promptly after the date hereof take all actions necessary to call a meeting of its stockholders to be held as promptly as practicable for the purpose of voting upon the matters specified in Section 9.2 above, which meeting shall be held (to the extent permitted by law) within forty-five (45) days of the date on which the Registration Statement is declared effective, provided that, Stonehaven may adjourn the Stockholder Meeting until such time as its conditions to the consummation of the transactions contemplated hereby have

been, or within two (2) business days are reasonably expected to be, satisfied or waived by Stonehaven.

9.4 Indemnification . The Bylaws and Declaration of Trust of Stonehaven with respect to indemnification of present and former directors, officers and employees of Stonehaven shall not be amended, repealed or otherwise modified for a period of six (6) years from the Closing in any manner that would adversely affect the rights thereunder as of the Closing Date of individuals who at the Closing Date are present or former directors, officers or employees of Stonehaven, unless such modification is required after the Closing by applicable law. For a period of six (6) years after the Closing, Stonehaven shall use commercially reasonable efforts to cause to be maintained in effect directors and officers liability insurance covering those persons who are currently covered by policies of directors and officers liability insurance maintained by Stonehaven on terms substantially similar to those applicable under such current policies with respect to claims arising from and related to facts or events which occurred at or before the Closing. In the event Stonehaven or any successor to Stonehaven (a) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (b) transfers all or substantially all of its properties or assets to any Person, then, and in each case, proper provision shall be made so that the successors of the Stonehaven honor the obligations of Stonehaven set forth in this Section. The provisions of this Section shall survive the Closing and expressly are intended to benefit each of the individuals covered hereby.

9.5 Directors and Officers . As of the date hereof, the board of trustees of Stonehaven shall be expanded to consist of nine trustees, and Mr. Mastandrea, John J. Dee, Michael T. Oliver and Daniel G. DeVos shall be appointed as trustees (“ New Trustees ”). Each New Trustee shall be subject to election by Stonehaven’s stockholders at the Stockholder Meeting. Mr. Mastandrea shall be appointed to the class of trustees with a term ending in 2006, Mr. Dee shall be appointed to the class of trustees with a term ending in 2005, Mr. Oliver shall be appointed to the class of trustees with a term ending in 2005, and Mr. DeVos shall be appointed to the class of trustees with a term ending in 2006. Each such New Trustees has signed a letter in the form attached as Exhibit 9.5 hereto, indicating such New Trustees agreement to resign from the board of trustees effective immediately, without further action on the part of such Trustee, if stockholder approval of the Contemplated Transactions is not received at the Stockholder Meeting.

9.6 Certain Post-Closing Covenants .

(a) Promptly following the Closing, Stonehaven and Paragon shall refinance the Real Property in such amount as may be necessary to provide $750,000 in additional cash from the equity of the Real Property.

(b) Stonehaven shall not, and shall not permit Wellington to, amend, terminate, modify or breach the Management Agreement dated as of the 29 ^th day of February, 2000, with Hoyt Properties, Inc. in effect for the properties owned by Wellington until the expiration of the purchase option contained in Amendment No. 1 to the Agreement of Limited Partnership of Wellington.

10. TERMINATION.

10.1 Termination Events . This Agreement may, by notice given prior to or at the Closing, be terminated:

(a) by Hampton if a material Breach of any provision of this Agreement has been committed by Paragon or Stonehaven, and such Breach has not been waived, or by Stonehaven if a material Breach of any provision of this Agreement has been committed by Hampton, and such Breach has not been waived;

(b) (i) by Stonehaven if any of the conditions in Section 7 or Section 9 have not been satisfied as soon as reasonably practicable after the Stockholder Meeting, or if satisfaction of any such condition is or becomes impossible (other than through the failure of Paragon, Stonehaven or any of its Representatives to comply with its obligations under this Agreement) and, as to Section 7 only, Stonehaven has not waived such condition on or before the Closing Date; or (ii) by Hampton, if any of the conditions in Section 8 or Section 9 have not been satisfied as soon as reasonably practicable after the Stockholder Meeting, or if satisfaction of any such condition is or becomes impossible (other than through the failure of Hampton to comply with their obligations under this Agreement) and, as to Section 8 only, Hampton has not waived such condition on or before the Closing Date;

(d) by either Hampton or Stonehaven if the Closing has not occurred (other than through the failure of any party seeking to terminate this Agreement to comply fully with its obligations under this Agreement) on or before the 31 ^st day of December, 2003, or such later date as the parties may agree upon.

10.2 Effect of Termination . Each party’s right of termination under Section 10.1 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be deemed an election of remedies. If this Agreement is terminated pursuant to Section 10.1, all further obligations of the parties under this Agreement will terminate; provided, however, that if this Agreement is terminated by a party because of the Breach of the Agreement by the other party or because one or more of the conditions to the terminating party’s obligations under this Agreement is not satisfied as a result of the other party’s failure to comply with its obligations under this Agreement, the terminating party’s right to pursue all legal remedies will survive such termination unimpaired.

11. GENERAL PROVISIONS

11.1 Expenses . Upon Closing, Stonehaven shall bear all fees and expenses incurred by Stonehaven, Paragon and Hampton in connection with the preparation, negotiation, execution and performance of this Agreement and the Contemplated Transactions, including all fees and expense of their respective Representatives, provided, however, that Stonehaven is only obligated to pay such expenses of Hampton if the Contemplated Transactions are consummated.

11.2 Public Announcements . Any public announcement, press release or similar publicity with respect to this Agreement or the Contemplated Transactions will be issued, if at all, at such time and in such manner as Hampton and Stonehaven collectively determine or as may be required by law. Except with the prior consent of Hampton and Stonehaven, neither Hampton, Paragon or Stonehaven nor any of their respective Representatives shall disclose to any Person any information about the Contemplated Transactions, including the status of discussions or negotiations, the execution of any documents (including this Agreement) or any of the terms of the Contemplated Transactions or the related documents (including this Agreement).

11.3 Notices . All notices, Consents, waivers and other communications required by this Agreement shall be in writing and shall be deemed given to a party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (b) sent by facsimile or e-mail with confirmation of transmission by the transmitting equipment; or (c) received or rejected by the addressee, if sent by certified mail, return receipt requested, in each case to the following addresses, facsimile numbers or e-mail addresses and marked to the attention of the person (by name or title) designated below (or to such other address, facsimile number, e-mail address or person as a party may designate by notice to the other parties):

Hampton:		Paragon Real Estate Development, LLC
		1240 Huron Road, Suite 301
		Cleveland, Ohio 44115
Attention:		James C. Mastandrea
Fax no.:		216.430.0043
E-mail address:		ewccjcm@aol.com

with a mandatory copy to:		Kohrman Jackson & Krantz P.L.L.
		One Cleveland Center, 20 ^th Floor
		1375 East Ninth Street
		Cleveland, Ohio 44114
Attention:		Marc C. Krantz, Esq.
Fax no.:		216.621.6536
E-mail address:		mck.kjk.com

Paragon and Stonehaven:		Stonehaven Realty Trust
		5620 Smetana Drive, Suite 130
		Minneapolis, MN 55343
Attention:		Duane Lund
Fax no.:		952.935.5659
E-mail address:		duane@stonehavenco.com

with a mandatory copy to:		Robins, Kaplan, Miller & Ciresi L.P.P.
		2800 LaSalle Place
		800 LaSalle Avenue
		Minneapolis, MN 44402-2015
Attention:		Robert T. Montague, Esq.
Fax no.:		612.339.4181

E-mail address:

rtmontague@robins.com

11.4 Jurisdiction; Service of Process . Any Proceeding arising out of or relating to this Agreement or any Contemplated Transaction may be brought in the courts of the State of Ohio, County of Cuyahoga, or, if it has or can acquire jurisdiction, in the United States District Court for the Northern District of Ohio, and each of the parties irrevocably submits to the exclusive jurisdiction of each such court in any such Proceeding, waives any objection it, he or she may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of the Proceeding shall be heard and determined only in any such court and agrees not to bring any Proceeding arising out of or relating to this Agreement or any Contemplated Transaction in any other court. The parties agree that any or all of them may file a copy of this paragraph with any court as written evidence of the knowing, voluntary and bargained agreement between the parties irrevocably to waive any objections to venue or to convenience of forum. Process in any Proceeding referred to in the first sentence of this section may be served on any party anywhere in the world.

11.5 Enforcement of Agreement . Each party hereto acknowledges and agrees that the other parties hereto would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that any Breach of this Agreement could not be adequately compensated in all cases by monetary damages alone. Accordingly, in addition to any other right or remedy to which any party may be entitled, at law or in equity, they shall individually be entitled to enforce any provision of this Agreement by a decree of specific performance and to temporary, preliminary and permanent injunctive relief to prevent Breaches or threatened Breaches of any of the provisions of this Agreement, without posting any bond or other undertaking.

11.6 Waivers; Remedies Cumulative . The rights and remedies of the parties are cumulative and not alternative. Neither any failure nor any delay by any party in exercising any right, power or privilege under this Agreement or any of the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement or any of the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other parties; (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of that party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

11.7 Entire Agreement and Modification . This Agreement supersedes all prior agreements, whether written or oral, between the parties with respect to its subject matter and constitutes (along with the Schedules, Exhibits and other documents delivered pursuant to this Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended, supplemented or otherwise modified except by a written agreement executed by the party to be charged with the

amendment, provided, however, that any amendment, modification or waiver of this Agreement by Stonehaven or Paragon prior to the Closing must be made or given only by a majority of the Incumbent Trustees.

11.8 Schedules .

(a) The information in the Schedules constitutes (i) exceptions to particular representations, warranties, covenants and obligations of Hampton as set forth in this Agreement or (ii) descriptions or lists of items referred to in this Agreement. If there is any inconsistency between the statements in this Agreement and those in any Schedule (other than an exception expressly set forth as such in any Schedule with respect to a specifically identified representation or warranty), the statements in this Agreement will control.

(b) Any disclosure under one Schedule or any part or section thereof shall be deemed disclosure under all parts or sections of the other Schedules and this Agreement. Disclosure of any matter in any Schedule shall not constitute an expression of a view that such matter is material or is required to be disclosed pursuant to this Agreement.

(c) To the extent that any representation or warranty set forth in this Agreement is qualified by the materiality of the matter(s) to which the representation or warranty relates, the inclusion of any matter in the Schedules does not constitute a determination by Hampton that any such matter is material. The disclosure of any information concerning a matter in the Schedules does not imply that any other, undisclosed matter that has a greater significance or value is material.

(d) Notwithstanding anything in this Agreement to the contrary, if any Schedule or Exhibit referred to herein is omitted or incomplete at the time this Agreement is executed, such omission or incompleteness shall not relieve any party of any of its obligations hereunder or constitute an event pursuant to which this Agreement may be terminated; provided, however, that the parties deliver the omitted or incomplete Schedules or Exhibits within ten days of the date this Agreement is executed, and such Schedules or Exhibits are reasonably acceptable in form and substance to the other parties.

11.9 Assignment; Successors and No Third-Party Rights . No party may assign any of its, his or her rights or delegate any of its, his or her obligations here under without the prior written consent of the other parties. This Agreement will apply to, be binding in all respects upon and inure to the benefit of the successors and permitted assigns of the parties. Nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement, except such rights as shall inure to a successor or permitted assignee pursuant to this Section 11.9.

11.10 Severability . If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

11.11 Construction . The headings of Articles and Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Articles,” “Exhibits,” “Sections” or “Schedules” refer to the corresponding Articles, Sections, Exhibits and Schedules of this Agreement.

11.12 Time of the Essence . With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

11.13 Governing Law . This Agreement will be governed by and construed under the laws of the State of Ohio without regard to conflicts-of-laws principles that would require the application of any other law.

11.14 Execution of Agreement . This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures for all purposes.

11.15 Stonehaven Obligations . The Liability of Paragon hereunder shall be joint and several with Stonehaven. Where in this Agreement provision is made for any action to be taken or not taken by Paragon, Stonehaven jointly and severally undertakes to cause Paragon to take or not take such action, as the case may be.

11.16 Usage .

( a) In this Agreement, unless a clear contrary intention appears, (i) the singular number includes the plural number and vice versa, (ii) reference to any gender includes each other gender, (iii) reference to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof, (iv) reference to any Legal Requirement means such Legal Requirement as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder, and reference to any section or other provision of any Legal Requirement means that provision of such Legal Requirement from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision, (v) “hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article, Section or other provision hereof, (vi) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term, (vii) references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto, and (viii) “party” and “parties” shall be deemed references to the Hampton, Paragon and Stonehaven individually or collectively, as the context requires.

(b) Unless otherwise specified herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP.

(c) This Agreement was negotiated by the parties with the benefit of legal representation, and any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party shall not apply to any construction or interpretation hereof.

[ Signatures appear on the following page. ]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written.

Hampton Court Associates, L.P.


By:
	James C. Mastandrea, General Partner


Paragon Real Estate, L.P.


By:
	Duane Lund, Chief Executive Officer of General Partner, Stonehaven Realty Trust


Stonehaven Realty Trust


By:
	Duane Lund, Chief Executive Officer

Exhibit 2.2

VOTING AND STOCK RESTRICTION AGREEMENT

by and among

Stonehaven Realty Trust,

Steven B. Hoyt,

Duane H. Lund,

Paul T. Lambert,

John J. Dee,

James C. Mastandrea,

and

Paragon Real Estate Development, LLC

Dated: , 2003

VOTING AND STOCK RESTRICTION AGREEMENT

This VOTING AND STOCK RESTRICTION AGREEMENT (this “ Agreement ”), is made and entered into as of the day of , 2003, by and among STONEHAVEN REALTY TRUST, a Maryland real estate investment trust (the “ Company ”), STEVEN B. HOYT, a Minnesota resident (“ Hoyt ”), DUANE H. LUND, a Minnesota resident (“ Lund ”), PAUL T. LAMBERT, a Colorado resident (“ Lambert ”), JAMES C. MASTANDREA, an Ohio resident (“ Mastandrea ”), JOHN J. DEE, an Ohio resident (“ Dee ”), and PARAGON REAL ESTATE DEVELOPMENT LLC, an Ohio limited liability company (“Paragon”). Hoyt, Lund, and Lambert are hereinafter collectively referred to as the “ Current Management ” and individually as a “ Current Manager .”

WHEREAS, the parties hereto wish to provide for certain voting and resale restrictions on the Current Management Shares (as hereinafter defined).

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the adequacy of which is hereby acknowledged, the parties hereto agree as follows:

1. Definitions . As used in this Agreement, the following terms have the meanings set forth below:

“ Affiliate ” means any Person who is an “affiliate” as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

“ Agreement ” has the meaning assigned to such term in the recitals to this Agreement.

“ Average Daily Volume ” means the daily number of shares of Common Stock and Preferred Stock (calculated on an as-if converted basis) traded on the American Stock Exchange, averaged for the trading days in a period of 180 days.

“ Block Limit ” has the meaning assigned to such term in Section 3.2.1 of this Agreement.

“ Board ” means the Board of Trustees of the Company.

“ Common Stock ” means the Company’s common stock, par value $.01 per share.

“ Common Stock Equivalents ” means any security or obligation which is by its terms convertible into shares of Common Stock, including, without limitation, the Preferred Stock and any option, warrant or other subscription or purchase right with respect to Common Stock or Preferred Stock.

“ Company ” has the meaning assigned to such term in the recitals to this Agreement.

“ Company Option ” has the meaning assigned to such term in Section 3.2.4 of this Agreement.

“ Company Option Period ” has the meaning assigned to such term in Section 3.2.4 of this Agreement.

“ Contract Date ” has the meaning assigned to such term in Section 3.2.5 of this Agreement.

“ Current Management ” has the meaning assigned to such term in the recitals to this Agreement.

“ Current Manager Permitted Transferee ” has the meaning assigned to such term in Section 3.1.1 of this Agreement.

“ Current Management Shares ” means all shares, whether now owned or hereafter acquired, of Common Stock, Preferred Stock or Common Stock Equivalents beneficially owned or owned of record by the Current Managers, provided , however , for the purposes of any computation of the number of Current Management Shares either outstanding, owned or held by any Current Manager, or otherwise to be determined pursuant to this Agreement, any shares of Common Stock issuable upon conversion, exercise or exchange of all Common Stock Equivalents shall be deemed outstanding whether or not such conversion, exercise or exchange has actually been effected.

“ Current Manager ” has the meaning assigned to such term in the recitals to this Agreement.

“ Dee ” has the meaning assigned to such term in the recitals to this Agreement.

“ Expiration Time ” has the meaning assigned to such term in section 5.1 of this Agreement.

“ Family Members ” means a member of immediate family, which shall include his or her spouse, siblings, children or grandchildren.

“ Governmental Authority ” means the government of any nation, state, city, locality or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“ Hoyt ” has the meaning assigned to such term in the recitals to this Agreement.

“ Lambert ” has the meaning assigned to such term in the recitals to this Agreement.

“ Lund ” has the meaning assigned to such term in the recitals to this Agreement.

“ Mastandrea ” has the meaning assigned to such term in the recitals to this Agreement.

“ Offer Price ” has the meaning assigned to such term in Section 3.2.3 of this Agreement.

“ Offered Securities ” has the meaning assigned to such term in Section 3.2.3 of this Agreement.

“ Offering Notice ” has the meaning assigned to such term in Section 3.2.3 of this Agreement.

“ Paragon ” has the meaning assigned to such term in the recitals to this Agreement.

“ Person ” means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint stock company, trust, unincorporated organization, Governmental Authority or other entity.

“ Proxy ” has the meaning assigned to such term in Section 5.4 of this Agreement.

“ Preferred Stock ” means the Company’s Class A Cumulative Convertible Preferred Shares, par value $0.01 per share, or the Company’s Class B Junior Cumulative Convertible Preferred Shares, par value $0.01 per share.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“ Selling Manager ” has the meaning assigned to such term in Section 3.2.3 of this Agreement.

“ Third Party Purchaser ” has the assigned to such term in Section 3.2.3 of this Agreement.

“ Volume Limit ” has the meaning assigned to such term in Section 3.2.1 of this Agreement

2. Intentionally Omitted.

3. Volume Limitations and Right of First Offer of Current Management Shares .

3.1 Current Manager Permitted Transferees .

3.1.1 Permitted Transfers . Notwithstanding the terms of Section 3.2 of this Agreement, but subject to Sections 3.1.2 and 3.1.3, each Current Manager may at all times transfer all or any portion of his Current Management Shares to or among (a) any other Current Manager, (b) such Current Manager’s Family Members or (c) a trust, corporation, partnership or limited liability company, all of the beneficial interests in which shall be held by such Current Manager or one or more Family Members of such Current Manager or which would otherwise be an Affiliate of such Current Manager; provided , however , that during the period that any such trust, corporation, partnership or limited liability company holds any right, title or interest in any Current Management Shares, no Person other than such Current Manager or one or more Family Members of such Current Manager may be or become owners, controlling persons, beneficiaries, shareholders, limited or general partners or members thereof. The Persons referred to in clauses (a), (b) and (c) of the preceding sentence are each referred to hereinafter as a “ Current Manager Permitted Transferee .” A Current Manager Permitted Transferee may transfer its Current Management Shares pursuant to this Section 3.1.1 back to the transferor Current Manager or to a Person that is a Current Manager Permitted Transferee of such transferor Current Manager.

3.1.2 Permitted Transfer Procedures . If a Current Manager wishes to transfer Current Management Shares to a Current Manager Permitted Transferee under Section 3.1.1, such Current Manager shall give notice to the Company of its intention to make any transfer permitted under Section 3.1.1 not less than ten (10) days prior to effecting such transfer, which notice shall state the name and address of each Current Manager Permitted Transferee to whom such transfer is proposed and the number of Current Management Shares proposed to be transferred to such Current Manager Permitted Transferee.

3.1.3 Transfers in Compliance with Law; Substitution of Transferee . Notwithstanding any other provision of this Agreement, no transfer to a Current Manager Permitted Transferee may be made pursuant to this Section 3.1 unless (a) the Current Manager Permitted Transferee has agreed in writing to be bound by the terms and conditions of this Agreement pursuant to an instrument in the form attached hereto as Exhibit A , (b) the transfer complies in all respects with the applicable provisions of this Agreement and (c) the transfer complies in all respects with applicable federal and state securities laws, including, without limitation, the Securities Act. If requested by the Company in its reasonable judgment, an opinion of counsel to such transferring Current Manager shall be supplied to the Company at such transferring Current Manager’s expense, to the effect that such transfer complies with the applicable federal and state securities laws. Upon becoming a party to this Agreement, the Current Manager Permitted Transferee shall be substituted for, and shall enjoy the same rights and be subject to the same obligations as, the transferring Current Manager hereunder with respect to the Current Management Shares transferred to such Current Manager Permitted Transferee.

3.2 Proposed Transfers, Volume Limits and Block Limits .

3.2.1 Volume and Block Limits . For a period of two years following the Closing Date (as defined in the Contribution Agreement), the Current Management Shares shall be

subject to the limitations on transfer imposed by this Section 3.2. For the purposes of this Section 3.2, the term “ Volume Limit ” means that number of Current Management Shares equal to ten percent (10%) of the Average Daily Volume, calculated as of the date of the proposed sale or the date of the Offering Notice, as applicable. The term “ Block Limit ” means that number of Current Management Shares equal to four and one-half percent (4.5%) of the total shares of Common Stock outstanding (assuming conversion into Common Stock of all outstanding Common Stock Equivalents) on the date of the proposed sale or the date of the Offering Notice, as applicable.

3.2.2 Transfers . Subject to Section 3.2.3 through Section 3.2.5, a Current Manager may freely sell, transfer, assign or otherwise convey any number of Current Management Shares owned thereby at any time; provided, however, that the number of Current Management Shares sold, transferred, assigned or otherwise conveyed on any given day by such Current Manager does not exceed the higher of the Volume Limit or the Block Limit.

3.2.3 Offering Notice . If a Current Manager (a “ Selling Manager ”) desires to sell, transfer, assign or convey all or any portion of his Current Management Shares to any Person (other than to a Current Manager Permitted Transferee) (a “ Third Party Purchaser ”), such Selling Manager shall first offer such Current Management Shares for sale to the Company by sending written notice (the “ Offering Notice ”) to the Company, which shall state (a) the number of Current Management Shares proposed to be sold, transferred, assigned or conveyed (“ Offered Securities ”) and (b) the proposed purchase price per Current Management Share that the Selling Manager is willing to accept (the “ Offer Price ”). Upon delivery of the Offering Notice, such offer shall be irrevocable unless and until the rights to purchase provided for in this Section 3.2.3 shall have been waived by the Company or shall have expired.

3.2.4 Company Option; Exercise . For a period of ten (10) days after the Company’s receipt of the Offering Notice delivered pursuant to Section 3.2.3 (the “ Company Option Period ”), the Company or Paragon shall have the right (the “ Company Option ”), but not the obligation, to purchase any or all of the Offered Securities at a purchase price equal to the Offer Price and upon the terms and conditions set forth in the Offering Notice. The right of the Company to purchase any or all of the Offered Securities under this Section 3.2.4 shall be exercisable by delivering written notice of the exercise thereof, prior to the expiration of the 10-day period referred to above, to the Selling Manager, which notice shall state the number of Offered Securities proposed to be purchased by the Company. The failure of the Company to respond within such 10-day period shall be deemed to be a waiver of the Company’s rights under this Section 3.2.4, provided that the Company may waive its rights under this Section 3.2.4 prior to the expiration of such 10-day period by giving written notice to the Selling Manager.

3.2.5 Sale to a Third Party Purchaser . Unless the Company elects to purchase all, but not less than all, of the Offered Securities under Sections 3.2.3 and 3.2.4, the Selling Manager may sell the Offered Securities to a Third Party Purchaser on the terms and conditions set forth in the Offering Notice; provided , however , that such sale is bona fide and made pursuant to a contract entered into within ninety (90) days after the expiration of the Company

Option Period (such date to be referred to herein as the “ Contract Date ”). If such sale is not consummated within forty-five (45) days of the Contract Date for any reason, then the restrictions provided for herein shall again become effective, and no transfer of such Offered Securities may be made thereafter by the Selling Manager without again offering the same to the Company in accordance with this Section 3.2.

4. After-Acquired Securities . The provisions of this Agreement shall apply to the Common Stock, Preferred Stock and Common Stock Equivalents and all other securities issued or to be issued by the Company, which are now owned, or hereafter acquired, by a Current Manager, including, without limitation, any additional issuance, purchase, exchange or reclassification of any of such securities, corporate reorganization, or any other form of recapitalization, consolidation, merger, stock split or stock dividend, or which are acquired by a Current Manager in any other manner. Any issuance of shares of Common Stock or any Common Stock Equivalents by the Company in violation of this Section 4 shall be null and void ab initio .

5. Voting Agreement .

5.1 Transferee of Shares to be Bound by this Agreement . Each Current Manager hereby agrees that from the date hereof until the second anniversary of the Closing Date (as defined in the Contribution Agreement) (the “ Expiration Time ”), such Current Manager shall not direct, cause or permit any transfer of such Current Manager’s Current Management Shares to be effected unless the proposed transferee agrees to be bound by the terms of this Section 5 and executes and delivers to the Company a voting agreement and proxy in the exact form of this Section 5 prior to the transfer; provided , however , that this Section 5 does not apply to any Current Management Shares sold by the Current Management in the open market. The Company agrees that, during the period from the date of this Agreement through the Expiration Time, it will not recognize as valid or otherwise any transfer or purported transfer effected in violation of this Agreement.

5.2 Agreement to Vote Shares . Each Current Manager agrees that, during the period from the date of this Agreement through the Expiration Time, at every meeting of the shareholders of the Company called, and at every adjournment thereof, and on every action or approval by written consent of the shareholders of the Company, all the Current Management Shares then beneficially owned or owned of record by such Current Manager shall be voted (i) in favor of the adoption and approval of the Contribution Agreement and the other transactions contemplated thereby, and in favor of any matter that could reasonably be expected to facilitate the transactions contemplated by the Contribution Agreement (to the extent that such Current Manager has a right to vote thereon), and (ii) against any proposal that (A) impairs in any material respect the ability of the Company to perform its obligations under the Contribution Agreement or (B) prevents or materially delays the consummation of the transactions contemplated by the Employment Agreement, Restricted Share Agreement, Modification Agreement, and Contribution Agreement, provided , however , that this Section 5.2, and the proxy related to matters covered by this Section 5.2, shall be null and void to the extent the Company’s Board has determined that such Board’s fiduciary duties under applicable law require it to withdraw its recommendation of the preceding agreements and the related transactions.

5.3 Shareholder Capacity . New Management acknowledges and agrees that Current Management executes and delivers this Agreement solely in their capacity as the record holders and beneficial owners of the Current Management Shares and no provision of this Agreement shall limit or otherwise restrict Current Management with respect to any act or omission that Current Management may undertake or authorize in their capacities as officers of the Company or as members of the Board including, without limitation, any vote that Current Management may make in their capacity as trustees of the Company with respect to any matter presented to the Board.

5.4 Irrevocable Proxy . Concurrently with the execution of this Agreement, each Current Manager shall deliver to New Management an originally executed proxy in the form attached hereto as Exhibit B (the “ Proxy ”), which shall be deemed to be coupled with an interest and shall therefore be irrevocable to the fullest extent permitted by law with respect to the Current Management Shares referred to therein. Current Management agrees that to the extent Current Management acquires additional Current Management Shares after the date hereof and prior to the Expiration Time, Current Management shall promptly deliver to Mastandrea an originally executed Proxy with respect to such additional Current Management Shares.

6. Intentionally Omitted.

7. Miscellaneous .

7.1 Notices . All notices, demands or other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first class mail, return receipt requested, facsimile, courier service, overnight mail or personal delivery:

(a) if to the Company:

Stonehaven Realty Trust
5620 Smetana Drive, Suite 130
Minnetonka, Minnesota 55343
Facsimile: (952) 935-5659
with a copy to:

Robins, Kaplan, Miller & Ciresi L.L.P.
2800 LaSalle Plaza
800 LaSalle Avenue
Minneapolis, Minnesota 55402-2015
Facsimile: (612) 339-4181
Attention: Robert T. Montague, Esq.

(b) if to the Current Management:

Hoyt Properties, Inc.

708 South Third Street, Suite 108
Minneapolis, Minnesota 55415
Facsimile: (612) 338-7797

with a copy to:

Robins, Kaplan, Miller & Ciresi L.L.P.
2800 LaSalle Plaza
800 LaSalle Avenue
Minneapolis, Minnesota 55402-2015
Facsimile: (612) 339-4181
Attention: Robert T. Montague, Esq.

Paragon Real Estate Development, LLC
1240 Huron Road, Suite 301
Cleveland, Ohio 44115
Attention: John Dee
Facsimile: 216-430-0046

with a copy to:

Kohrman Jackson & Krantz, P.L.L.
One Cleveland Center, 20 ^th Floor
1375 East Ninth Street
Cleveland, Ohio 44114
Attention: Marc C. Krantz, Esq.
Facsimile: 216-621-6536

Any party may, by notice given in accordance with this Section 7.1, designate another address or Person for receipt of notices hereunder. All such notices and communications shall be deemed to have been duly given when delivered by hand, if personally delivered; when delivered by courier or overnight mail, if delivered by commercial courier service or overnight mail; five (5) business days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if sent by facsimile.

7.2 Amendment and Waiver .

(a) No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and

are not exclusive of any remedies that may be available to the parties hereto at law, in equity or otherwise.

(b) Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by any party from the terms of any provision of this Agreement, shall be effective only if it is made or given in writing and signed by all of the parties hereto.

7.3 Specific Performance . The parties hereto intend that each of the parties has the right to seek damages or specific performance in the event that any other party hereto fails to perform such party’s obligations hereunder. Therefore, if any party shall institute any action or proceeding to enforce the provisions hereof, any party against whom such action or proceeding is brought hereby waives any claim or defense therein that the plaintiff party has an adequate remedy at law.

7.4 Headings . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

7.5 Severability . If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

7.6 Entire Agreement . This Agreement together with the exhibits hereto, is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings in respect of the subject matter contained herein, other than those set forth or referred to herein. This Agreement, together with the exhibits hereto, supersedes all prior agreements and understandings between the parties with respect to such subject matter.

7.7 Variations in Pronouns . All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.

7.8 GOVERNING LAW . THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.

7.9 Further Assurances . Each of the parties shall, and shall cause their respective Current Manager Permitted Transferees to execute such instruments and take such action as may be

reasonably required or desirable to carry out the provisions hereof and the transactions contemplated hereby.

7.10 Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties and their respective Current Manager Permitted Transferees, successors, heirs, legatees and legal representatives. This Agreement is not assignable, except that each of the Current Managers may assign his rights under this Agreement to any of his Current Manager Permitted Transferees.

7.11 Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which taken together, when executed and delivered, shall constitute one and the same instrument.

* * * * * * *

[Remainder of page intentionally left blank; signatures follow]

IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date first written above.

STONEHAVEN REALTY TRUST

PARAGON REAL ESTATE DEVELOPMENT, LLC

By:

Name:

Title:

CURRENT MANAGEMENT

JAMES C. MASTANDREA

Steven B. Hoyt

James C. Mastandrea

Duane H. Lund

JOHN J. DEE

Paul T. Lambert

John J. Dee

Exhibit A

ACKNOWLEDGMENT AND AGREEMENT

The undersigned wishes to receive from (“Transferor”) certain shares or certain options, warrants or other rights to purchase Common Shares, without par value (the “Shares”), of Stonehaven Realty Trust, a Maryland real estate investment trust (the “Company”);

The Shares are subject to the Voting and Stock Restriction Agreement, dated , 2003 (the “Agreement”), among the Company, Steven B. Hoyt, Duane H. Lund, Paul T. Lambert, James C. Mastandrea, John J. Dee, and Paragon Real Estate Development, LLC;

The undersigned is a Permitted Transferee under the Agreement;

The undersigned has been given a copy of the Agreement and afforded ample opportunity to read it, and the undersigned is thoroughly familiar with its terms;

Pursuant to terms of the Agreement, the Transferor is prohibited from transferring such Shares and the Company is prohibited from registering the transfer of the Shares unless and until the undersigned acknowledges the terms and conditions of the Agreement and agrees to be bound thereby; and

The undersigned wishes to receive such Shares and have the Company register the transfer of such Shares.

NOW, THEREFORE, in consideration of the mutual premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and to induce the Transferor to transfer such Shares to the undersigned and the Company to register such transfer, the undersigned does hereby acknowledge and agree that (i) the undersigned has been given a copy of the Agreement and ample opportunity to read it, and the undersigned is thoroughly familiar with its terms, (ii) the Shares are subject to the terms and conditions set forth in the Agreement, and (iii) the undersigned does hereby agree fully to be bound thereby.

This day of , 20 .

Exhibit B

IRREVOCABLE PROXY

The undersigned shareholder of Stonehaven Realty Trust, a Maryland real estate investment trust (the “Company”), hereby irrevocably (to the fullest extent permitted by law) appoints James Mastandrea and John Dee, and each of them, as the sole and exclusive attorneys-in-fact and proxies of the undersigned, with full power of substitution and resubstitution, to vote and exercise all voting rights (to the fullest extent that the undersigned is entitled to do so) with respect to all of the outstanding shares of capital stock of the Company that are owned beneficially by the undersigned as of the date of this Proxy (collectively, the “Shares”) only in accordance with the terms of this Proxy. The Shares owned beneficially by the undersigned shareholder as of the date of this Proxy are listed on the final page of this Proxy. Upon the undersigned’s execution of this Proxy, any and all prior proxies given by the undersigned with respect to any of the Shares are hereby revoked and the undersigned agrees not to grant any subsequent proxies with respect to the voting rights granted by this Proxy until after the Expiration Time (as defined below).

This Proxy is irrevocable (to the fullest extent permitted by law), is coupled with an interest in the Company and is granted pursuant to that certain Voting and Stock Restriction Agreement, dated as of even date herewith, by and between the Company, Steven B. Hoyt, Duane H. Lund, Paul T. Lambert, James C. Mastandrea, John J. Dee, and Paragon Real Estate Development, LLC (the “Voting and Stock Restriction Agreement”) and as an inducement to the New Management (as defined in the Voting and Stock Restriction Agreement) to enter into the Contribution Agreement, dated as of even date herewith, by and between the Company and the other parties named therein (as amended, modified or supplemented in accordance with its terms, the “Contribution Agreement”). As used herein, the term “Expiration Time” shall mean the earlier to occur of (i) the termination of the Contribution Agreement prior to the Closing Date (as such term is defined in the Contribution Agreement) in accordance with its terms and (ii) the second anniversary of the Closing Date (as such term is defined in the Contribution Agreement).

The attorneys-in-fact and proxies named above, and each of them, are hereby authorized and empowered by the undersigned, at any time prior to the Expiration Time, to act as the undersigned’s attorney-in-fact and proxy to vote the Shares, and to exercise all voting, consent and similar rights of the undersigned with respect to the Shares (including, without limitation, the power to execute and deliver written consents), at every annual, special or adjourned meeting of shareholders of the Company and in every written consent in lieu of such meeting (i) in favor of the adoption and approval of the Contribution Agreement and the other transactions contemplated thereby, and in favor of any matter that could reasonably be expected to facilitate the transactions contemplated by the Contribution Agreement (to the extent that the undersigned has a right to vote thereon), and (ii) against any proposal that (A) impairs in any material respect the ability of the Company to perform its obligations under the Contribution Agreement or (B) prevents or materially delays the consummation of the transactions contemplated by the Contribution Agreement, provided , however , that this proxy shall be null and void to the extent the Company’s Board of Trustees has determined, pursuant to the Contribution Agreement, that such Board’s fiduciary duties under applicable law require it to withdraw its recommendation of the Contribution Agreement and the related transactions.

Any obligation of the undersigned hereunder shall be binding upon the successors, heirs and legal or personal representatives of the undersigned, and shall survive the death or incapacity of the undersigned.

This Proxy shall terminate, and be of no further force and effect, automatically at the Expiration Time.

* * *

Dated: , 2003


		[Shareholder – Print Name]

		By:

		Shares of Company capital stock beneficially owned and subject to this Proxy: • shares of common stock. • no shares of preferred stock. • shares of common stock issuable upon exercise of outstanding options, warrants or other rights. • no shares of preferred stock issuable upon exercise of outstanding options, warrants or other rights.


		WITNESS:



		[Name]

Exhibit 2.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made at Cleveland, Ohio, this day of , 2003, between STONEHAVEN REALTY TRUST, a Maryland business trust (the “Trust”), and JAMES C. MASTANDREA, 9520 Metcalf Road, Waite Hill, Ohio 44094 (“Mastandrea”).

WITNESSETH:

WHEREAS, at the time set forth herein, Mastandrea will hold the offices of Chairman of the Board of Trustees, Chief Executive Officer and President of the Trust;

WHEREAS, Mastandrea is expected to make major contributions toward the business of the Trust; and

WHEREAS, the Trust and Mastandrea desire to enter into this Agreement pursuant to which the Trust will 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:

1. EMPLOYMENT, CONTRACT PERIOD. During the period specified in this Section 1, the Trust shall employ Mastandrea, and Mastandrea shall serve the Trust, on the terms and subject to the conditions set forth herein. The initial term of Mastandrea’s employment hereunder shall commence as of the date specified in the first sentence of this Agreement (the “Effective Date”) and, subject to prior termination as provided in Section 8, shall continue through the second anniversary of the Effective Date. The term of Mastandrea’s employment hereunder shall be automatically renewed on the second anniversary of the Effective Date and on each succeeding anniversary of the Effective Date thereafter for succeeding terms of one year each, unless either party shall have given, at least 90 days prior to the expiration of any term, written notice of his or its intention not to renew the term of Mastandrea’s employment hereunder, except that no extension of the term of Mastandrea’s employment hereunder shall extend beyond the date of Mastandrea’s 70 ^th birthday, though he may continue as a Trustee beyond his 70 ^th birthday. The term of Mastandrea’s employment hereunder is sometimes hereinafter referred to as the “Contract Period.”

2. POSITION, DUTIES, RESPONSIBILITIES.

(a) Except as set forth in Section 2(b), at all times during the Contract Period, Mastandrea shall have the titles of Chairman of the Board of Trustees, Chief Executive Officer and President of the Trust and shall have and perform the duties and responsibilities of those offices (the “Offices”), subject to the authority of the Board of Trustees of the Trust (the “Board of Trustees”). In addition, Mastandrea may hold such other offices as may be designated from time to time by the Board of Trustees.

(b) Mastandrea will not be appointed to Chief Executive Officer (“CEO”) until five (5) days after the filing of the December 31, 2002 Form 10-KSB with the Securities and Exchange Commission (the “SEC”). Other than the occurrence of the foregoing event, no

further action by the Trust is required for Mastandrea to be appointed CEO. Until Mastandrea becomes CEO hereunder, it is intended that he shall under no circumstances be considered the principal executive officer of the Trust or be considered to be performing similar functions as such terms are used in Form 10-KSB or Item 307 of Regulation S-B as promulgated by the SEC.

(c) At all times during the Contract Period, Mastandrea shall devote substantially all of his business time, energy, and talent to the business of and to the furtherance of the purposes and objectives of the Trust, and neither directly nor indirectly render any business, commercial, or professional services to any other person, firm, or organization for compensation without the prior approval of the Board of Trustees. Nothing in this Agreement shall preclude Mastandrea from devoting reasonable periods of time to charitable and community activities, service on boards of other companies (public or private) not in competition with the Trust, undertaken after consultation with the Board of Trustees; or the management of his personal investment assets provided:

(i) such activities do not interfere with the performance by Mastandrea of his duties hereunder;

(ii) Mastandrea does not make any single investment in excess of $500,000 in the outstanding securities of a publicly owned equity real estate investment trust or of any other entity engaged primarily in the ownership and/or management of real estate, other than the Trust. This limitation shall not apply to the continued holding by Mastandrea of any investments that were held by him on January 1, 2003 and have been held by him continuously thereafter and any holding by Mastandrea that is approved by the independent Trustees of the Board of Trustees; and

(iii) Mastandrea does not advise, assist, or render any services, either directly or indirectly, to a publicly-owned equity real estate investment trust or in any other entity engaged primarily in the ownership and/or management of real estate that competes with the Trust (except that this limitation shall not apply to the continued holding by Mastandrea of any investments that were held by him on January 1, 2003 and have been held by him continuously thereafter), other than the Trust.

(d) The duties to be performed by Mastandrea under this Agreement shall be performed primarily in Cuyahoga County at the offices of the Trust, and he shall not be required to perform services elsewhere except for travel incident to his performance of services hereunder.

3. BASE SALARY AND PLAN COMPENSATION.

(a) The rate of Mastandrea’s base salary hereunder as of the Effective Date shall be $60,000 per year. The rate of Mastandrea’s base salary is considered to be below the market rate for executives with similar experience and shall be reviewed at least annually during the Contract Period and may be adjusted from time to time, based upon such standards as the Board of Trustees may determine to be appropriate, except that no such adjustment shall result in a reduction of Mastandrea’s base salary below the level for the preceding year during the

Contract Period.

(b) Mastandrea shall receive the awards and any other compensation that have been earned during the Contract Period and that he is entitled to receive under any of the Trust’s present or future share option, incentive compensation, or executive bonus plan in which he is entitled to participate (such awards and other compensation are hereinafter referred to as “Plan Compensation”).

4. BENEFITS. During the Contract Period, and to the extent available and adopted by the Board of Trustees, the Trust shall provide Mastandrea (a) health and welfare benefits, including health insurance, travel accident insurance, life and accidental death insurance, and long term disability upon the same terms and conditions as to the other executives, (b) directors and officers liability insurance, (c) a parking space, (d) memberships in a business club in downtown Cleveland, if any, as may be deemed necessary by Mastandrea, and (e) such other benefits as the Board of Trustees may from time to time authorize.

5. SPLIT DOLLAR LIFE INSURANCE. Before the end of the Contract Period, the Board of Trustees will consider whether it would be appropriate for the Trust to enter into a split-dollar agreement with respect to an insurance policy on the life of Mastandrea with a death benefit for a specific amount payable to Mastandrea’s designated beneficiary, provided, however, that such benefits or payments shall at all times be subject to the Sarbanes-Oxley Act of 2002, as may be amended from time to time, and to the rules issued by the SEC thereunder.

6. REIMBURSEMENT FOR EXPENSES. Subject to such limitations as may be reasonably imposed by the Board of Trustees from time to time, the Trust shall reimburse Mastandrea for all reasonable, ordinary, and necessary expenses incurred by him in the performance of his duties hereunder, provided, however, that such benefits or payments shall at all times be subject to the Sarbanes-Oxley Act of 2002, as may be amended from time to time, and to the rules issued by the SEC thereunder; and provided, further, that Mastandrea accounts to the Trust therefor in a manner sufficient to substantiate deductions with respect to those expenses by the Trust for federal income tax purposes.

7. EFFECT OF DISABILITY DURING CONTRACT PERIOD. If, during the Contract Period, Mastandrea becomes disabled as determined by a physician acceptable to Mastandrea and the Trust, by reason of physical or mental impairment, to such an extent that he is unable to substantially perform his duties under this Agreement (“Disabled”):

(a) The Trust may relieve Mastandrea of his duties under this Agreement for as long as Mastandrea is Disabled.

(b) So long as Mastandrea remains Disabled, the Trust shall continue to pay Mastandrea the base salary and bonus (cash and stock) at the rate in effect immediately before he became Disabled, net of any other disability benefits paid to him by the Trust or any insurance funded by the Trust, the Trust shall continue to provide those health and welfare benefits, including contribution to any pension plan, that were being provided to Mastandrea immediately before he became Disabled, and Mastandrea shall continue to earn the Plan Compensation (other than bonus) to which he would have been entitled under Section 3(b) had he continued to be actively employed, until the earliest of (i) the first date on which he is no longer Disabled, (ii) the date of his death, (iii) the date on which Mastandrea attains age 70, or (iv) the third anniversary

of the date on which he became Disabled. If Mastandrea becomes Disabled, thereafter recovers sufficiently to be able to substantially perform his duties, and later becomes Disabled again, the combined period in which Mastandrea is entitled to receive disability benefits under this Section 7(b) shall not exceed three years.

8. TERMINATION.

(a) DEATH OR DISABILITY. Mastandrea’s employment hereunder will terminate immediately upon Mastandrea’s death and the Trust shall not be obligated to pay Mastandrea any further compensation hereunder except through the date of death. The Trust may terminate Mastandrea’s employment hereunder immediately upon giving notice of termination if Mastandrea is Disabled for an aggregate of 90 days (whether business or non-business days and whether or not consecutive) during any period of twelve consecutive calendar months; in the event of any such termination, the disability benefits payable under Section 7(b) shall be in lieu of any payments upon termination under Section 9.

(b) FOR CAUSE. The Trust may terminate Mastandrea’s employment under this Agreement for “Cause” if:

(i) Except by reason of being Disabled, Mastandrea fails substantially to devote the time and effort required for him to perform his duties hereunder;

(ii) Except by reason of being Disabled, Mastandrea fails to follow directions from the Board of Trustees that are appropriate in the context of his status as an executive officer of the Trust;

(iii) Mastandrea is convicted of a felony involving moral turpitude;

(iv) Mastandrea engages in acts in violation of the provisions of Section 2(c), the confidentiality provisions of Section 13 or otherwise breaches the terms of this Agreement in any material respect; or

(v) Mastandrea willfully, wantonly, voluntarily, and without approval of the Board of Trustees takes any action that he knows to be materially adverse to the interest of the Trust and its shareholders, collectively.

Any termination of Mastandrea’s employment for Cause shall be effective immediately upon the Trust giving Mastandrea 30 days’ notice of termination of employment and the grounds therefore. However, if any failure on Mastandrea’s part referred to in clause (i), (ii) or (iv) of this Section 8(b) is curable, the Trust may not terminate Mastandrea’s employment unless the Board of Trustees first gives him written notice specifying the nature of the failure and the steps that he must take to cure the failure, and Mastandrea fails to take those steps within 30 days after the notice is given.

(c) BY THE TRUST WITHOUT CAUSE. The Trust may terminate Mastandrea’s employment hereunder without Cause at any time upon 30 days’ notice from the Board of Trustees to Mastandrea.

(d) BY MASTANDREA FOR GOOD REASON. Mastandrea may terminate his employment hereunder for “Good Reason” if one or more of the events listed in clauses (i) through (vi) of this Section 8(d) occurs, provided, however, that for termination under any of subsections (i) – (vi) below, Mastandrea must provide the Trust with a written notice of termination, specifying with particularity the events constituting Good Reason and the Trust shall have a period of 30 days to cure such events:

(i) Mastandrea’s base salary is reduced from the amount in effect for the preceding year;

(ii) The Trust fails to provide the Plan Compensation contemplated by Section 3(b) (after such Plan Compensation has been adopted by the Board of Trustees or a committee thereof);

(iii) The Trust fails in any material respect to provide benefits in accordance with Section 4 or to consider the appropriateness of the split-dollar insurance in accordance with Section 5, in either case after Mastandrea has given the Trust written notice of the failure, and the Trust has failed to effect a cure within 30 days after the notice is given;

(iv) Mastandrea is removed from any of his Offices or responsibilities or his duties with the Trust are otherwise reduced to such an extent that he no longer has authority commensurate with an executive officer of the Trust (except as such removal and termination is permitted under this Agreement);

(v) Mastandrea’s principal place of employment for the Trust is relocated outside of the Cleveland metropolitan area and, as a result, he is required to relocate outside the Cleveland metropolitan area; or

(vi) After a Shift in Ownership (as defined in Section 11), the Board of Trustees fundamentally changes its strategic plan in a manner opposed by Mastandrea. Mastandrea may not terminate his employment under this clause (vi) unless he first gives the Board of Trustees written notice of specifying the change or changes that he opposes and the steps that the Board of Trustees must take to rectify the strategic plan, and the Board of Trustees fails to take those steps within 30 days after the notice is given.

(e) BY MASTANDREA WITHOUT GOOD REASON. Mastandrea may terminate his employment hereunder without Good Reason at any time upon 30 days’ advance notice from Mastandrea to the Board of Trustees and upon such termination the Trust shall be obligated to pay Mastandrea only as set forth in Section 9 (a) of this Agreement.

9. PAYMENTS UPON TERMINATION. Following any termination of Mastandrea’s employment with the Trust, the Trust shall pay and provide to Mastandrea, after

the date of the termination (the “Termination Date”), the amounts and benefits provided in this Section 9.

(a) TERMINATION BY THE TRUST OR BY MASTANDREA FOR ANY REASON. Upon any termination of Mastandrea’s employment for any reason, the Trust (i) shall pay to Mastandrea all unpaid base salary and other benefits (e.g., accrued vacation) with respect to periods ending on or before the Termination Date and (ii) shall provide to Mastandrea all Plan Compensation that has been earned and vested prior to the Termination Date, subject to the terms and provisions of the applicable plans.

(b) TERMINATION BY THE TRUST WITHOUT CAUSE, OR BY MASTANDREA FOR GOOD REASON. If Mastandrea’s employment hereunder is terminated by the Trust without Cause or by Mastandrea for Good Reason, in addition to (but not in duplication of) the salary and Plan Compensation under Section 9(a), Trust shall pay and provide to Mastandrea the following amounts and benefits through the third anniversary of the Termination Date (the “Benefit Termination Date”) at the same times as those amounts and benefits would have been paid and provided if Mastandrea had continued in the active employ of the Trust through the Benefit Termination Date:

(i) Base salary and bonus (cash and stock) at the rate in effect immediately before the Termination Date.

(ii) Those health and welfare benefits including contribution to any pension plan that were being provided to Mastandrea immediately before the Termination Date through the Benefit Termination Date.

(iii) In addition to any benefits Mastandrea is or may be entitled to under any retirement plan or program in which he participates, if after a Shift in Ownership an amount equal to three (3) times the total amount contributed by the Trust to Mastandrea’s account under the pension plan and any excess benefit plan related thereto, with respect to the plan year immediately prior to the Termination Date provided such payment shall not be duplicative of any payment made or to be made under subsection (ii) above.

(iv) Continued vesting of share options held by Mastandrea through the Benefit Termination Date and the ability to exercise vested options through the later to occur of the expiration date of the share options or the Benefit Termination Date, as if Mastandrea had remained employed by the Trust.

(v) Continued earning of any restricted shares held by Mastandrea. After the Termination Date, against delivery to the Trust of the certificate or certificates representing all of the restricted shares, the Trust will issue to Mastandrea an unlegended certificate or certificates for the shares whose restrictions have lapsed. If the market price of the shares at the Benefit Termination Date exceeds the market price of the shares at the Termination Date, the Trust will promptly issue to Mastandrea an unlegended certificate for the

balance of the shares due to him.

(vi) Continued accrual and vesting through the Benefit Termination Date of any Plan Compensation not referred to above and the ability to exercise vested awards through the later to occur of the expiration date of the awards or the Benefit Termination Date, as if Mastandrea had remained employed by the Trust.

(vii) If termination occurs six months before or six months after a Shift of Ownership, the Trust shall pay to Mastandrea the base salary and bonus in Section 9(b)(i) immediately in a lump sum; continue health and welfare benefits in Section 9(b)(ii) through the Benefit Termination Date; pay any pension or retirement plan payments in clause (ii) and (iii) of Section 9(b) immediately in a lump sum; all unvested share options in Section 9(b)(iv) shall become vested; all restrictions on restricted shares in Section 9(b)(v) shall lapse and an unlegended certificate for the shares whose restriction has lapsed shall be issued to Mastandrea; and immediate accrual, vesting, and payment of all items under Section 9(b)(vi).

(c) SHARE OPTIONS. If Mastandrea’s employment hereunder is terminated by the Trust without Cause or by Mastandrea for Good Reason, each of Mastandrea and the Trust shall have the right to “cash out” outstanding vested options held by Mastandrea by the payment of the aggregate spread between the exercise prices of the options and the last reported sales price of the shares on the Termination Date, but only to the extent permitted by loan and other covenants then applicable to the Trust. Subject to the Sarbanes-Oxley Act of 2002, as may be amended from time to time, and to the rules issued by the SEC thereunder, the Trust may, at its election, pay up to 60% of this amount by delivery of a promissory note, provided that the note is backed by an “Unconditional Letter of Credit”, by a Bank acceptable to Mastandrea, with principal payable in equal quarterly installments over a period of four years and interest at a rate equal to prime as quoted by National City Bank, Cleveland, Ohio, plus 1%, compounded quarterly; the balance of the amount will be paid in cash.

(d) FULL SATISFACTION. Payment and provision of the salary and benefits to which Mastandrea is entitled under this Section 9 shall constitute full satisfaction of all obligations of the Trust to Mastandrea arising under this Agreement and/or in connection with the termination of his employment. The Plan Compensation and any other benefits or compensation provided to Mastandrea under this Section 9 shall not be subject to mitigation under any circumstances.

10. EFFECT OF FAILURE TO EXTEND TERM. If either the Trust or Mastandrea gives notice to the other of an intention not to extend the term of Mastandrea’s employment hereunder for an additional year, as contemplated in Section 1, that notice shall be treated as a notice of intended termination of Mastandrea’s employment as of the end of then term. Accordingly, the termination of his employment will be treated as a termination by the Trust or by Mastandrea, as the case may be, with or without Cause, and for or not for Good Reason, as the case may be. This Section 10 is not intended to abrogate the specific notice requirements applicable to a termination for Cause under clause (i) or (ii) of Section 8(b) or to a termination for Good Reason under Section 8(d).

11. SHIFT IN OWNERSHIP.

(a) A “Shift in Ownership” shall be deemed to have occurred if at any time before the Termination Date any Person (other than the Trust, any subsidiary of the Trust, any employee benefit plan or employee share ownership plan of the Trust or any subsidiary of the Trust, or any person organized, appointed, or established by the Trust or any subsidiary of the Trust for or pursuant to the terms of any such plan), alone or together with any of its affiliates or associates:

(i) causes Mastandrea not to be appointed as Chief Executive Officer, in accordance with the intent herein;

(ii) or, if Mastandrea is appointed as Chief Executive Officer, causes Mastandrea to be removed as Chairman and Chief Executive Officer, and such change is not supported by Mastandrea.

(b) In the event of a Shift in Ownership of the Trust, (i) all share options then outstanding will become fully exercisable as of the date of the Shift in Ownership, (ii) all restrictions and conditions applicable to restricted stock and other stock awards will be deemed to have been satisfied as of the date of the Shift in Ownership, and (iii) all cash awards will be deemed to have been fully earned as of the date of the Shift in Ownership.

12. EXCESS PARACHUTE PAYMENT REDUCTION.

(a) Anything in this Agreement to the contrary notwithstanding, if it is determined that any payment or distribution by the Trust to or for the benefit of Mastandrea (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be nondeductible by the Trust for Federal income tax purposes because of Section 280G of the Internal Revenue Code and applicable regulations promulgated thereunder, then the aggregate present value of amounts payable or distributable to or for the benefit of Mastandrea pursuant to this Agreement (such payments or distributions pursuant to this Agreement are hereinafter referred to as “Agreement Payments”) shall be reduced (but not below zero) to the Reduced Amount. The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of Agreement Payments without causing any Payment to be nondeductible by the Trust because of Section 280G of the Internal Revenue Code and applicable regulations promulgated thereunder. For purposes of this Section 12, present value shall be determined in accordance with Section 280G(d)(4) of the Internal Revenue Code and applicable regulations promulgated thereunder. All determinations required to be made under this Section 12 shall be made by the Accounting Firm (as defined in Section 12(b)) which shall provide detailed supporting calculations both to the Trust and Mastandrea within 30 days after the Termination Date or such earlier time as is requested by the Trust. The Trust and Mastandrea shall cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. All such determinations by the Accounting Firm shall be final and binding upon the Trust and Mastandrea. Mastandrea shall determine which of the Agreement Payments (or, at the election of Mastandrea, other payments) shall be eliminated or reduced consistent with the requirements of this Section 12, provided that, if Mastandrea does not make such determination within 20 days of the receipt of the calculations made by the Accounting Firm, the Trust shall elect which of the Agreement Payments shall be eliminated or reduced consistent with the requirements of this Section 12, and shall notify Mastandrea

promptly of such election. All costs and expenses relating to the determinations to be made hereunder shall be borne solely by the Trust.

(b) The term “Accounting Firm” means the independent auditors of the Trust for the fiscal year preceding the year in which the Shift in Ownership occurred and such firm’s successor or successors; provided, however, if such firm is unable or unwilling to serve and perform in the capacity contemplated by this Agreement, Mastandrea shall select another national or regional accounting firm of recognized standing to serve and perform in that capacity under this Agreement, except that such other accounting firm shall not be the then independent auditors for the Trust.

13. CONFIDENTIALITY. Mastandrea acknowledges that the business in which the Trust is engaged is competitive and that his employment with the Trust has required and will require that he have access to and knowledge of confidential and proprietary information pertaining to the Trust’s operations and its properties (“Confidential Information”). Mastandrea shall not, during the term of his employment hereunder or at any time thereafter, except in connection with the performance of services hereunder or in furtherance of the business of the Trust, communicate, divulge, or disclose to any other person not a Trustee, officer, employee, or affiliate of, or not engaged to render services to or for, the Trust or use for his own benefit or purposes any Confidential Information that he has obtained from the Trust during the Contract Period, except that this provision shall not preclude Mastandrea from communication or use of Confidential Information made known generally to the public by any party unrelated to Mastandrea, or from making any disclosure required by applicable law, rules, regulations, or court or governmental or regulatory authority order or decree provided that, if practicable, Mastandrea shall not disclose any Confidential Information without first giving the Trust notice of intention to make that disclosure and an opportunity to interpose an objection to the disclosure.

14. DEFERRAL OF PAYMENT OF COMPENSATION UNDER CERTAIN CIRCUMSTANCES.

(a) SECTION 162(M). For purposes of this Section 14, the term “Section 162(m)” shall mean Section 162(m) of the Internal Revenue Code (which, as amended by the Revenue Reconciliation Act of 1993, prescribes rules disallowing deductions for certain “applicable employee remuneration” to any of five specified “covered employees” of a publicly held corporation in excess of $1,000,000 per year), as from time to time amended, and the corresponding provisions of any similar law subsequently enacted, and to all regulations issued under that section and any such provisions.

(b) DEFERRAL. For purposes of this Section 14, “Excess Compensation” as determined by the Accounting Firm, as defined in Section 12(b) shall mean the amount of compensation (including base salary, bonus and the lapse of restrictions on restricted shares granted to Mastandrea) otherwise paid or provided to Mastandrea by the Trust under this Agreement at any particular time (the “Scheduled Time”) that, after giving effect to all elective deferrals of compensation, (i) would not be deductible by the Trust if paid at the Scheduled Time by reason of the disallowance rules of Section 162(m), and (ii) would be deductible by the Trust if deferred until and paid during a later year.

(c) RESTRICTED SHARES. Except as provided in Section 14(e) or Section 14(f), if and to the extent that the lapse of restrictions on restricted shares at the

Scheduled Time would result in Excess Compensation, Mastandrea will forfeit the restricted shares immediately prior to the Scheduled Time. Thereafter, the Trust will deliver to Mastandrea a number of unrestricted shares equal to the number of restricted shares forfeited, together with an amount equal to any and all dividends that would have been paid on those shares from the Scheduled Time through the date of delivery, during the year that is determined by the Accounting Firm to be the first year following the Scheduled Time during which the unrestricted shares and dividends can be delivered without disallowance of the deduction for payment of the compensation by reason of Section 162(m). If the Accounting Firm determines that in any such year a portion, but not all, of the unrestricted shares and dividends can be delivered without disallowance of the deduction, the Trust will deliver to Mastandrea the portion that can be so delivered, and, except as provided in Section 14(e) or Section 14(f), the remainder of the unrestricted shares and dividends will be delivered at a later date.

(d) DEFERRED CASH COMPENSATION. Except as provided in Section 14(e) or Section 14(f), if and to the extent that the payment of cash compensation would result in Excess Compensation, after the forfeiture of any restricted shares under Section 14(c), payment of the cash compensation will be deferred. Thereafter, the Trust will pay to Mastandrea the amount of the deferred compensation, together with accrued interest, during the year that is determined by the Accounting Firm to be the first year following the Scheduled Time during which the compensation can be paid without disallowance of the deduction for payment of the compensation by reason of Section 162(m). If the Accounting Firm determines that in any such year a portion, but not all, of the deferred compensation and interest can be paid without disallowance of the deduction, the Trust will pay to Mastandrea the portion that can be so paid, and, except as provided in Section 14(e) or Section 14(f), the remainder of the deferred compensation and interest will be paid at a later date. For purposes hereof, interest will accrue from the date on which the compensation would have been paid but for this Section 14(d) through the date of payment at a rate equal to prime plus 1% quoted by National City Bank, Cleveland, Ohio, compounded quarterly.

(e) EARLY DELIVERY OF UNRESTRICTED SHARES OR PAYMENT OF DEFERRED COMPENSATION. If the Accounting Firm determines that the delivery to Mastandrea of the unrestricted shares and dividends under Section 14(c), or the payment to Mastandrea of the deferred compensation and interest under Section 14(d), will not result in a deduction to the Trust, even if paid in a later year, the Trust will, within three months of the date on which that determination is made, deliver to Mastandrea those unrestricted shares and dividends, or pay to Mastandrea that deferred compensation and interest, as the case may be.

(f) DELIVERY OR PAYMENT FOLLOWING TERMINATION OF EMPLOYMENT IN ALL EVENTS. Within three months of the date on which Mastandrea ceases to be employed as an officer by the Trust, the Trust will deliver to Mastandrea all of the unrestricted shares and dividends not previously delivered to him under Section 14(c) and pay to Mastandrea, in a single lump sum, all of the deferred compensation and interest not previously paid to him under Section 14(d), whether or not the Trust is entitled to a deduction with respect thereto.

(g) MISCELLANEOUS. In addition to all other payments provided for in this Section 14 the Trust shall also pay to Mastandrea an amount, if any, equal to the additional taxes payable by Mastandrea on account of any deferral, due to higher marginal income tax rates payable by Mastandrea when the deferred compensation becomes payable. Mastandrea’s rights

with respect to the delivery of unrestricted shares and dividends, and the payment of deferred compensation and interest, under this Section 14 may not be assigned by him unless approved by the Board of Trustees. If Mastandrea dies before all unrestricted shares and dividends, and all deferred compensation and interest, under this Section 14 has been paid to him, any such unrestricted shares, dividends, deferred compensation, and interest shall be delivered and paid, at the same time it would have been paid if Mastandrea had not died but had merely ceased to be an employee of the Trust on the date of his death (or, if earlier, on the last date he actually was an employee of the Trust), to his estate or, if Mastandrea so directs the Trust in writing, to his wife or to a trust created by Mastandrea. The obligations of the Trust to deliver unrestricted shares and dividends, and to pay deferred compensation and interest, under this Section 14 constitute unsecured promises of the Trust, and neither Mastandrea nor any person claiming through him shall have, as a result of this Section 14, any lien or claim on any assets of the Trust that is superior to the claims of the general creditors of the Trust.

15. PAYMENTS FOR TAXES. During the Contract Period, any payments that are made on behalf of Mastandrea by the Trust, other than for salary (including deferred compensation), cash bonuses, and restricted shares, that are required by the independent auditors of the Trust to be included in his income, for federal, state, and local income tax will be paid to him on a “grossed-up” basis equal to his federal, state, and local tax liabilities resulting therefrom.

16. MERGER OR TRANSFER OF ASSETS OF THE TRUST. The Trust will not consolidate with or merge into any other entity, or transfer all or substantially all of its assets or shares to another entity, unless such other entity assumes this Agreement in a signed writing and delivers a copy thereof to Mastandrea. Upon such assumption the successor entity shall become obligated to perform the obligations of the Trust under this Agreement, and the term “the Trust” as used in this Agreement shall be deemed to refer to such successor entity.

17. NOTICES. Notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person (to the Secretary of the Trust in the case of notices to the Trust and to Mastandrea in the case of notices to Mastandrea) or mailed by United States registered mail, return receipt requested, postage prepaid, as follows:

If to the Trust:

Stonehaven Realty Trust

5620 Smetana Drive

Suite 130

Minneapolis, MN 55343

If to Mastandrea:

Mr. James C. Mastandrea

9520 Metcalf Road

Waite Hill, Ohio 44094

or such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

18. VALIDITY. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement which shall remain in full force and effect.

19. MISCELLANEOUS. This Agreement may only be modified, waived, or discharged by the Board of Trustees and agreed to in a writing signed by Mastandrea and the Trust. This Agreement shall inure to the benefit of Mastandrea and his heirs and legal representatives. No waiver by either party hereto at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time. No agreement or representation, oral or otherwise, express or implied, with respect to the subject matter hereof has been made by either party which is not set forth expressly in this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. In the event legal action is instituted to enforce any provision of this Agreement, each party shall pay its own cost and expense thereof. Except as set forth in the Modification Agreement, dated the date hereof, between the Trust and Paragon Real Estate Development, L.L.C., an Ohio limited liability company, this Agreement constitutes the entire agreement between the parties with the subject matter hereof and all prior negotiations, discussions, and agreements on that subject matter are hereby superseded. This Agreement may be executed in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together, when executed and delivered, will constitute one and the same instrument.

20. NO PERSONAL LIABILITY. Notwithstanding anything herein to the contrary, this Agreement is made and executed on behalf of the Trust, a real estate investment trust organized under the laws of the State of Maryland, by its officers thereof on behalf of the trustees thereof, and none of the trustees or any additional or successor trustees hereinafter appointed, nor any beneficiary, officer, employee or agent of the Trust shall have any liability hereunder in his personal or individual capacity, but, instead, all parties shall look solely to the property and assets of the Trust for satisfaction of claims of any nature arising under or in connection with this Agreement.

IN WITNESS WHEREOF, this Agreement has been signed by the Trust and Mastandrea as of the date first above written.

STONEHAVEN REALTY TRUST

By:
Title:	Trustee

By:
	JAMES C. MASTANDREA

Exhibit 2.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made at Cleveland, Ohio, this day of , 2003, between STONEHAVEN REALTY TRUST, a Maryland business trust (the “Trust”), and JOHN J. DEE, 26151 Pebblebrook Lane, North Olmsted, Ohio 44070 (“Dee”).

WITNESSETH:

WHEREAS, at the time set forth herein, Dee will hold the offices of Trustee, and Senior Vice President and Chief Financial Officer of the Trust;

WHEREAS, Dee is expected to make major contributions toward the business of the Trust; and

WHEREAS, the Trust and Dee desire to enter into this Agreement pursuant to which the Trust will 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:

1. EMPLOYMENT, CONTRACT PERIOD. During the period specified in this Section 1, the Trust shall employ Dee, and Dee shall serve the Trust, on the terms and subject to the conditions set forth herein. The initial term of Dee’s employment hereunder shall commence as of the date specified in the first sentence of this Agreement (the “Effective Date”) and, subject to prior termination as provided in Section 8, shall continue through the second anniversary of the Effective Date. The term of Dee’s employment hereunder shall be automatically renewed on the second anniversary of the Effective Date and on each succeeding anniversary of the Effective Date thereafter for succeeding terms of one year each, unless either party shall have given, at least 90 days prior to the expiration of any term, written notice of his or its intention not to renew the term of Dee’s employment hereunder, except that no extension of the term of Dee’s employment hereunder shall extend beyond the date of Dee’s 70 ^th birthday, though he may continue as a Trustee beyond his 70 ^th birthday. The term of Dee’s employment hereunder is sometimes hereinafter referred to as the “Contract Period.”

2. POSITION, DUTIES, RESPONSIBILITIES.

(a) Except as set forth in Section 2(b), at all times during the Contract Period, Dee shall have the titles of Trustee, Senior Vice President and Chief Financial Officer of the Trust and shall have and perform the duties and responsibilities of those offices (the “Offices”), subject to the authority of the Board of Trustees of the Trust (the “Board of Trustees”). In addition, Dee may hold such other offices as may be designated from time to time by the Board of Trustees.

(b) Dee will not be appointed to Chief Financial Officer (“CFO”) until five (5) days after the filing of the December 31, 2002 Form 10-KSB with the Securities and Exchange

Commission (the “SEC”). Other than the occurrence of the foregoing event, no further action by the Trust is required for Dee to be appointed CFO. Until Dee becomes CFO hereunder, it is intended that he shall under no circumstances be considered an executive officer of the Trust or be considered to be performing similar functions as such terms are used in Form 10-KSB or Item 307 of Regulation S-B as promulgated by the SEC.

(c) At all times during the Contract Period, Dee shall devote substantially all of his business time, energy, and talent to the business of and to the furtherance of the purposes and objectives of the Trust, and neither directly nor indirectly render any business, commercial, or professional services to any other person, firm, or organization for compensation without the prior approval of the Board of Trustees. Nothing in this Agreement shall preclude Dee from devoting reasonable periods of time to charitable and community activities, service on boards of other companies (public or private) not in competition with the Trust, undertaken after consultation with the Board of Trustees; or the management of his personal investment assets provided:

(i) such activities do not interfere with the performance by Dee of his duties hereunder;

(ii) Dee does not make any single investment in excess of $500,000 in the outstanding securities of a publicly owned equity real estate investment trust or of any other entity engaged primarily in the ownership and/or management of real estate, other than the Trust. This limitation shall not apply to the continued holding by Dee of any investments that were held by him on January 1, 2003 and have been held by him continuously thereafter and any holding by Dee that is approved by the independent Trustees of the Board of Trustees; and

(iii) Dee does not advise, assist, or render any services, either directly or indirectly, to a publicly-owned equity real estate investment trust or in any other entity engaged primarily in the ownership and/or management of real estate that competes with the Trust (except that this limitation shall not apply to the continued holding by Dee of any investments that were held by him on January 1, 2003 and have been held by him continuously thereafter), other than the Trust.

(d) The duties to be performed by Dee under this Agreement shall be performed primarily in Cuyahoga County at the offices of the Trust, and he shall not be required to perform services elsewhere except for travel incident to his performance of services hereunder.

3. BASE SALARY AND PLAN COMPENSATION.

(a) The rate of Dee’s base salary hereunder as of the Effective Date shall be $60,000 per year. The rate of Dee’s base salary is considered to be below the market rate for executives with similar experience and shall be reviewed at least annually during the Contract Period and may be adjusted from time to time, based upon such standards as the Board of

Trustees may determine to be appropriate, except that no such adjustment shall result in a reduction of Dee’s base salary below the level for the preceding year during the Contract Period.

(b) Dee shall receive the awards and any other compensation that have been earned during the Contract Period and that he is entitled to receive under any of the Trust’s present or future share option, incentive compensation, or executive bonus plan in which he is entitled to participate (such awards and other compensation are hereinafter referred to as “Plan Compensation”).

4. BENEFITS. During the Contract Period, and to the extent available and adopted by the Board of Trustees, the Trust shall provide Dee (a) health and welfare benefits, including health insurance, travel accident insurance, life and accidental death insurance, and long term disability upon the same terms and conditions as to the other executives, (b) directors and officers liability insurance, (c) a parking space, (d) memberships in a business club in downtown Cleveland, if any, as may be deemed necessary by Dee, and (e) such other benefits as the Board of Trustees may from time to time authorize.

5. SPLIT DOLLAR LIFE INSURANCE. Before the end of the Contract Period, the Board of Trustees will consider whether it would be appropriate for the Trust to enter into a split-dollar agreement with respect to an insurance policy on the life of Dee with a death benefit for a specific amount payable to Dee’s designated beneficiary, provided, however, that such benefits or payments shall at all times be subject to the Sarbanes-Oxley Act of 2002, as may be amended from time to time, and to the rules issued by the SEC thereunder.

6. REIMBURSEMENT FOR EXPENSES. Subject to such limitations as may be reasonably imposed by the Board of Trustees from time to time, the Trust shall reimburse Dee for all reasonable, ordinary, and necessary expenses incurred by him in the performance of his duties hereunder, provided, however, that such benefits or payments shall at all times be subject to the Sarbanes-Oxley Act of 2002, as may be amended from time to time, and to the rules issued by the SEC thereunder; and provided, further, that Dee accounts to the Trust therefor in a manner sufficient to substantiate deductions with respect to those expenses by the Trust for federal income tax purposes.

7. EFFECT OF DISABILITY DURING CONTRACT PERIOD. If, during the Contract Period, Dee becomes disabled as determined by a physician acceptable to Dee and the Trust, by reason of physical or mental impairment, to such an extent that he is unable to substantially perform his duties under this Agreement (“Disabled”):

(a) The Trust may relieve Dee of his duties under this Agreement for as long as Dee is Disabled.

(b) So long as Dee remains Disabled, the Trust shall continue to pay Dee the base salary and bonus (cash and stock) at the rate in effect immediately before he became Disabled, net of any other disability benefits paid to him by the Trust or any insurance funded by the Trust, the Trust shall continue to provide those health and welfare benefits, including contribution to any pension plan, that were being provided to Dee immediately before he became Disabled, and Dee shall continue to earn the Plan Compensation (other than bonus) to which he would have been entitled under Section 3(b) had he continued to be actively employed, until the

earliest of (i) the first date on which he is no longer Disabled, (ii) the date of his death, (iii) the date on which Dee attains age 70, or (iv) the third anniversary of the date on which he became Disabled. If Dee becomes Disabled, thereafter recovers sufficiently to be able to substantially perform his duties, and later becomes Disabled again, the combined period in which Dee is entitled to receive disability benefits under this Section 7(b) shall not exceed three years.

8. TERMINATION.

(a) DEATH OR DISABILITY. Dee’s employment hereunder will terminate immediately upon Dee’s death and the Trust shall not be obligated to pay Dee any further compensation hereunder except through the date of death. The Trust may terminate Dee’s employment hereunder immediately upon giving notice of termination if Dee is Disabled for an aggregate of 90 days (whether business or non-business days and whether or not consecutive) during any period of twelve consecutive calendar months; in the event of any such termination, the disability benefits payable under Section 7(b) shall be in lieu of any payments upon termination under Section 9.

(b) FOR CAUSE. The Trust may terminate Dee’s employment under this Agreement for “Cause” if:

(i) Except by reason of being Disabled, Dee fails substantially to devote the time and effort required for him to perform his duties hereunder;

(ii) Except by reason of being Disabled, Dee fails to follow directions from the Board of Trustees that are appropriate in the context of his status as an executive officer of the Trust;

(iii) Dee is convicted of a felony involving moral turpitude;

(iv) Dee engages in acts in violation of the provisions of Section 2(c), the confidentiality provisions of Section 13 or otherwise breaches the terms of this Agreement in any material respect; or

(v) Dee willfully, wantonly, voluntarily, and without approval of the Board of Trustees takes any action that he knows to be materially adverse to the interest of the Trust and its shareholders, collectively.

Any termination of Dee’s employment for Cause shall be effective immediately upon the Trust giving Dee 30 days’ notice of termination of employment and the grounds therefore. However, if any failure on Dee’s part referred to in clause (i), (ii) or (iv) of this Section 8(b) is curable, the Trust may not terminate Dee’s employment unless the Board of Trustees first gives him written notice specifying the nature of the failure and the steps that he must take to cure the failure, and Dee fails to take those steps within 30 days after the notice is given.

(c) BY THE TRUST WITHOUT CAUSE. The Trust may terminate Dee’s employment hereunder without Cause at any time upon 30 days’ notice from the Board of Trustees to Dee.

(d) BY DEE FOR GOOD REASON. Dee may terminate his employment hereunder for “Good Reason” if one or more of the events listed in clauses (i) through (vi) of this Section 8(d) occurs, provided, however, that for termination under any of subsections (i) – (vi) below, Dee must provide the Trust with a written notice of termination, specifying with particularity the events constituting Good Reason and the Trust shall have a period of 30 days to cure such events:

(i) Dee’s base salary is reduced from the amount in effect for the preceding year;

(ii) The Trust fails to provide the Plan Compensation contemplated by Section 3(b) (after such Plan Compensation has been adopted by the Board of Trustees or a committee thereof);

(iii) The Trust fails in any material respect to provide benefits in accordance with Section 4 or to consider the appropriateness of the split-dollar insurance in accordance with Section 5, in either case after Dee has given the Trust written notice of the failure, and the Trust has failed to effect a cure within 30 days after the notice is given;

(iv) Dee is removed from any of his Offices or responsibilities or his duties with the Trust are otherwise reduced to such an extent that he no longer has authority commensurate with an executive officer of the Trust (except as such removal and termination is permitted under this Agreement);

(v) Dee’s principal place of employment for the Trust is relocated outside of the Cleveland metropolitan area and, as a result, he is required to relocate outside the Cleveland metropolitan area; or

(vi) After a Shift in Ownership (as defined in Section 11), the Board of Trustees fundamentally changes its strategic plan in a manner opposed by Dee. Dee may not terminate his employment under this clause (vi) unless he first gives the Board of Trustees written notice of specifying the change or changes that he opposes and the steps that the Board of Trustees must take to rectify the strategic plan, and the Board of Trustees fails to take those steps within 30 days after the notice is given.

(e) BY DEE WITHOUT GOOD REASON. Dee may terminate his employment hereunder without Good Reason at any time upon 30 days’ advance notice from Dee to the Board of Trustees and upon such termination the Trust shall be obligated to pay Dee only as set forth in Section 9 (a) of this Agreement.

9. PAYMENTS UPON TERMINATION. Following any termination of Dee’s employment with the Trust, the Trust shall pay and provide to Dee, after the date of the

termination (the “Termination Date”), the amounts and benefits provided in this Section 9.

(a) TERMINATION BY THE TRUST OR BY DEE FOR ANY REASON. Upon any termination of Dee’s employment for any reason, the Trust (i) shall pay to Dee all unpaid base salary and other benefits (e.g., accrued vacation) with respect to periods ending on or before the Termination Date and (ii) shall provide to Dee all Plan Compensation that has been earned and vested prior to the Termination Date, subject to the terms and provisions of the applicable plans.

(b) TERMINATION BY THE TRUST WITHOUT CAUSE, OR BY DEE FOR GOOD REASON. If Dee’s employment hereunder is terminated by the Trust without Cause or by Dee for Good Reason, in addition to (but not in duplication of) the salary and Plan Compensation under Section 9(a), Trust shall pay and provide to Dee the following amounts and benefits through the third anniversary of the Termination Date (the “Benefit Termination Date”) at the same times as those amounts and benefits would have been paid and provided if Dee had continued in the active employ of the Trust through the Benefit Termination Date:

(i) Base salary and bonus (cash and stock) at the rate in effect immediately before the Termination Date.

(ii) Those health and welfare benefits including contribution to any pension plan that were being provided to Dee immediately before the Termination Date through the Benefit Termination Date.

(iii) In addition to any benefits Dee is or may be entitled to under any retirement plan or program in which he participates, if after a Shift in Ownership an amount equal to three (3) times the total amount contributed by the Trust to Dee’s account under the pension plan and any excess benefit plan related thereto, with respect to the plan year immediately prior to the Termination Date provided such payment shall not be duplicative of any payment made or to be made under subsection (ii) above.

(iv) Continued vesting of share options held by Dee through the Benefit Termination Date and the ability to exercise vested options through the later to occur of the expiration date of the share options or the Benefit Termination Date, as if Dee had remained employed by the Trust.

(v) Continued earning of any restricted shares held by Dee. After the Termination Date, against delivery to the Trust of the certificate or certificates representing all of the restricted shares, the Trust will issue to Dee an unlegended certificate or certificates for the shares whose restrictions have lapsed. If the market price of the shares at the Benefit Termination Date exceeds the market price of the shares at the Termination Date, the Trust will promptly issue to Dee an unlegended certificate for the balance of the shares due to him.

(vii) If termination occurs six months before or six months after a Shift of Ownership, the Trust shall pay to Dee the base salary and bonus in Section 9(b)(i) immediately in a lump sum; continue health and welfare benefits in Section 9(b)(ii) through the Benefit Termination Date; pay any pension or retirement plan payments in clause (ii) and (iii) of Section 9(b) immediately in a lump sum; all unvested share options in Section 9(b)(iv) shall become vested; all restrictions on restricted shares in Section 9(b)(v) shall lapse and an unlegended certificate for the shares whose restriction has lapsed shall be issued to Dee; and immediate accrual, vesting, and payment of all items under Section 9(b)(vi).

(c) SHARE OPTIONS. If Dee’s employment hereunder is terminated by the Trust without Cause or by Dee for Good Reason, each of Dee and the Trust shall have the right to “cash out” outstanding vested options held by Dee by the payment of the aggregate spread between the exercise prices of the options and the last reported sales price of the shares on the Termination Date, but only to the extent permitted by loan and other covenants then applicable to the Trust. Subject to the Sarbanes-Oxley Act of 2002, as may be amended from time to time, and to the rules issued by the SEC thereunder, the Trust may, at its election, pay up to 60% of this amount by delivery of a promissory note, provided that the note is backed by an “Unconditional Letter of Credit”, by a Bank acceptable to Dee, with principal payable in equal quarterly installments over a period of four years and interest at a rate equal to prime as quoted by National City Bank, Cleveland, Ohio, plus 1%, compounded quarterly; the balance of the amount will be paid in cash.

(d) FULL SATISFACTION. Payment and provision of the salary and benefits to which Dee is entitled under this Section 9 shall constitute full satisfaction of all obligations of the Trust to Dee arising under this Agreement and/or in connection with the termination of his employment. The Plan Compensation and any other benefits or compensation provided to Dee under this Section 9 shall not be subject to mitigation under any circumstances.

10. EFFECT OF FAILURE TO EXTEND TERM. If either the Trust or Dee gives notice to the other of an intention not to extend the term of Dee’s employment hereunder for an additional year, as contemplated in Section 1, that notice shall be treated as a notice of intended termination of Dee’s employment as of the end of then term. Accordingly, the termination of his employment will be treated as a termination by the Trust or by Dee, as the case may be, with or without Cause, and for or not for Good Reason, as the case may be. This Section 10 is not intended to abrogate the specific notice requirements applicable to a termination for Cause under clause (i) or (ii) of Section 8(b) or to a termination for Good Reason under Section 8(d).

11. SHIFT IN OWNERSHIP.

(i) causes Dee not to be appointed as Chief Financial Officer, in accordance with the intent herein;

(ii) or, if Dee is appointed as Chief Financial Officer, causes Dee to be removed as Trustee and Chief Financial Officer, and such change is not supported by Dee.

12. EXCESS PARACHUTE PAYMENT REDUCTION.

(a) Anything in this Agreement to the contrary notwithstanding, if it is determined that any payment or distribution by the Trust to or for the benefit of Dee (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be nondeductible by the Trust for Federal income tax purposes because of Section 280G of the Internal Revenue Code and applicable regulations promulgated thereunder, then the aggregate present value of amounts payable or distributable to or for the benefit of Dee pursuant to this Agreement (such payments or distributions pursuant to this Agreement are hereinafter referred to as “Agreement Payments”) shall be reduced (but not below zero) to the Reduced Amount. The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of Agreement Payments without causing any Payment to be nondeductible by the Trust because of Section 280G of the Internal Revenue Code and applicable regulations promulgated thereunder. For purposes of this Section 12, present value shall be determined in accordance with Section 280G(d)(4) of the Internal Revenue Code and applicable regulations promulgated thereunder. All determinations required to be made under this Section 12 shall be made by the Accounting Firm (as defined in Section 12(b)) which shall provide detailed supporting calculations both to the Trust and Dee within 30 days after the Termination Date or such earlier time as is requested by the Trust. The Trust and Dee shall cooperate with each other and the Accounting Firm and will provide necessary information so that the Accounting Firm may make all such determinations. All such determinations by the Accounting Firm shall be final and binding upon the Trust and Dee. Dee shall determine which of the Agreement Payments (or, at the election of Dee, other payments) shall be eliminated or reduced consistent with the requirements of this Section 12, provided that, if Dee does not make such determination within 20 days of the receipt of the calculations made by the Accounting Firm, the Trust shall elect which of the Agreement Payments shall be eliminated or reduced consistent with the requirements of this Section 12, and shall notify Dee promptly of such election. All costs and expenses relating to the determinations to be made hereunder shall be

borne solely by the Trust.

(b) The term “Accounting Firm” means the independent auditors of the Trust for the fiscal year preceding the year in which the Shift in Ownership occurred and such firm’s successor or successors; provided, however, if such firm is unable or unwilling to serve and perform in the capacity contemplated by this Agreement, Dee shall select another national or regional accounting firm of recognized standing to serve and perform in that capacity under this Agreement, except that such other accounting firm shall not be the then independent auditors for the Trust.

13. CONFIDENTIALITY. Dee acknowledges that the business in which the Trust is engaged is competitive and that his employment with the Trust has required and will require that he have access to and knowledge of confidential and proprietary information pertaining to the Trust’s operations and its properties (“Confidential Information”). Dee shall not, during the term of his employment hereunder or at any time thereafter, except in connection with the performance of services hereunder or in furtherance of the business of the Trust, communicate, divulge, or disclose to any other person not a Trustee, officer, employee, or affiliate of, or not engaged to render services to or for, the Trust or use for his own benefit or purposes any Confidential Information that he has obtained from the Trust during the Contract Period, except that this provision shall not preclude Dee from communication or use of Confidential Information made known generally to the public by any party unrelated to Dee, or from making any disclosure required by applicable law, rules, regulations, or court or governmental or regulatory authority order or decree provided that, if practicable, Dee shall not disclose any Confidential Information without first giving the Trust notice of intention to make that disclosure and an opportunity to interpose an objection to the disclosure.

14. DEFERRAL OF PAYMENT OF COMPENSATION UNDER CERTAIN CIRCUMSTANCES.

(b) DEFERRAL. For purposes of this Section 14, “Excess Compensation” as determined by the Accounting Firm, as defined in Section 12(b) shall mean the amount of compensation (including base salary, bonus and the lapse of restrictions on restricted shares granted to Dee) otherwise paid or provided to Dee by the Trust under this Agreement at any particular time (the “Scheduled Time”) that, after giving effect to all elective deferrals of compensation, (i) would not be deductible by the Trust if paid at the Scheduled Time by reason of the disallowance rules of Section 162(m), and (ii) would be deductible by the Trust if deferred until and paid during a later year.

(c) RESTRICTED SHARES. Except as provided in Section 14(e) or Section 14(f), if and to the extent that the lapse of restrictions on restricted shares at the Scheduled Time would result in Excess Compensation, Dee will forfeit the restricted shares

immediately prior to the Scheduled Time. Thereafter, the Trust will deliver to Dee a number of unrestricted shares equal to the number of restricted shares forfeited, together with an amount equal to any and all dividends that would have been paid on those shares from the Scheduled Time through the date of delivery, during the year that is determined by the Accounting Firm to be the first year following the Scheduled Time during which the unrestricted shares and dividends can be delivered without disallowance of the deduction for payment of the compensation by reason of Section 162(m). If the Accounting Firm determines that in any such year a portion, but not all, of the unrestricted shares and dividends can be delivered without disallowance of the deduction, the Trust will deliver to Dee the portion that can be so delivered, and, except as provided in Section 14(e) or Section 14(f), the remainder of the unrestricted shares and dividends will be delivered at a later date.

(d) DEFERRED CASH COMPENSATION. Except as provided in Section 14(e) or Section 14(f), if and to the extent that the payment of cash compensation would result in Excess Compensation, after the forfeiture of any restricted shares under Section 14(c), payment of the cash compensation will be deferred. Thereafter, the Trust will pay to Dee the amount of the deferred compensation, together with accrued interest, during the year that is determined by the Accounting Firm to be the first year following the Scheduled Time during which the compensation can be paid without disallowance of the deduction for payment of the compensation by reason of Section 162(m). If the Accounting Firm determines that in any such year a portion, but not all, of the deferred compensation and interest can be paid without disallowance of the deduction, the Trust will pay to Dee the portion that can be so paid, and, except as provided in Section 14(e) or Section 14(f), the remainder of the deferred compensation and interest will be paid at a later date. For purposes hereof, interest will accrue from the date on which the compensation would have been paid but for this Section 14(d) through the date of payment at a rate equal to prime plus 1% quoted by National City Bank, Cleveland, Ohio, compounded quarterly.

(e) EARLY DELIVERY OF UNRESTRICTED SHARES OR PAYMENT OF DEFERRED COMPENSATION. If the Accounting Firm determines that the delivery to Dee of the unrestricted shares and dividends under Section 14(c), or the payment to Dee of the deferred compensation and interest under Section 14(d), will not result in a deduction to the Trust, even if paid in a later year, the Trust will, within three months of the date on which that determination is made, deliver to Dee those unrestricted shares and dividends, or pay to Dee that deferred compensation and interest, as the case may be.

(f) DELIVERY OR PAYMENT FOLLOWING TERMINATION OF EMPLOYMENT IN ALL EVENTS. Within three months of the date on which Dee ceases to be employed as an officer by the Trust, the Trust will deliver to Dee all of the unrestricted shares and dividends not previously delivered to him under Section 14(c) and pay to Dee, in a single lump sum, all of the deferred compensation and interest not previously paid to him under Section 14(d), whether or not the Trust is entitled to a deduction with respect thereto.

(g) MISCELLANEOUS. In addition to all other payments provided for in this Section 14 the Trust shall also pay to Dee an amount, if any, equal to the additional taxes payable by Dee on account of any deferral, due to higher marginal income tax rates payable by Dee when the deferred compensation becomes payable. Dee’s rights with respect to the delivery of unrestricted shares and dividends, and the payment of deferred compensation and interest,

under this Section 14 may not be assigned by him unless approved by the Board of Trustees. If Dee dies before all unrestricted shares and dividends, and all deferred compensation and interest, under this Section 14 has been paid to him, any such unrestricted shares, dividends, deferred compensation, and interest shall be delivered and paid, at the same time it would have been paid if Dee had not died but had merely ceased to be an employee of the Trust on the date of his death (or, if earlier, on the last date he actually was an employee of the Trust), to his estate or, if Dee so directs the Trust in writing, to his wife or to a trust created by Dee. The obligations of the Trust to deliver unrestricted shares and dividends, and to pay deferred compensation and interest, under this Section 14 constitute unsecured promises of the Trust, and neither Dee nor any person claiming through him shall have, as a result of this Section 14, any lien or claim on any assets of the Trust that is superior to the claims of the general creditors of the Trust.

15. PAYMENTS FOR TAXES. During the Contract Period, any payments that are made on behalf of Dee by the Trust, other than for salary (including deferred compensation), cash bonuses, and restricted shares, that are required by the independent auditors of the Trust to be included in his income, for federal, state, and local income tax will be paid to him on a “grossed-up” basis equal to his federal, state, and local tax liabilities resulting therefrom.

16. MERGER OR TRANSFER OF ASSETS OF THE TRUST. The Trust will not consolidate with or merge into any other entity, or transfer all or substantially all of its assets or shares to another entity, unless such other entity assumes this Agreement in a signed writing and delivers a copy thereof to Dee. Upon such assumption the successor entity shall become obligated to perform the obligations of the Trust under this Agreement, and the term “the Trust” as used in this Agreement shall be deemed to refer to such successor entity.

17. NOTICES. Notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person (to the Secretary of the Trust in the case of notices to the Trust and to Dee in the case of notices to Dee) or mailed by United States registered mail, return receipt requested, postage prepaid, as follows:

If to the Trust:

Stonehaven Realty Trust

5620 Smetana Drive

Suite 130

Minneapolis, MN 55343

If to Dee:

Mr. John J. Dee

26151 Pebblebrook Lane

North Olmsted, Ohio 44070

or such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

19. MISCELLANEOUS. This Agreement may only be modified, waived, or discharged by the Board of Trustees and agreed to in a writing signed by Dee and the Trust. This Agreement shall inure to the benefit of Dee and his heirs and legal representatives. No waiver by either party hereto at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time. No agreement or representation, oral or otherwise, express or implied, with respect to the subject matter hereof has been made by either party which is not set forth expressly in this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. In the event legal action is instituted to enforce any provision of this Agreement, each party shall pay its own cost and expense thereof. Except as set forth in the Modification Agreement, dated the date hereof, between the Trust and Paragon Real Estate Development, L.L.C., an Ohio limited liability company, this Agreement constitutes the entire agreement between the parties with the subject matter hereof and all prior negotiations, discussions, and agreements on that subject matter are hereby superseded. This Agreement may be executed in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together, when executed and delivered, will constitute one and the same instrument.

IN WITNESS WHEREOF, this Agreement has been signed by the Trust and Dee as of the date first above written.

STONEHAVEN REALTY TRUST


By:
Title:	Trustee


By:
	JOHN J. DEE

Exhibit 2.5

RESTRICTED SHARE AGREEMENT

The parties, STONEHAVEN REALTY TRUST, a Maryland real estate investment trust (the “Trust”), and James C. Mastandrea (“Mastandrea”) agree to enter into this restricted share agreement (“Agreement”), made at Cleveland, Ohio, this day of , 2003, between the Trust and Mastandrea.

WITNESSETH:

WHEREAS: The Trust is a publicly traded real estate company;

WHEREAS: The Trust desires to substantially grow the asset base, net operating income, funds from operations, net value, and share value of the Trust;

WHEREAS: The Trust seeks to acquire the leadership experience, talent, and relationship of Mastandrea by providing an initial stock allocation as an incentive ownership in the Trust;

WHEREAS: The Board of Trustees of the Trust (the “Board”) desires to appoint Mastandrea as its Chairman of the Board and President;

WHEREAS: Mastandrea will assume the title of Chief Executive Officer in 2003;

WHEREAS: Mastandrea desires to become an employee of the Trust and execute an employment contract with the Trust of even date (the “Employment Agreement”);

WHEREAS: It is the present intention of Mastandrea to assign to Paragon Real Estate Development, L.L.C., an Ohio limited liability company (“Paragon”), the Restricted Shares (as defined in Section 1) he is receiving under this Agreement;

WHEREAS: It is the present intention of Paragon to accept the foregoing assignment of the Restricted Shares and,

WHEREAS: The Trust and Mastandrea desire to enter into this Agreement;

NOW, THEREFORE, the Trust and Mastandrea have agreed to be bound by the terms and conditions of this Agreement:

1) GRANTING OF RESTRICTED SHARES . Upon the parties’ execution of the Employment Agreement, the Trust will, subject to shareholder approval, as soon as practicable issue to Mastandrea, or any affiliated designee of Mastandrea, a total of 348,039 restricted shares of the Trust’s Class A Cumulative Convertible Preferred Shares (“Restricted Shares”).

2) RESTRICTIONS ON THE SHARES . In accordance with the terms of the certificate of designation of the Restricted Shares, the holder of any Restricted Shares will at all times be entitled to vote the Restricted Shares and to receive any dividends declared on the Trust’s Class A Cumulative Convertible Preferred Shares (the “Preferred Shares”). In addition, the holder of any Restricted Shares may transfer the shares to any affiliate of Mastandrea subject to the forfeiture and other provisions of this Agreement. However, the holder of any Restricted Shares may not otherwise transfer, sell, assign or dispose of any of the Restricted Shares until they have vested as provided for in this Agreement; provided further, that notwithstanding whether or not some or all of the Restricted Shares have vested as provided for in this Agreement, the holder of any Restricted Shares may not transfer or sell any of the Restricted Shares until the second anniversary of the date of this Agreement. The Restricted Shares shall be converted into shares of the Trust’s common stock upon the closing of the exchange offer made to the holders of its Preferred Shares pursuant to the registration statement to be filed by the Trust (the “Exchange Offer”) pursuant to the same terms and conditions and based on the same exchange ratio as offered to the other holders of Preferred Shares; provided, however, that as long as any Preferred Shares are outstanding, the holders of Restricted Shares, in the aggregate, shall have the right to retain the exchange ratio in the Exchange Offer and will not be required to convert at the time of the Exchange Offer such number of Preferred Shares as equal 51% of the then outstanding Preferred Shares. The term “affiliate” shall have the meaning ascribed to it in Rule 12b-2 promulgated by the Securities and Exchange Commission.

3) VESTING OF RESTRICTED SHARES . The risk of forfeiture will lapse for the Restricted Shares and the Restricted Shares will vest upon the later of: (a) The gross assets of the Trust equaling or exceeding $50 million; or (b) 174,019 shares on the first anniversary of this Agreement; 87,010 on the second anniversary of this Agreement; and 87,010 on the third anniversary of this Agreement. The vesting schedule shall not be affected if Mastandrea dies or becomes “disabled” as such term is used in the Employment Agreement. However, notwithstanding the foregoing, the risk of forfeiture will lapse for all of the Restricted Shares and they will vest in full immediately: if a “Shift in Ownership” is deemed to have occurred under the Employment Agreement, or if the Employment Agreement otherwise provides for accelerated vesting. The holders of the Restricted Shares will automatically and without notice be forfeited and cease to have any right, title or interest to any of the Restricted Shares that remain subject to forfeiture immediately if Mastandrea terminates his employment with the Trust without “Good Reason”; or the Trust terminates Mastandrea’s employment with the Trust for Cause (other than the right to receive a dividend previously declared but not yet paid with a record date for payment of the dividend prior to the termination date).

4) TAXES . Under the general rule of Section 83 of the Internal Revenue Code (the “Code”), Mastandrea will not be treated as receiving the Restricted Shares until such time as he becomes substantially vested in the Restricted Shares. Mastandrea will become substantially vested in the Restricted Shares upon the expiration of any forfeiture period described in Section 3 above. At that time, he will be taxed on the value of the Restricted Shares as ordinary compensation income. As an exception to this rule, Section 83 of the Code permits Mastandrea to elect to be taxed on the value of the Restricted Shares as of the date of the grant of the Restricted Shares.

The §83(b) election must be filed by Mastandrea within 30 days of the grant of the Restricted Shares. The filing must be made with the Internal Revenue Service Center with which Mastandrea files his federal income tax returns and a copy of the election must be submitted with his income tax return for the taxable year in which he receives the Restricted Shares and to the Trust.

5) RIGHT TO APPOINT TRUSTEES . Subject to shareholder approval of this section or any required amendment in the terms of the Preferred Shares, at any time during which Paragon or any of its affiliates collectively own, beneficially or of record, (a) a majority of the Preferred Shares, or (b) forty percent (40%) or more of the sum of (i) the outstanding Restricted Shares issued or to be issued pursuant to the terms of this Agreement and the Restricted Share Agreement by and among the Trust and John J. Dee (“Dee”) of even date herewith and (ii) the Common Shares of the Trust, if any, issued to Paragon or any of its affiliates upon conversion of the Restricted Shares in accordance with Section 2 of this Agreement, the holders of such Restricted Shares, Preferred Shares or Common Shares shall have the right to appoint five (5) Trustees to the Board at all times through the tenth (10 ^th ) anniversary of this Agreement. Notwithstanding the foregoing, if Mastandrea is Chairman of the Board or Chief Executive Officer of the Trust on the tenth (10 ^th ) anniversary of this Agreement, then the right to appoint Trustees will continue until the time that Mastandrea is no longer Chairman of the Board or Chief Executive Officer of the Trust. The rights set forth in this paragraph are not transferable.

6) REPRESENTATIONS OF MASTANDREA . Mastandrea understands that the issuance of the Restricted Shares is intended to be exempt from registration under the Securities Act by virtue of §4(2) and represents and warrants that: (i) he is aware that the Restricted Shares are not registered under the Securities Act or the securities or “blue sky” laws of any state or jurisdiction; (ii) he understands that the Restricted Shares cannot be resold unless they are registered under the Securities Act or unless an exemption from registration is available and represents that he is acquiring the Restricted Shares for investment and not for immediate resale; and (iii) he acknowledges that the Restricted Shares will be treated as taxable income to him under the Code.

7) MISCELLANEOUS . Except as set forth in the Modification Agreement, this Agreement may only be modified, waived, or discharged if approved by the Board and agreed to in writing and signed by Mastandrea and the Trust. This Agreement shall inure to the benefit of Mastandrea and his heirs and legal representatives. No waiver by any party hereto at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time. No agreement or representation, oral or otherwise, expressed or implied, with respect to the subject matter hereof, has been made by any of the parties which is not set forth expressly in this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. In the event legal action is instituted to enforce any provision of this Agreement, each party shall pay its own cost and expense thereof. This Agreement constitutes the entire agreement between

the parties with the subject matter hereof and all prior negotiations, discussions, and agreements on that subject matter are hereby superseded. This Agreement may be executed in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together, when executed and delivered, will constitute one and the same instrument.

8) NO PERSONAL LIABILITY . Notwithstanding anything herein to the contrary, this Agreement is made and executed on behalf of the Trust, a real estate investment trust organized under the laws of the State of Maryland, by its officers thereof on behalf of the trustees thereof, and none of the trustees or any additional or successor trustees hereinafter appointed, nor any beneficiary, officer, employee or agent of the Trust will have any liability hereunder in his personal or individual capacity, but, instead, all parties will look solely to the property and assets of the Trust for satisfaction of claims of any nature arising under or in connection with this Agreement.

IN WITNESS WHEREOF, this Agreement has been signed by the Trust and Mastandrea as of the date first above written.

STONEHAVEN REALTY TRUST


By:
Name:		JAMES C. MASTANDREA
Title:	Trustee

Exhibit 2.6

RESTRICTED SHARE AGREEMENT

The parties, STONEHAVEN REALTY TRUST, a Maryland real estate investment trust (the “Trust”), and John J. Dee (“Dee”) agree to enter into this restricted share agreement (“Agreement”), made at Cleveland, Ohio, this day of , 2003, between the Trust and Dee.

WITNESSETH:

WHEREAS: The Trust is a publicly traded real estate company;

WHEREAS: The Trust desires to substantially grow the asset base, net operating income, funds from operations, net value, and share value of the Trust;

WHEREAS: The Trust seeks to acquire the leadership experience, talent, and relationship of Dee by providing an initial stock allocation as an incentive ownership in the Trust;

WHEREAS: The Board of Trustees of the Trust (the “Board”) desires to appoint Dee as its Senior Vice President and Trustee;

WHEREAS: Dee will assume the title of Chief Financial Officer in 2003;

WHEREAS: Dee desires to become an employee of the Trust and execute an employment contract with the Trust of even date (the “Employment Agreement”);

WHEREAS: It is the present intention of Dee to assign to Paragon Real Estate Development, L.L.C., an Ohio limited liability company (“Paragon”), the Restricted Shares (as defined in Section 1) he is receiving under this Agreement;

WHEREAS: It is the present intention of Paragon to accept the foregoing assignment of the Restricted Shares and,

WHEREAS: The Trust and Dee desire to enter into this Agreement;

NOW, THEREFORE, the Trust and Dee have agreed to be bound by the terms and conditions of this Agreement:

1) GRANTING OF RESTRICTED SHARES . Upon the parties’ execution of the Employment Agreement, the Trust will, subject to shareholder approval, as soon as practicable issue to Dee, or any affiliated designee of Dee, a total of 348,039 restricted shares of the Trust’s Class A Cumulative Convertible Preferred Shares (“Restricted Shares”).

2) RESTRICTIONS ON THE SHARES . In accordance with the terms of the certificate of designation of the Restricted Shares, the holder of any Restricted Shares will at all times be entitled to vote the Restricted Shares and to receive any dividends declared on the Trust’s Class A Cumulative Convertible Preferred Shares (the “Preferred Shares”). In addition, the holder of any Restricted Shares may transfer the shares to any affiliate of Dee subject to the forfeiture and other provisions of this Agreement. However, the holder of any Restricted Shares may not otherwise transfer, sell, assign or dispose of any of the Restricted Shares until they have vested as provided for in this Agreement; provided further, that notwithstanding whether or not some or all of the Restricted Shares have vested as provided for in this Agreement, the holder of any Restricted Shares may not transfer or sell any of the Restricted Shares until the second anniversary of the date of this Agreement. The Restricted Shares shall be converted into shares of the Trust’s common stock upon the closing of the exchange offer made to the holders of its Preferred Shares pursuant to the registration statement to be filed by the Trust (the “Exchange Offer”) pursuant to the same terms and conditions and based on the same exchange ratio as offered to the other holders of Preferred Shares; provided, however, that as long as any Preferred Shares are outstanding, the holders of Restricted Shares, in the aggregate, shall have the right to retain the exchange ratio in the Exchange Offer and will not be required to convert at the time of the Exchange Offer such number of Preferred Shares as equal 51% of the then outstanding Preferred Shares. The term “affiliate” shall have the meaning ascribed to it in Rule 12b-2 promulgated by the Securities and Exchange Commission.

3) VESTING OF RESTRICTED SHARES . The risk of forfeiture will lapse for the Restricted Shares and the Restricted Shares will vest upon the later of: (a) The gross assets of the Trust equaling or exceeding $50 million; or (b) 174,019 shares on the first anniversary of this Agreement; 87,010 on the second anniversary of this Agreement; and 87,010 on the third anniversary of this Agreement. The vesting schedule shall not be affected if Dee dies or becomes “disabled” as such term is used in the Employment Agreement. However, notwithstanding the foregoing, the risk of forfeiture will lapse for all of the Restricted Shares and they will vest in full immediately: if a “Shift in Ownership” is deemed to have occurred under the Employment Agreement, or if the Employment Agreement otherwise provides for accelerated vesting. The holders of the Restricted Shares will automatically and without notice be forfeited and cease to have any right, title or interest to any of the Restricted Shares that remain subject to forfeiture immediately if Dee terminates his employment with the Trust without “Good Reason”; or the Trust terminates Dee’s employment with the Trust for Cause (other than the right to receive a dividend previously declared but not yet paid with a record date for payment of the dividend prior to the termination date).

4) TAXES . Under the general rule of Section 83 of the Internal Revenue Code (the “Code”), Dee will not be treated as receiving the Restricted Shares until such time as he becomes substantially vested in the Restricted Shares. Dee will become substantially vested in the Restricted Shares upon the expiration of any forfeiture period described in Section 3 above. At that time, he will be taxed on the value of the Restricted Shares as ordinary compensation income. As an exception to this rule, Section 83 of the Code permits Dee to elect to be taxed on the value of the Restricted Shares as of the date of the grant of the Restricted Shares. The §83(b)

election must be filed by Dee within 30 days of the grant of the Restricted Shares. The filing must be made with the Internal Revenue Service Center with which Dee files his federal income tax returns and a copy of the election must be submitted with his income tax return for the taxable year in which he receives the Restricted Shares and to the Trust.

5) RIGHT TO APPOINT TRUSTEES . Subject to shareholder approval of this section or any required amendment in the terms of the Preferred Shares, at any time during which Paragon or any of its affiliates collectively own, beneficially or of record, (a) a majority of the Preferred Shares, or (b) forty percent (40%) or more of the sum of (i) the outstanding Restricted Shares issued or to be issued pursuant to the terms of this Agreement and the Restricted Share Agreement by and among the Trust and James C. Mastandrea (“Mastandrea”) of even date herewith and (ii) the Common Shares of the Trust, if any, issued to Paragon or any of its affiliates upon conversion of the Restricted Shares in accordance with Section 2 of this Agreement, the holders of such Restricted Shares, Preferred Shares or Common Shares shall have the right to appoint five (5) Trustees to the Board at all times through the tenth (10 ^th ) anniversary of this Agreement. Notwithstanding the foregoing, if Mastandrea is Chairman of the Board or Chief Executive Officer of the Trust on the tenth (10 ^th ) anniversary of this Agreement, then the right to appoint Trustees will continue until the time that Mastandrea is no longer Chairman of the Board or Chief Executive Officer of the Trust. The rights set forth in this paragraph are not transferable.

6) REPRESENTATIONS OF DEE . Dee understands that the issuance of the Restricted Shares is intended to be exempt from registration under the Securities Act by virtue of §4(2) and represents and warrants that: (i) he is aware that the Restricted Shares are not registered under the Securities Act or the securities or “blue sky” laws of any state or jurisdiction; (ii) he understands that the Restricted Shares cannot be resold unless they are registered under the Securities Act or unless an exemption from registration is available and represents that he is acquiring the Restricted Shares for investment and not for immediate resale; and (iii) he acknowledges that the Restricted Shares will be treated as taxable income to him under the Code.

7) MISCELLANEOUS . Except as set forth in the Modification Agreement, this Agreement may only be modified, waived, or discharged if approved by the Board and agreed to in writing and signed by Dee and the Trust. This Agreement shall inure to the benefit of Dee and his heirs and legal representatives. No waiver by any party hereto at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time. No agreement or representation, oral or otherwise, expressed or implied, with respect to the subject matter hereof, has been made by any of the parties which is not set forth expressly in this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. In the event legal action is instituted to enforce any provision of this Agreement, each party shall pay its own cost and expense thereof. This Agreement constitutes the entire agreement between the parties with the subject matter hereof and all prior negotiations, discussions, and agreements on that subject

matter are hereby superseded. This Agreement may be executed in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together, when executed and delivered, will constitute one and the same instrument.

8) NO PERSONAL LIABILITY . Notwithstanding anything herein to the contrary, this Agreement is made and executed on behalf of the Trust, a real estate investment trust organized under the laws of the State of Maryland, by its officers thereof on behalf of the trustees thereof, and none of the trustees or any additional or successor trustees hereinafter appointed, nor any beneficiary, officer, employee or agent of the Trust will have any liability hereunder in his personal or individual capacity, but, instead, all parties will look solely to the property and assets of the Trust for satisfaction of claims of any nature arising under or in connection with this Agreement.

IN WITNESS WHEREOF, this Agreement has been signed by the Trust and Dee as of the date first above written.

STONEHAVEN REALTY TRUST

By:
Name:		JOHN J. DEE
Title:	Trustee

Exhibit 2.7

ADDITIONAL CONTRIBUTION AGREEMENT
BETWEEN
STONEHAVEN REALTY TRUST
AND
PARAGON REAL ESTATE DEVELOPMENT, LLC

The parties, STONEHAVEN REALTY TRUST, a Maryland business trust (the “Trust”), James C. Mastandrea (“Mastandrea”), John J. Dee (“Dee”), and PARAGON REAL ESTATE DEVELOPMENT, LLC (“Paragon”) or its nominee, agree to enter into this additional contribution agreement (“Agreement”), made at Cleveland, Ohio, this day of , 2003, between and Stonehaven and Paragon.

WITNESSETH:

WHEREAS: The Trust is a public traded real estate company;

WHEREAS: The Trust desires to substantially grow the asset base, net operating income, funds from operation, net value, and the share value of the Trust;

WHEREAS: The Trust seeks to acquire the leadership experience, talent, and relationships of Mastandrea and Dee;

WHEREAS: The Board of Trustees of the Trust (the “Board”) desires to appoint Mastandrea as its Chairman and President, and Dee as its Senior Vice President and Trustee;

WHEREAS: Mastandrea will assume the title of Chief Executive Officer and Dee will assume the title of Chief Financial Officer in 2003;

WHEREAS: Mastandrea and Dee desire to become employees of the Trust and execute two-year employment contracts with Stonehaven (the “Employment Agreements”);

WHEREAS: It is the present intention of Mastandrea and Dee to assign to Paragon Real Estate Development, L.L.C., an Ohio limited liability company (“Paragon”), the Common Shares (as defined in Section 1) they are receiving under this Agreement;

WHEREAS: It is the present intention of Paragon to accept the foregoing assignment of the Common Shares; and,

WHEREAS: the Trust, Mastandrea, Dee, and Paragon desire to enter into this Agreement;

NOW, THEREFOR E , the Trust, Paragon, Mastandrea, and Dee have agreed to be bound by the following terms and conditions of this Agreement:

1) ALLOCATION AND FORMULA FOR EARNING COMMON SHARES. Following the shareholder approval contemplated by Section 9 of the Contribution Agreement, dated as of an even date herewith, by and among the Trust and the other parties named therein, the Board is hereby authorized to issue to Paragon the Trust’s common shares (“Common Shares”) with an aggregate value of up to $26,000,000 (“Sponsor’s Equity”) for procuring for the Trust future acquisition, development, and re-development deals approved by the Board (each a “Real Estate Transaction”). These Common Shares will be issued as an incentive to Mastandrea and Dee to significantly grow the asset base and Net Operating Income (“NOI”) of the Trust. Sponsor’s Equity for a particular Real Estate Transaction shall be calculated by dividing (i) the estimated NOI to be generated from the Real Estate Transaction for the first year following consummation thereof by (ii) the capitalization rate utilized in such Real Estate Transaction, less the applicable “Basis Point Factor” (as defined below).

The applicable Basis Point Factors are as follows:

a) The Basis Point Factor for the acquisition of an existing operating property shall mean 75 basis points;

b) The Basis Point Factor for the acquisition of a redevelopment property shall mean 87.5 basis points;

c) The Basis Point Factor for the acquisition of a development property shall mean 100 basis points.

For example purposes only: If a particular Real Estate Transaction involving the acquisition of an existing operating property had a capitalization rate of 10.0%, an acquisition price of $10,000,000 and an estimated NOI of $1,000,000 for the year following the consummation of the Real Estate Transaction, then the Sponsor’s Equity in connection with such Real Estate Transaction would be $810,811, calculated by dividing the estimated Year 1 NOI ($1,000,000) by 9.25% (the capitalization rate (10.0%) minus the Basis Point Factor (.75%)), and subtracting $10,000,000 from the quotient.

2) PAYMENT OF SHARES. Upon the closing of a Real Estate Transaction for the Trust, the Trust will issue a share certificate to Paragon for the number of Common Shares earned by Mastandrea and Dee. For each Real Estate Transaction, Mastandrea will be allocated 50% of the Common Shares and Dee will be allocated 50% of the Common Shares. Paragon will hold the Common Shares issued for the benefit of Mastandrea and Dee.

3) RESTRICTIONS ON SHARES. Common Shares will be issued on the basis of a five-year proforma approved by the Board, and restricted until the actual NOI equals the proforma NOI. Removal of the restrictions shall also be subject to a minimum of 5% increase in both NOI and Funds From Operations for the Trust. The number of Common Shares shall be calculated by dividing the amount payable to Mastandrea and Dee pursuant to Section 1 hereof for that particular Real Estate Transaction by the average of the closing prices for the Common Shares for 30 calendar days ending the day preceding the closing, or, if the Common Shares are not then traded, the fair market value of a Common Share as determined in good faith by the Board. However, notwithstanding the foregoing, removal of the restrictions for all of the Common Shares will occur immediately: if a “Shift in Ownership” is deemed to have occurred under the Employment Agreements, or if the Employment Agreements otherwise provide for accelerated vesting. Issuances of Common Shares to Mastandrea and Dee hereunder shall also be subject to (i) the continued employment of Mastandrea and Dee, as applicable, by the Trust and (ii) shareholder approval, if required.

4) MISCELLANEOUS . This Agreement may only be modified, waived, amended, extended, or discharged if approved by the Board and agreed to in writing and signed by Mastandrea, Dee, Paragon, and the Trust. This Agreement shall inure to the benefit of the Trust, Mastandrea, Dee, and Paragon and their heirs and legal representatives and may not be transferred or assigned to an unrelated party. No waiver by any party hereto at any time of any breach by any other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time. No agreement or representation, oral or otherwise, express or implied, with respect to the subject matter hereof, has been made by any of the parties which is not set forth expressly in this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. In the event legal action is instituted to enforce any provision of this Agreement, each party shall pay its own cost and expense thereof. This Agreement constitutes the entire agreement between the parties with the subject matter hereof and all prior negotiations, discussions, and agreements on that subject matter are hereby superseded. This Agreement may be executed in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together, when executed and delivered, will constitute one and the same instrument.

5) NO PERSONAL LIABILITY . Notwithstanding anything herein to the contrary, this Agreement is made and executed on behalf of the Trust, a real estate investment trust organized under the laws of the State of Maryland, by its officers thereof on behalf of the trustees thereof, and none of the trustees or any additional or successor trustees hereinafter appointed, nor any beneficiary, officer, employee

or agent of the Trust will have any liability hereunder in his personal or individual capacity, but, instead, all parties will look solely to the property and assets of the Trust for satisfaction of claims of any nature arising under or in connection with this Agreement.

IN WITNESS WHEREOF, this Agreement has been signed by the Trust, and by both Mastandrea and Dee, individually and as representatives of Paragon, as of the date first above written.

STONEHAVEN REALTY TRUST


By:
Title:		Trustee



	JAMES C. MASTANDREA
	INDIVIDUALLY AND for PARAGON REAL ESTATE DEVELOPMENT TRUST, LLC



	JOHN J. DEE
	INDIVIDUALLY AND for PARAGON REAL ESTATE DEVELOPMENT TRUST, LLC

Exhibit 2.8

MODIFICATION AGREEMENT

The parties, STONEHAVEN REALTY TRUST, a Maryland real estate investment trust (the “Trust”), and PARAGON REAL ESTATE DEVELOPMENT, L.L.C., an Ohio limited liability company (“Paragon”) or its nominee, James C. Mastandrea (“Mastandrea”), and John J. Dee (“Dee”) agree to enter into this modification agreement (“Agreement”), made at Cleveland, Ohio, this day of , 2003, between the Trust and Paragon.

WITNESSETH:

WHEREAS: The Trust is a publicly traded real estate company;

WHEREAS: The Trust seeks to acquire the leadership experience, talent, and relationships of Mastandrea and Dee by providing an initial stock allocation as an incentive ownership in the Trust;

WHEREAS: The Board of Trustees of the Trust (the “Board”) desires to appoint Mastandrea as its Chairman of the Board and President, and Dee as its Senior Vice President, and Trustee;

WHEREAS: Mastandrea and Dee will assume the titles of Chief Executive Officer and Chief Financial Officer, respectively, in 2003;

WHEREAS: Mastandrea and Dee desire to become employees of the Trust and each will simultaneously herewith execute two-year employment contracts with the Trust (the “Employment Agreements”);

WHEREAS: It is the present intention of Mastandrea and Dee to assign to Paragon the restricted shares each of them is receiving under the Restricted Share Agreements, executed simultaneously herewith, between the Trust and each of them (the “Restricted Share Agreements”);

WHEREAS , It is the present intention of Paragon to accept the foregoing assignment of restricted shares;

WHEREAS: Simultaneously herewith, the Trust, Paragon Properties, L.P, a Delaware limited partnership (the “Partnership”), and Hampton Courts Associates, L.P., an Illinois limited partnership (“Hampton”) are executing a Contribution Agreement (the “Contribution Agreement”);

WHEREAS: T he Contribution Agreement and the issuance of shares pursuant to the Restricted Share Agreements will require approval of the shareholders of the Trust (“Shareholder Approval”); and

WHEREAS: The Trust, Paragon, Mastandrea, and Dee desire to enter into this Agreement;

NOW, THEREFOR E , the Trust, Paragon, Mastandrea, and Dee have agreed to be bound by the terms and conditions of this agreement.

1) SHAREHOLDER APPROVAL.

(a) If prior to Shareholder Approval being received, the Trust terminates (i) the employment of Mastandrea or Dee (other than in each case for “Cause,” as defined in the applicable Employment Agreement) or (ii) the Contribution Agreement (other than as permitted pursuant to Section 10 thereof), then the Trust will within five business days of the termination date reimburse Paragon for its reasonable out-of-pocket expenses, and at Paragon’s option, either issue 104,000 Class A Convertible Preferred Shares of the Trust to Paragon (such issuance subject to shareholder approval if required), or pay a termination fee of Twenty-Five Thousand Dollars ($25,000.00). The value of the Class A Convertible Preferred Shares issued or any amount paid in cash pursuant to this Section 1(a) will be deducted from any amounts payable pursuant to Section 6.4(b) of the Contribution Agreement.

(b) If Shareholder Approval is not received by December 31, 2003, (i) each of Mastandrea’s and Dee’s employment will continue pursuant to the terms of the respective Employment Agreements except as set forth in clause (iii) below, (ii) Paragon will receive, subject to shareholder approval, if required, 104,000 Class A Cumulative Convertible Preferred Shares of the Trust and Paragon and the Trust will enter into a new restricted share agreement governing such shares and containing terms substantially similar to those in the respective Restricted Share Agreements, subject to shareholder approval, if required, and (iii) Mastandrea and Dee may each devote time to other businesses, including other entities engaged primarily in the ownership and/or management of real estate, without approval of the Board.

(c) If Shareholder Approval is not received by December 31, 2003, Mastandrea and Dee will retain all of their rights as set forth in the Restricted Share Agreement subject to shareholder approval to be obtained at a later date, except that any rights to receive shares under the Restricted Share Agreement will be reduced by the number of shares issued under this Agreement.

(d) If Mastandrea or Dee terminates employment with the Trust (other than in each case for “Good Reason,” as defined in the applicable Employment Agreement) or (ii) if Hampton terminates the Contribution Agreement (other than as permitted pursuant to Section 10 thereof), then Hampton will within five business days of the termination date reimburse the Trust for its reasonable out-of-pocket expenses and pay a termination fee of Twenty-Five Thousand Dollars ($25,000.00) to the Trust.

2) MISCELLANEOUS. This Agreement may only be modified, waived, or discharged if approved by the Board and agreed to in writing and signed by Mastandrea, Dee, Paragon, and the Trust. This Agreement shall inure to the benefit of the Trust, Mastandrea, Dee, and Paragon and may not be transferred or assigned. No waiver by any party hereto at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time. No agreement or representation, oral or otherwise, expressed or implied, with respect to the subject matter hereof, has been made by any of the parties which is not set forth expressly in this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. In the event legal action is instituted to enforce any provision of this Agreement, each party shall pay its own cost and expense thereof. This Agreement constitutes the entire agreement between the parties with the subject matter hereof and all prior negotiations, discussions, and agreements on that subject matter are hereby superseded. This Agreement may be executed in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together, when executed and delivered, will constitute one and the same instrument.

3) NO PERSONAL LIABILITY. Notwithstanding anything herein to the contrary, this Agreement is made and executed on behalf of the Trust, a real estate investment trust organized under the laws of the State of Maryland, by its officers thereof on behalf of the trustees thereof, and none of the trustees or any additional or successor trustees hereinafter appointed, nor any beneficiary, officer, employee or agent of the Trust will have any liability hereunder in his personal or individual capacity, but, instead, all parties will look solely to the property and assets of the Trust for satisfaction of claims of any nature arising under or in connection with this Agreement.

IN WITNESS WHEREOF, this Agreement has been signed by the Trust, Mastandrea, and Dee, individually and as representatives of Paragon, as of the date first above written.

STONEHAVEN REALTY TRUST


By:
Name:
Title: Trustee



JAMES C. MASTANDREA
INDIVIDUALLY AND for PARAGON REAL ESTATE DEVELOPMENT, L.L.C.



JOHN J. DEE
INDIVIDUALLY AND for PARAGON REAL ESTATE DEVELOPMENT, L.L.C.

Exhibit 2.9

AMENDMENT NO. 1 TO THE

AGREEMENT OF LIMITED PARTNERSHIP OF

WELLINGTON PROPERTIES INVESTMENTS, L.P.

by and among

STONEHAVEN REALTY TRUST
(f.k.a. Wellington Properties Trust)

and

THE LIMITED PARTNERS NAMED THEREIN

Dated as of , 2003

AMENDMENT NO. 1
to
AGREEMENT OF LIMITED PARTNERSHIP

This AMENDMENT NO. 1 TO AGREEMENT OF LIMITED PARTNERSHIP (this “Amendment”) is made and entered into as of the day of , 2003, and hereby amends the Agreement of Limited Partnership of Wellington Properties Investments, L.P., dated August 31, 1998, by and among Stonehaven Realty Trust (f.k.a. Wellington Properties Trust), a Maryland real estate investment trust, and the Persons identified on Exhibit A thereto (the “Partnership Agreement”).

RECITALS

WHEREAS, the parties to this Amendment are all of the parties to the Partnership Agreement and the only Persons necessary to effect this Amendment;

WHEREAS, the parties to this Amendment desire to amend certain provisions of the Partnership Agreement as set forth herein; and

WHEREAS, capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Partnership Agreement.

AGREEMENT

NOW THEREFORE, in consideration of the foregoing recitals, the mutual covenants set forth herein, and for other good and valuable consideration, the parties hereto agree as follows:

1. Article I of the Partnership Agreement is hereby amended to add the following defined terms and definitions:

“ Closing Date ” has the meaning set forth in Section 11.2.C.(i).

“Excess Cash” has the meaning set forth in Section 7.11.D.

“ Fair Market Value ” has the meaning set forth in Section 11.2.C.(iv).

“ Management Agreement ” means that certain Management Agreement, entered into as of February 29, 2000, by and between Wellington Properties Investments, L.P., Stonehaven Realty Trust and Hoyt Properties, Inc.

“ Option ” has the meaning set forth in Section 11.2.C.(i).

“ Optionees ” means the individuals identified in Section 11.2.C.(i).

“ Properties ” means the parcels and tracts of real property identified on Exhibit H .

“ Purchase Price ” has the meaning set forth in Section 11.2.C.(i).

“ Put Closing Date ” has the meaning set forth in Section 11.2 (ii).

“ Termination Date ” has the meaning set forth in Section 11.2.C.(i).

2. Section 7.11 of the Partnership Agreement is hereby amended to add the following subsections C and D:

“C. Covenants of the General Partner ” Until (a) the Termination Date, (b) the Closing Date or (c) the Put Closing Date occurs, the General Partner shall carry on the business of the Partnership in the usual, regular and ordinary course, in substantially the same manner as previously conducted and consistent with preserving and advancing the assets, revenues and results of operation of the Partnership, and use its reasonable efforts to preserve intact the Partnership’s present business organization and relationships with others having business dealings with the Partnership. Except as contemplated by Section 11.2, until (a) the Termination Date, (b) the Closing Date or (c) the Put Closing Date occurs, the General Partner shall refrain from engaging in the following without the express prior written consent of the Optionees, which consent shall not be unreasonably withheld:

(i) dispose of, mortgage, pledge, encumber, hypothecate or exchange any of the Properties;

(ii) grant any conversion, option, privilege or subscription right or other right in connection with the Properties;

(iii) do anything not in the ordinary course of business in connection with the Properties;

(iv) amend or breach the Management Agreement;

(v) sell, transfer or assign any of its Units or issue any new Units of the Partnership;

(vi) fail to timely pay any uncontested indebtedness, liability, taxes or similar payments relating to the Properties;

(vii) amend, breach or terminate this Agreement; or

(viii) otherwise take any action that is reasonably likely to diminish the value of the Properties.

(ix) transfer of any cash from the Properties (or their accounts maintained by Hoyt Properties, Inc.) to General Partner or others.

“D. Operation of the Properties ” Notwithstanding anything to the contrary in the Partnership Agreement or the Management Agreement, until (a) the Termination Date, (b) the

Closing Date or (c) the Put Closing Date, all cash generated from the operations of the Properties shall be used first to satisfy the debts, liabilities and obligations arising from or in connection with the operation and maintenance of the Properties (the “Property Expenditures”), and then for the operating business of Stonehaven Realty Trust.

3. Section 7.12 of the Partnership Agreement is hereby amended and restated to read in its entirety as follows:

“ Section 7.12 Loans by Third Parties .

Notwithstanding anything in this Agreement to the contrary, the Partnership may incur Debt, or enter into credit or lending arrangements, guarantees, financing or refinancing arrangements, for the purpose of acquiring the Properties, with any Person that is not a General Partner (subject to Section 7.5.C) upon such terms as the General Partner determines appropriate; provided that, the Partnership shall not incur any Debt that is recourse to the General Partner, except to the extent otherwise agreed to by such General Partner in its sole discretion, and provided, further, that the General Partner shall in all cases obtain the prior written approval of the Optionees to the incurrence of such Debt, which approval will not be unreasonably withheld. The partnership shall exercise its Option to Purchase the General Partner’s Interest at the same time as the General Partner approves of the Optionees incurring such Debt.”

4. Section 11.2 of the Partnership Agreement is hereby amended and restated to read in its entirety as follows:

Section 11.2 Transfers of Units of the General Partner .

“A. Limitation on General Partnership Transfers . Except for transfers of Units to the Partnership as provided in Section 7.5 or Section 8.6, the General Partner may not transfer any Units owned thereby, except in connection with a transaction described in Section 11.2.B or Section 11.2.C or as otherwise expressly permitted under this Agreement, nor shall the General Partner withdraw as a General Partner except in connection with a transaction described in Section 11.2.B or 11.2.C.

“B. Termination Transactions . The General Partner shall not engage in any merger, consolidation or other combination with or into another person, sale of all or substantially all of its assets or any reclassification, recapitalization or change of outstanding Shares (other than a change in par value, or from par value to no par value, or as a result of a subdivision or combination as described in the definition of “Conversion Factor”) (“Termination Transaction”), unless the Termination Transaction has been approved by the General Partner, and in connection with which all Limited Partners either will receive or will have the right to elect to receive, for each Unit, an amount of cash, securities or other property equal to the product of the Conversion Factor multiplied by the greatest amount of cash, securities or other property paid to a holder of the number of Shares corresponding to such Unit (after giving effect to the Conversion Right, where applicable) in consideration of one such Share at any time during the period from and after the date on which the Termination Transaction is consummated; provided that if, in

connection with the Termination Transaction, a purchase, tender or exchange offer shall have been made to and accepted by the holders of more than 50% of the outstanding Shares, each holder of Units shall receive, or shall have the right to elect to receive without any right of consent set forth above in this subsection B, the greatest amount of cash, securities or other property which such holder would have received had it exercised the Redemption Right and received Shares in exchange for its Units (after giving effect to the Conversion Right, where applicable) immediately prior to the expiration of such purchase, tender or exchange offer and had thereupon accepted such purchase, tender or exchange offer. Each Limited Partner holding Preferred Units shall have the immediate right to exercise the Conversion Right in the event of a Termination Transaction.

“C. Option to Purchase General Partner’s Interest .

(i) The General Partner hereby grants to Hoyt Properties, Inc. and WLPT Funding LLC (each, an “Optionee” and collectively, the “Optionees”) the exclusive option (the “Option”) to purchase all of the Units held by the General Partner. The Option is irrevocable until, and may be exercised at any time after September 30, 2003 and before, March 31, 2004 (the “Termination Date”). The Option shall be exercisable by the Optionees by delivering to the General Partner a completed and fully executed Option Exercise Notice (in the form attached hereto as Exhibit F ), not less than thirty (30) business days prior to the Termination Date. The consummation of the purchase of the Units held by the General Partner shall occur within thirty (30) business days of receipt of the Option Exercise Notice by the General Partner (the “Closing Date”).

(ii) If the Optionees do not exercise the Option and the General Partner has not materially breached any of its representations, warranties or covenants contained in the Partnership Agreement since the day of , 2003, the General Partner will have the right, for thirty (30) days after the Termination Date, to put the Option to the Optionees by executing and delivering to the Optionees the Put Notice (in the form attached hereto as Exhibit G ), at which time the Optionees shall purchase all of the General Partner’s Units (the “Put Closing Date”).

(iii) The purchase price payable by the Optionees to the General Partner for the Units shall be an amount equal to ninety-two and nine-tenths percent (92.9%) of the difference between (a) $8,275,000, based on the appraisal reports dated January 8, 2003 prepared by Shenehon Company and approved by the independent trustees of Stonehaven’s existing board of trustees, and (b) the principal amount of the outstanding mortgage balances encumbering the Properties as of the Closing Date or the Put Closing Date, as applicable (the “Purchase Price”), however, in no case will the mortgage balances be greater than $6,443,075.

(iv) The Purchase Price shall be payable in cash or in cash and Shares owned by the Optionees (valued at the Fair Market Value of such Shares) at the option of the Optionees, provided , however , that at least 50% of the Purchase

Price shall be paid in cash. “Fair Market Value” means the amount per Share equal to the average closing price for the thirty (30) calendar days immediately preceding the Closing Date, provided however, that the Fair Market Value shall not be less than $0.151 per common share equivalent of the Shares. In addition, General Partner will accept shares of Class A Preferred Stock based on a conversion ratio of one share of RPPA equal to 22.881 shares of common stock. All cash received by the Properties for tenant security deposits will be paid to the General Partner on the Closing Date or Put Closing Date, as applicable.

(v) The Purchase Price shall be subject to nine-two and nine-tenths percent (92.9%) of the following credits and adjustments:

(a) Any rents, prepaid items, mortgage interest expense and other applicable items with respect to the Properties shall be prorated as of the date the sale of the General Partner’s Units is consummated.

(b) Ad valorem, real and tangible personal property taxes with respect to the Properties for the calendar year in which the sale of the General Partner’s Units is consummated shall be prorated between the General Partner and the Optionees as of the date the sale of the General Partner’s Units is consummated on the basis of no applicable discount. If the amount of such taxes with respect to the Properties for the calendar year in which the sale of the General Partner’s Units is consummated has not been determined as of the date the sale of the General Partner’s Units is consummated, then the taxes with respect to the Properties for the preceding calendar year, on the basis of no applicable discount, shall be used to calculate such prorations, with known changes in valuation or millage applied. The prorated taxes shall be an adjustment to the Purchase Price. If the actual amount of any such taxes varies by more than $5,000 from estimates used at the time the sale of the General Partner’s Units is consummated to prorate such taxes, then the General Partner and the Optionees shall re-prorate such taxes within ten (10) days following a request based on the actual amount of the tax bill.

(c) The amount of cash held on behalf of the Properties, including without limitation, in operating accounts, escrow accounts, and reserve accounts, as of the Closing Date or Put Date, as applicable, shall be a separate proration credit paid to the General Partner in cash only, which will be distributed to the General Partner on a tax-free basis.

(vi) The General Partner and Optionees shall each bear their own costs and expenses in connection with the Optionees acquiring the General Partners’ Units and the Properties. The Optionees, jointly and severally, and the General Partner agree to indemnify one another and hold one another harmless from any and all claims for their respective costs or expenses arising in connection with the Optionee’s acquisition of the General Partners’ Units and the Properties.

(vii) On the Closing Date or Put Closing Date, as applicable, the Optionees shall deliver to the General Partner the Purchase Price by cash, check or wire transfer, and if applicable, certificates representing the Shares together with a duly exercised assignment or assignments in proper form to transfer to the General Partner the Shares, against delivery by the General Partner to the Optionees of (A) certificates representing the Units, together with a duly exercised assignment or assignments in proper form to transfer to the Optionees the Units so acquired and (B) a written resignation of the General Partner as general Partner, effective at such closing. Upon the consummation of any sale pursuant to this Section 11.2.C, the Optionees will become the General Partner under the partnership Agreement.

(viii) The General Partner represents and warrants that (i) subject to any required Limited Partner or shareholder approval which the General Partner undertakes to obtain, the General Partner has and will have the right to grant the Option, to transfer to the Optionees all of the General Partner’s Units and all of the General Partner’s interests in this Agreement, free and clear of any lien, claim, encumbrance or restriction of any type or nature whatsoever (other than restrictions on resale that may arise under applicable federal and state securities laws); (ii) the General Partner’s Units are not and will not be subject to any right of first refusal, right of repurchase or any similar right granted to, or retained by, the Partnership, any Limited Partner of the Company or any other person; (iii) there is no provision of any existing agreement, and the General Partner will not enter into an agreement, by which the General Partner is or would be bound (or to which the General Partner is or would become subject) that conflicts or would conflict with this Section 11.2.C or the performance of the General Partner’s obligations under this Section 11.2.C; (iv) If physical certificates exist, the General Partner agrees to place a legend on the Units referencing this Section 11.2.C, and the restriction on transfer of the Units; and (v) upon the reasonable request of the Optionees, the General Partner will prepare, execute and deliver any further instruments and do any further acts that may be necessary to carry out more effectively the purpose of this Section 11.2.C.”

5. The Partnership Agreement is hereby amended by adding the attached Exhibit F , Exhibit G and Exhibit H .

6. Each of the parties hereto represents and warrants to the other parties hereto that the execution, delivery and performance of this Amendment have been duly authorized by all necessary corporate action and that this Amendment constitutes the valid and binding obligations of each such party, enforceable against such party in accordance with its terms. The parties further represent and warrant that the Management Agreement is currently in full force and effect.

7. Except as expressly amended hereby, the Partnership Agreement is hereby ratified and confirmed by the applicable parties hereto and shall remain in full force and effect.

8. This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware without regard to applicable principles of conflicts of law. This Amendment may be executed by facsimile signature and in one or more counterparts, all of which, when executed and delivered, shall be considered one and the same agreement.

9. In all other respects, the provisions of the Partnership Agreement shall remain in full force and effect and the Partnership Agreement shall continue in existence as amended hereby.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their respective officers duly authorized, all as of the date first above written.

	STONEHAVEN REALTY TRUST, a Maryland real estate investment trust, as General Partner


	By
	Name:
	Title:


	WLPT FUNDING LLC


	By
	Name:
	Title:


	LAMBERT EQUITIES


	By
	Name:
	Title:



	Steven Hoyt



	Gary Lally

EXHIBIT F

OPTION EXERCISE NOTICE

[Date]

1. Exercise of Option . Effective as of the above date, the undersigned hereby exercises [his/its/their] option to purchase all of the Units owned by the General Partner of Wellington Properties Investments, L.P. pursuant to the Partnership Agreement, dated August 31, 1998, between the Partnership and the other persons named therein, as amended on , 2003 (the “Agreement”). Capitalized words used but not defined herein have the meanings given to them in the Agreement, as amended.

2. Purchase Price . The Purchase Price for the Units is an aggregate of $ payable in Shares of [Common and/or Preferred Stock of Stonehaven Realty Trust] valued at a Fair Market Value of $ per Share, and $ payable in cash to the General Partner.

3. Closing Date . The Closing Date will occur on , 200 .

Submitted by:

[OPTIONEE]

EXHIBIT G

PUT NOTICE

[Date]

1. Put Notice . Effective as of the above date, the undersigned hereby exercises its right to force the sale of all of the Units owned by the General Partner of Wellington Properties Investments, L.P. to [Optionee] pursuant to the Partnership Agreement, dated August 31, 1998, between the Partnership and the other persons named therein, as amended on , 2003 (the “Agreement”). Capitalized words used but not defined herein have the meanings given to them in the Agreement, as amended.

2. Representations, Warranties and Covenants . The undersigned hereby certifies that the General Partner has not breached any of its representations, warranties or covenants to [Optionee] .

3. Closing Date . The Closing Date will occur on , 200 .

Submitted by:

STONEHAVEN REALTY TRUST , a Maryland real estate investment trust


By:
Name:
Title:

EXHIBIT H

THE PROPERTIES

NICOLLET BUSINESS CAMPUS VI

Plymouth Technology Park Buildings i, ii, & III

Exhibit 2.10

FORM OF

AGREEMENT OF LIMITED PARTNERSHIP

PARAGON REAL ESTATE, L.P.

Dated: , 2003

TABLE OF CONTENTS

ARTICLE I
	DEFINED TERMS; EXHIBITS
		Section 1.1	Defined Terms
		Section 1.2	Exhibits, Schedules, Etc.
ARTICLE II
	FORMATION; ADMISSION OF LIMITED PARTNERS;
	NAME; PLACE OF BUSINESS AND REGISTERED AGENT
		Section 2.1	Certificate of Limited Partnership; Other Filings
		Section 2.2	Limited Partners; Additional Limited Partners
		Section 2.3	Name; Principal Place of Business
		Section 2.4	Registered Agent and Registered Office
ARTICLE III
	BUSINESS AND TERM OF PARTNERSHIP
		Section 3.1	Business
		Section 3.2	Term
ARTICLE IV
	CAPITAL CONTRIBUTIONS
		Section 4.1	General Partner
		Section 4.2	Limited Partners
		Section 4.3	Additional Capital Contributions and Issuances of Additional Partnership Interests
		Section 4.4	Additional Funding
		Section 4.5	Equity Plan
		Section 4.6	Interest
		Section 4.7	Return of Capital
ARTICLE V
	PROFITS, LOSSES AND ACCOUNTING
		Section 5.1	Profits
		Section 5.2	Accounting
		Section 5.3	Partners’ Accounts
		Section 5.4	Section 754 Elections
ARTICLE VI

	POWERS, DUTIES, LIABILITIES, COMPENSATION AND VOTING OF GENERAL PARTNER
		Section 6.1	Powers of General Partner
		Section 6.2	Delegation of Authority
		Section 6.3	Duties of General Partner
		Section 6.4	Liabilities of General Partner; Indemnification
		Section 6.5	Compensation of General Partner; Reimbursement
		Section 6.6	Reliance on Act of General Partner
		Section 6.7	Outside Services; Dealings with Affiliates; Outside Activities
		Section 6.8	General Partner Participation
ARTICLE VII
	RIGHTS, PROHIBITIONS AND REPRESENTATIONS WITH RESPECT TO LIMITED PARTNERS
		Section 7.1	Rights of Limited Partners
		Section 7.2	Prohibitions with Respect to the Limited Partners
		Section 7.3	Ownership by Limited Partner of Corporate General Partner or Affiliate
		Section 7.4	Grant of Redemption Rights
		Section 7.5	Warranties and Representations of the Limited Partners
		Section 7.6	Indemnification by Limited Partners
		Section 7.7	Limited Partner Guarantees
		Section 7.8	No Sale of Property
ARTICLE VIII
	DISTRIBUTIONS AND PAYMENTS TO PARTNERS
		Section 8.1	Distributions of Cash Flow
		Section 8.2	REIT Distribution Requirements
		Section 8.3	No Right to Distributions in Kind
		Section 8.4	Disposition Proceeds
		Section 8.5	Withdrawals
		Section 8.6	Amounts Withheld
ARTICLE IX
	TRANSFERS OF INTERESTS
		Section 9.1	General Partner

		Section 9.2	Admission of a Substitute or Additional General Partner
		Section 9.3	Effect of Bankruptcy, Withdrawal or Dissolution of a General Partner
		Section 9.4	Removal of a General Partner
		Section 9.5	Restrictions on Transfer of Limited Partnership Interests
		Section 9.6	Admission of Substitute Limited Partner
		Section 9.7	Rights of Assignees of Partnership Interests
		Section 9.8	Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner
		Section 9.9	Joint Ownership of Interests
		Section 9.10	Transferees
		Section 9.11	Absolute Restriction
		Section 9.12	Investment Representation
ARTICLE X
	TERMINATION OF THE PARTNERSHIP
		Section 10.1	Termination
		Section 10.2	Payment of Debts
		Section 10.3	Debts to Partners
		Section 10.4	Remaining Distribution
		Section 10.5	Reserve
		Section 10.6	Final Accounting
ARTICLE XI
	AMENDMENTS
		Section 11.1	Authority to Amend
		Section 11.2	Notice of Amendments
ARTICLE XII
	POWER OF ATTORNEY
		Section 12.1	Power
		Section 12.2	Survival of Power
ARTICLE XIII
	CONSENTS, APPROVALS, VOTING AND MEETINGS
		Section 13.1	Method of Giving Consent or Approval
		Section 13.2	Meetings of Limited Partners
		Section 13.3	Opinion

iii

		Section 13.4	Submissions to Partners
ARTICLE XIV
	MISCELLANEOUS
		Section 14.1	Governing Law
		Section 14.2	Agreement for Further Execution
		Section 14.3	Entire Agreement
		Section 14.4	Severability
		Section 14.5	Notices
		Section 14.6	Mediation/Arbitration of Disputes
		Section 14.7	Titles and Captions
		Section 14.8	Counterparts
		Section 14.9	Pronouns
		Section 14.10	Survival of Rights
		Section 14.11	Personal Liability

AGREEMENT OF LIMITED PARTNERSHIP

PARAGON REAL ESTATE, L.P.

THIS AGREEMENT OF LIMITED PARTNERSHIP (this “Agreement”) is made and entered into as of the day of , 2003, by and among STONEHAVEN REALTY TRUST, a Maryland real estate investment trust, having an address at 5620 Smetana Drive, Suite 130, Minneapolis, Minnesota 55343, the general partner (“General Partner”), and the limited partners listed on Exhibit A attached hereto (“Limited Partners”), is intended to evidence the mutual agreement of the General Partner and the Limited Partners to form a limited partnership pursuant to Title 6, Chapter 17 of the Delaware Code (the “Act”) for the purposes and upon the terms and conditions hereinafter set forth.

ARTICLE I

DEFINED TERMS; EXHIBITS

Section 1.1 Defined Terms . Whenever used in this Agreement, the following terms shall have the meanings respectively assigned to them in this Article I, unless otherwise expressly provided herein or unless the context otherwise requires:

“Additional Funds” has the meaning set forth in Section 4.4 hereof.

“Additional Limited Partner” shall mean a Person admitted to this Partnership as a Limited Partner pursuant to and in accordance with Section 2.2(b) of this Agreement.

“Additional Securities” shall mean any additional REIT Shares (other than REIT Shares issued in connection with an exchange pursuant to Section 7.4 and Exhibit D hereof) or rights, options, warrants or convertible or exchangeable securities containing the right to subscribe for or purchase REIT Shares, as set forth in Section 4.3(a)(ii).

“Affiliate” of another Person shall mean (a) any Person directly or indirectly owning, controlling or holding with power to vote ten percent (10%) or more of the outstanding voting securities of such other Person; (b) any Person ten percent (10%) or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote by such other Person; (c) any Person directly or indirectly controlling, controlled by, or under common control with, such other Person; (d) any officer, director, member or partner of such other Person; and (e) if such other Person is an officer, director, member or partner in a company, the company for which such Person acts in any such capacity.

“Agreed Value” shall mean the fair market value of Contributed Property as agreed to by the Contributing Partner and the Partnership, using any reasonable method as they may adopt and the fair market value of the Partnership Properties after being adjusted in accordance with Part B of Exhibit B .

“Agreement” shall mean this Agreement of Limited Partnership of Paragon Real Estate, L.P. as amended, modified, supplemented or restated from time to time, as the context requires.

“Declaration of Trust” shall mean that certain Declaration of Trustof the General Partner, as amended, modified, supplemented or restated from time to time, as the context requires.

“Bankruptcy Code” shall mean the United States Bankruptcy Code, as amended, 11 U.S.C. sec. 101 et seq., and as hereafter amended from time to time.

“Business Day” shall mean any day when the New York Stock Exchange is open for trading.

“Capital Account” shall mean, as to any Partner, the account established and maintained for such Partner pursuant to Section 5.3 hereof.

“Capital Contribution” shall mean the amount in cash or the Agreed Value of Contributed Property contributed by each Partner (or his or her original predecessor in interest) to the capital of the Partnership for his interest in the Partnership.

“Cash Flow” shall mean the excess of cash revenues actually received by the Partnership in respect of Partnership operations for any period, less Operating Expenses for such period. Cash Flow shall not include Disposition Proceeds.

“Class A Limited Partners” shall mean those persons listed under the heading “Class A Limited Partners” on the signature pages hereto.

“Class B Limited Partners” shall mean those persons listed under the heading “Class B Limited Partners” on the signature pages hereto.

“Code” shall mean the Internal Revenue Code of 1986, as amended, and as hereafter amended from time to time. Reference to any particular provision of the Code shall mean that provision in the Code at the date hereof and any succeeding provision of the Code.

“Commission” shall mean the U.S. Securities and Exchange Commission.

“Computation Date” shall mean the date on which an Redemption Exercise Notice is delivered to the General Partner.

“Contributed Property” shall mean a Partner’s interest in property or other consideration (excluding services and cash) contributed to the Partnership by such Partner.

“Disposition Proceeds” shall mean the net cash proceeds from all sales and other dispositions (other than in the ordinary course of business) and all refinancings of Property, less any portion thereof used to establish reserves or reinvested by the General Partner, all as determined by the General Partners(s). Disposition Proceeds shall include

all principal and interest payments with respect to any note or other obligation received by the Partnership in connection with sales and other dispositions (other than in the ordinary course of business) of Property.

“Equity Plan” shall mean the General Partner’s 1998 Share Option Plan, as the same may be amended from time to time.

“Event of Bankruptcy” shall mean as to any Person the filing of a petition for relief as to such Person as debtor or bankrupt under the Bankruptcy Code or similar provision of law of any jurisdiction (except if such petition is contested by such Person and has been dismissed within ninety (90) days of the filing thereof); insolvency of such Person as finally determined by a court of competent jurisdiction; filing by such Person of a petition or application to accomplish the same or for the appointment of a receiver or a trustee for such Person or a substantial part of such Person’s assets; commencement of any proceedings relating to such Person as a debtor under any other reorganization, arrangement, insolvency, adjustment of debt or liquidation law of any jurisdiction, whether now in existence or hereinafter in effect, either by such Person or by another; provided, however, that if such proceeding is commenced by another, such Person indicates his approval of such proceeding, consents thereto or acquiesces therein, or such proceeding is contested by such Person and has not been finally dismissed within ninety (90) days. The term “Event of Bankruptcy” as defined in this Agreement and as used herein, is intended and shall be deemed to supersede and replace the events of withdrawal described in Sections 17-402(a)(4) and (5) of the Act.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“General Partner” shall mean Stonehaven Realty Trust and any Person who becomes a substitute or additional General Partner as provided herein, and any of their successors as General Partner.

“General Partnership Interest” shall mean the ownership interest of a General Partner in the Partnership.

“Indemnitee” shall mean (i) any Person made a party to a proceeding by reason of its status as (A) the General Partner, or (B) a trustee or officer of the General Partner, and (ii) such other Persons (including Affiliates of the General Partner or the Partnership) as the General Partner may designate from time to time, in its sole and absolute discretion.

“Initial Property” shall mean the Property listed on Exhibit C hereto.

“IRS” shall mean the Internal Revenue Service.

“Limited Partners” shall mean the Class A Limited Partners and the Class B Limited Partners in their respective capacities as limited partners of the Partnership, their permitted successors or assigns who have been admitted to the Partnership as limited partners of the Partnership, or any Person who, at the time of reference thereto, is a limited partner of the Partnership.

“Limited Partnership Interest” shall mean the ownership interest of a Limited Partner in the Partnership at any particular time, including the right of such Limited Partner to any and all benefits to which such Limited Partner may be entitled as provided in this Agreement and in the Act, together with the obligations of such Limited Partner to comply with all the provisions of this Agreement and of the Act.

“Majority-In-Interest of the Limited Partners” shall mean Limited Partner(s) who hold in the aggregate more than fifty percent (50%) of the Percentage Interests then allocable to and held by the Limited Partners, as a class.

“Operating Expenses” shall mean (i) all administrative and operating costs and expenses incurred by the Partnership, (ii) those administrative costs and expenses of the General Partner, including any salaries or other payments to trustees, officers or employees of the General Partner, and any accounting and legal expense of the General Partner, which expenses the Partners have agreed, are expenses of the Partnership and not the General Partner, and (iii) to the extent not included in clause (ii) above, REIT Expenses; provided, however, that Operating Expenses shall not include any administrative costs and expenses incurred by the General Partner that are attributable to properties or partnership interests in a Subsidiary that are owned by the General Partner directly.

“Partner” shall mean the General Partner or any Limited Partner.

“Partnership” shall mean Paragon Real Estate, L.P., a Delaware limited partnership.

“Partnership Interest” shall mean an ownership interest in the Partnership representing a Capital Contribution by either a Limited Partner or the General Partner and includes any and all benefits to which the holder of such an ownership interest may be entitled as provided in this Agreement or the Act, together with all obligations of such Person to comply with the terms and provisions of this Agreement and the Act.

“Partnership Record Date” shall mean the record date established by the General Partner for the distribution of Cash Flow pursuant to Sections 8.1 and 8.2 hereof, which record date shall be the same as the record date established by the General Partner for a distribution to its shareholders of some or all of its portion of such distribution.

“Partnership Unit” shall mean a unit of interest in the Partnership issued under this Agreement. The initial issuance of Partnership Units to each Partner is as set forth on Exhibit A hereto.

“Percentage Interest” shall mean the percentage ownership interest in the Partnership of each Partner, as determined by dividing the Partnership Units owned by a Partner by the total number of Partnership Units then outstanding.

“Person” shall mean any individual, partnership, corporation, limited liability company, trust or other entity.

“Profits” and “Losses” shall have the meaning set forth in Section 5.2(c) hereof.

“Property” shall mean the Initial Property or other investment in which the Partnership holds an ownership interest.

“REIT” shall mean a real estate investment trust under Sections 856 through 860, inclusive, of the Code.

“REIT Expenses” means (i) costs and expenses relating to the continuity of existence of the General Partner and any Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be included within the definition of General Partner), including taxes, fees and assessments associated therewith, any and all costs, expenses or fees payable to any trustee, director, officer, or employee of the General Partner, (ii) costs and expenses relating to a public offering and registration of securities or private offering of securities by the General Partner and all statements, reports, fees and expenses incidental thereto, including underwriting discounts and selling commissions applicable to any such offering of securities, (iii) costs and expenses associated with the preparation and filing of any periodic reports by the General Partner under federal, state or local laws or regulations, including filings with the Commission, (iv) costs and expenses associated with compliance by the General Partner with laws, rules and regulations promulgated by any regulatory body, including the Commission, and (v) all other operating or administrative costs of the General Partner, including, without limitation, insurance premiums, and legal, accounting and trustees fees, incurred in the ordinary course of its business on behalf of or in connection with the Partnership.

“REIT Share” shall mean one share of common stock, $0.01 par value, of the General Partner.

“Subsidiary” shall mean, with respect to any Person, any corporation or other entity of which a majority of (i) the voting power of the voting equity securities, or (ii) the outstanding equity interests, are owned, directly or indirectly, by such Person.

“Substitute General Partner” has the meaning set forth in Section 9.2.

“Substitute Limited Partner” shall mean any Person admitted to the Partnership as a Limited Partner pursuant to Section 9.6 hereof.

“Transfer” has the meaning set forth in Section 9.5(a) hereof.

“Value” shall mean, with respect to a REIT Share, the average of the daily market price for the thirty (30) consecutive trading days immediately preceding the Valuation Date. The market price for each such trading day shall be: (i) if the REIT Shares are listed or admitted to trading on any national securities exchange or the NASDAQ National Market System, the closing price, regular way, on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices on such day; (ii) if the REIT Shares are not listed or admitted to trading on any national securities exchange or the NASDAQ National Market System, the last reported sale price on such day or, if no sale takes place

on such day, the average of the closing bid and asked prices on such day, as reported by a reliable quotation source designated by the General Partner; or (iii) if the REIT Shares are not listed or admitted to trading on any national securities exchange or the NASDAQ National Market System and no such last reported sale price or closing bid and asked prices are available, the average of the reported high bid and low asked prices on such day, as reported by a reliable quotation source designated by the General Partner, or if there shall be no bid and asked prices on such day, the average of the high bid and low asked prices, as so reported, on the most recent day (not more than ten (10) days prior to the date in question) for which prices have been so reported; provided, however, that if there are no bid and asked prices reported during the ten (10) days prior to the date in question, the Value of the REIT Shares shall be determined by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. In the event the REIT Shares includes rights that a holder of REIT Shares would be entitled to receive, and the General Partner acting in good faith determines that the value of such rights is not reflected in the Value of the REIT Shares determined as aforesaid, then the Value of such rights shall be determined by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate.

Section 1.2 Exhibits, Schedules, Etc. References to “Exhibit” or to a “Schedule” are, unless otherwise specified, to one of the Exhibits or Schedules attached to this Agreement, and references to an “Article” or a “Section” are, unless otherwise specified, to one of the Articles or Sections of this Agreement. Each Exhibit and Schedule attached hereto and referred to herein is hereby incorporated herein by reference.

ARTICLE II

FORMATION; ADMISSION OF LIMITED PARTNERS;

NAME; PLACE OF BUSINESS AND REGISTERED AGENT

Section 2.1 Certificate of Limited Partnership; Other Filings . The General Partner shall prepare (or caused to be prepared), execute, acknowledge, record and file at the expense of the Partnership, a Certificate of Limited Partnership and all requisite fictitious name statements and notices in such places and jurisdictions as may be required by the Act or necessary to cause the Partnership to be treated as a limited partnership under, and otherwise to comply with, the laws of each state or other jurisdiction in which the Partnership conducts business.

Section 2.2 Limited Partners; Additional Limited Partners .

(a) The Limited Partners shall be those Persons identified as Limited Partners on Exhibit A attached hereto, as amended from time to time pursuant to the terms of this Agreement, and such Persons are hereby admitted to the Partnership as Limited Partners.

(b) The General Partner shall in a timely fashion amend this Agreement and, if required by the Act, the Certificate of Limited Partnership to reflect the admission pursuant to the terms of this Agreement of a Person as a Limited Partner.

Section 2.3 Name; Principal Place of Business . The name of the Partnership shall be Paragon Real Estate, L.P. The principal place of business of the Partnership shall be at 1240 Huron Road, Suite 301, Cleveland, Ohio 44115. The General Partner may at any time change the location of such office, provided the General Partner gives notice to the Partners of any such change.

Section 2.4 Registered Agent and Registered Office . The registered agent of the Partnership shall be 1600 CNB Corp., located at One Cleveland Center, 20 ^th Floor, 1375 East Ninth Street, Cleveland, Ohio 44114, or such other Person as the General Partner may select in its sole discretion. The registered office of the Partnership shall be 1240 Huron Road, Suite 301, Cleveland, Ohio 44115, or such other location as the General Partner may select in its sole and absolute discretion.

ARTICLE III

BUSINESS AND TERM OF PARTNERSHIP

Section 3.1 Business . The purpose and nature of the business of the Partnership is to conduct any business that may lawfully be conducted by a limited partnership organized pursuant to the Act, provided, however, that such business shall be limited to and conducted in such a manner as to permit the General Partner at all times to be classified as a REIT, unless the Board of Trustees of the General Partner determines to cease to maintain the qualification of the General Partner as a REIT. To consummate the foregoing and to carry out the obligations of the Partnership in connection therewith or incidental thereto, the General Partner shall have the authority, in accordance with and subject to the limitations set forth elsewhere in this Agreement, to make, enter into, perform and carry out any arrangements, contracts or agreements of every kind for any lawful purpose, without limit as to amount or otherwise, with any corporation, association, partnership, limited liability company, firm, trustee, syndicate, individual or any political or governmental division, subdivision or agency, domestic or foreign, and generally to make and perform agreements and contracts of every kind and description and to do any and all things necessary or incidental to the foregoing for the protection and enhancement of the assets of the Partnership.

Section 3.2 Term . The Partnership as herein constituted shall continue for perpetuity, unless earlier dissolved or terminated pursuant to law or the provisions of this Agreement.

ARTICLE IV

CAPITAL CONTRIBUTIONS

Section 4.1 General Partner . The General Partner has contributed cash and certain other assets to the capital of the Partnership in the amount set forth opposite the name of the General Partner on Exhibit A attached hereto.

Section 4.2 Limited Partners . The Limited Partners have contributed their respective ownership interests in the Property to the capital of the Partnership. The Agreed Values of the Limited Partners’ proportionate ownership interests in the Property is set forth on Exhibit A attached hereto.

Section 4.3 Additional Capital Contributions and Issuances of Additional Partnership Interests . Except as provided in this Section 4.3 or in Section 4.4, the Partners shall have no obligation to make any additional Capital Contributions or loans to the Partnership. The General Partner may contribute additional capital to the Partnership, from time to time, and receive additional Partnership Interests in respect thereof, in the manner contemplated in this Section 4.3.

(a) Issuances of Additional Partnership Interests.

(i) General . The General Partner is hereby authorized to cause the Partnership to issue such additional Partnership Interests in the form of Partnership Units for any Partnership purpose at any time or from time to time, to the Partners or to other Persons for such consideration and on such terms and conditions as shall be established by the General Partner in its sole and absolute discretion, all without the approval of any of the Limited Partners. Any additional Partnership Interest issued thereby may be issued in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to Limited Partnership Interests, all as shall be determined by the General Partner in its sole and absolute discretion and without the approval of any Limited Partner, subject to Delaware law, including, without limitation, (i) the allocations of items of Partnership income, gain, loss, deduction and credit to each such class or series of Partnership Interests; (ii) the right of each such class or series of Partnership Interests to share in Partnership distributions; and (iii) the rights of each class or series of Partnership Interests upon dissolution and liquidation of the Partnership

(b) Certain Deemed Contributions of Proceeds of Issuance of REIT Shares . In connection with any and all issuances of REIT Shares, the General Partner shall contribute all of the proceeds raised in connection with such issuance to the Partnership as Capital Contributions, provided that if the proceeds actually received and contributed by the General Partner are less than the gross proceeds of such issuance as a result of any underwriter’s discount or other expenses paid or incurred in connection with such issuance, then the General Partner shall be deemed to have made Capital Contributions to the Partnership in the aggregate amount of the gross proceeds of such issuance and the Partnership shall be deemed simultaneously to have paid such offering expenses in connection with the required issuance of additional Partnership Units to the General Partner for such Capital Contributions pursuant to Section 4.3(a) hereof.

Section 4.4 Additional Funding . If the General Partner determines that it is in the best interests of the Partnership to provide for additional Partnership funds (“Additional Funds”) for any Partnership purpose, the General Partner may (i) cause the Partnership to obtain such funds from outside borrowings, or (ii) elect to borrow such funds itself and lend these funds to the Partnership on the same terms and conditions as applicable to its borrowings.

Section 4.5 Equity Plan . If at any time or from time to time stock options or other equity compensation granted in connection with the General Partner’s Equity Plan or other compensation programs are exercised in accordance with the terms thereof:

(a) the General Partner shall, as soon as practicable after such exercise, contribute to the capital of the Partnership an amount equal to the exercise price paid to the General Partner by such exercising party in connection with the exercise of the stock option;

(b) the Partnership shall issue and the General Partner shall receive the number of Partnership Units corresponding to the number of REIT Shares delivered by the General Partner to such exercising party multiplied by a fraction the numerator of which is 100% and the denominator of which is the Exchange Factor (as defined in Exhibit D hereto) in effect on the date of such contribution;

(c) after the issuance of such Partnership Units to the General Partner, the Percentage Interest of each Limited Partner shall be adjusted such that the Percentage Interest of the Limited Partner shall be equal to a fraction, the numerator of which is the number of Partnership Units owned by such Limited Partner and the denominator of which is the total number of issued and outstanding Partnership Units on such date. The General Partner shall promptly give each Limited Partner written notice of its Percentage Interest, as adjusted; and

(d) after the issuance of such Partnership Units to the General Partner, the Percentage Interest of the General Partner shall be adjusted such that it equals 100% minus the sum of the Percentage Interests of all Limited Partners immediately after being adjusted pursuant to paragraph (c) of this Section 4.5.

Section 4.6 Interest . No interest shall be paid on the Capital Contribution or Capital Account of any Partner.

Section 4.7 Return of Capital . Except as expressly provided in this Agreement, no Partner shall be entitled to demand or receive the return of his Capital Contribution.

ARTICLE V

PROFITS, LOSSES AND ACCOUNTING

Section 5.1 Profits . After giving effect to the special allocations set forth in Part A of Exhibit B hereof, Profits and Losses shall be allocated among the Partners in accordance with their respective Percentage Interests.

Section 5.2 Accounting .

(a) The books of the Partnership shall be kept on the accrual basis and in accordance with generally accepted accounting principles consistently applied.

(b) The fiscal year of the Partnership shall be the calendar year.

(c) The terms “Profits” and “Losses,” as used herein, shall mean all items of income, gain, expense or loss as determined utilizing federal income tax accounting principles and shall also include each Partner’s share of income described in Section 705(a)(1)(B) of the Code, any expenditures described in Section 705(a)(2)(B) of the Code, any expenditures described in Section 709(a) of the Code which are not deducted or amortized in accordance with Section 709(b) of the Code, losses not deductible pursuant to Sections 267(a) and 707(b) of the Code and adjustments made pursuant to Exhibit B attached hereto.

(d) The General Partner shall be the Tax Matters Partner of the Partnership within the meaning of Section 6231(a)(7) of the Code. As Tax Matters Partner, the General Partner shall have the right and obligation to take all actions authorized and required, respectively, by the Code for the Tax Matters Partner. The General Partner shall have the right to retain professional assistance in respect of any audit of the Partnership by the IRS, and all out-of-pocket expenses and fees incurred by the General Partner on behalf of the Partnership as Tax Matters Partner shall constitute Operating Expenses of the Partnership. In the event the General Partner receives notice of a final Partnership adjustment under Section 6223(a)(2) of the Code, the General Partner shall either (i) file a court petition for judicial review of such final adjustment within the period provided under Section 6226(a) of the Code, a copy of which petition shall be mailed to each Limited Partner on the date such petition is filed, or (ii) mail a written notice to each Limited Partner, within such period, that describes the General Partner’s reasons for determining not to file such a petition.

(e) Except as specifically provided herein, all elections required or permitted to be made by the Partnership under the Code shall be made by the General Partner in its sole discretion.

(f) Any Partner shall have the right to a private audit of the books and records of the Partnership, provided such audit is made at the expense of the Partner desiring it, and it is made during normal business hours.

Section 5.3 Partners’ Accounts .

(a) There shall be maintained a Capital Account for each Partner in accordance with this Section 5.3 and the principles set forth in Exhibit B attached hereto and made a part hereof. The amount of cash and the net fair market value of property contributed to the Partnership by each Partner, net of liabilities assumed by the Partnership, shall be credited to its Capital Account, and from time to time, but not less often than annually, the share of each Partner in Profits, Losses and fair market value of distributions shall be credited or charged to its Capital Account. The determination of Partners’ Capital Accounts, and any adjustments thereto, shall be made consistent with tax accounting and other principles set forth in Section 704(b) of the Code and applicable regulations thereunder and Exhibit B attached hereto.

(b) Except as otherwise specifically provided herein or in a guarantee of a Partnership liability, signed by a Limited Partner, no Limited Partner shall be required to make any further contribution to the capital of the Partnership to restore a loss, to discharge any liability of the Partnership or for any other purpose, nor shall any Limited Partner personally be liable for any liabilities of the Partnership or of the General Partner except as provided by law or

this Agreement. All Limited Partners hereby waive their right of contribution which they may have against other Partners in respect of any payments made by them under any guarantee of Partnership debt.

(c) Immediately following the transfer of any Partnership Interest, the Capital Account of the transferee Partner shall be equal to the Capital Account of the transferor Partner attributable to the transferred interest, and such Capital Account shall not be adjusted to reflect any basis adjustment under Section 743 of the Code.

(d) For purposes of computing the amount of any item of income, gain, deduction or loss to be reflected in the Partners’ Capital Accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes, taking into account any adjustments required pursuant to Section 704(b) of the Code and the applicable regulations thereunder as more fully described in Exhibit B attached hereto.

Section 5.4 Section 754 Elections . The General Partner shall elect, pursuant to Section 754 of the Code, to adjust the basis of the Partnership’s assets for all transfers of Partnership interests if such election would benefit any Partner or the Partnership.

ARTICLE VI

POWERS , DUTIES, LIABILITIES, COMPENSATION

AND VOTING OF GENERAL PARTNER

Section 6.1 Powers of General Partner . Notwithstanding any provision of this Agreement to the contrary, the General Partner’s discretion and authority are subject to the limitations imposed by law and the General Partner’s Declaration of Trust and By-Laws. Subject to the foregoing and to other limitations imposed by this Agreement, the General Partner shall have full, complete and exclusive discretion to manage and control the business and affairs of the Partnership and make all decisions affecting the business and assets of the Partnership. Without limiting the generality of the foregoing (but subject to the restrictions specifically contained in this Agreement), the General Partner shall have the power and authority to take the following actions on behalf of the Partnership:

(a) to acquire, purchase, own, lease and dispose of any real property and any other property or assets that the General Partner determines are necessary or appropriate or in the best interests of conducting the business of the Partnership;

(b) to construct buildings and make other improvements (including renovations) on or to the properties owned or leased by the Partnership;

(c) to borrow money for the Partnership, issue evidences of indebtedness in connection therewith, refinance, guarantee, increase the amount of, modify, amend or change the terms of, or extend the time for the payment of, any indebtedness or obligation of or to the Partnership, and secure such indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership’s assets;

(d) to pay, either directly or by reimbursement, for all Operating Expenses to third parties or to the General Partner (as set forth in this Agreement);

(e) to lease all or any portion of any of the Partnership’s assets, whether or not the terms of such leases extend beyond the termination date of the Partnership and whether or not any portion of the Partnership’s assets so leased are to be occupied by the lessee, or, in turn, subleased in whole or in part to others, for such consideration and on such terms as the General Partner may determine;

(f) to prosecute, defend, arbitrate, or compromise any and all claims or liabilities in favor of or against the Partnership, on such terms and in such manner as the General Partner may reasonably determine, and similarly to prosecute, settle or defend litigation with respect to the Partners, the Partnership, or the Partnership’s assets; provided, however, that the General Partner may not, without the consent of 80.1% of the Partners, confess a judgment against the Partnership;

(g) to file applications, communicate, and otherwise deal with any and all governmental agencies having jurisdiction over, or in any way affecting, the Partnership’s assets or any other aspect of the Partnership business;

(h) to make or revoke any election permitted or required of the Partnership by any taxing authority;

(i) to maintain such insurance coverage for public liability, fire and casualty, and any and all other insurance for the protection of the Partnership, for the conservation of Partnership assets, or for any other purpose convenient or beneficial to the Partnership, in such amounts and such types as the General Partner shall determine from time to time;

(j) to determine whether or not to apply any insurance proceeds for any Property to the restoration of such Property or to distribute the same;

(k) to retain providers of services of any kind or nature in connection with the Partnership business and to pay therefor such reasonable remuneration as the General Partner may deem proper;

(l) to negotiate and conclude agreements on behalf of the Partnership with respect to any of the rights, powers and authority conferred upon the General Partner, including, without limitation, management agreements, franchise agreements, agreements with federal, state or local licensing agencies and agreements with operators of restaurants and bars;

(m) to maintain accurate accounting records and to file promptly all federal, state and local income tax returns on behalf of the Partnership;

(n) to form or acquire an interest in, and contribute property to, any further limited or general partnerships, joint ventures or other relationships that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of property to, its Subsidiaries and any other Person in which it has an equity interest from time to time);

(o) to distribute Partnership cash or other Partnership assets in accordance with this Agreement;

(p) to establish Partnership reserves for working capital, capital expenditures, contingent liabilities or any other valid Partnership purpose;

(q) to take whatever action the General Partner deems appropriate to maintain an equivalency of Partnership Units and REIT Shares; and

(r) to take such other action, execute, acknowledge, swear to or deliver such other documents and instruments, and perform any and all other acts the General Partner deems necessary or appropriate for the formation, continuation and conduct of the business and affairs of the Partnership (including, without limitation, all actions consistent with qualification of the General Partner as a REIT) and to possess and enjoy all of the rights and powers of a general partner as provided by the Act.

Except as otherwise provided herein, to the extent the duties of the General Partner require expenditures of funds to be paid to third parties, the General Partner shall not have any obligations hereunder except to the extent that Partnership funds are reasonably available to it for the performance of such duties, and nothing herein contained shall be deemed to authorize or require the General Partner, in its capacity as such, to expend its individual funds for payment to third parties or to undertake any individual liability or obligation on behalf of the Partnership.

Section 6.2 Delegation of Authority . The General Partner may delegate any or all of its powers, rights and obligations hereunder, and may appoint, employ, contract or otherwise deal with any Person for the transaction of the business of the Partnership, which Person may, under supervision of the General Partner, perform any acts or services for the Partnership as the General Partner may approve.

Section 6.3 Duties of General Partner .

(a) The General Partner, subject to the limitations contained elsewhere in this Agreement, shall manage or cause to be managed the affairs of the Partnership in a prudent and businesslike manner and shall devote sufficient time and effort to the Partnership affairs.

(b) In carrying out its obligations, the General Partner shall:

(i) Render annual reports to all Partners with respect to the operations of the Partnership;

(ii) On or before April 30th of every year, mail to all persons who were Partners at any time during the Partnership’s prior fiscal year an annual report of the Partnership, including all necessary tax information, and any other information regarding the Partnership and its operations during the prior fiscal year deemed by the General Partner to be material;

(iii) Maintain complete and accurate records of all business conducted by the Partnership and complete and accurate books of account (containing such information as shall be necessary to record allocations and distributions), and make such records and books of account available for inspection and audit by any Partner or such Partner’s duly authorized representative (at the sole expense of such Partner) during regular business hours and at the principal office of the Partnership; and

(iv) Cause to be filed such certificates and do such other acts as may be required by law to qualify and maintain the Partnership as a limited partnership under the laws of the State of Delaware.

(c) The General Partner shall take such actions as it deems appropriate to maintain an equivalency of Partnership Units and REIT Shares.

Section 6.4 Liabilities of General Partner; Indemnification .

(a) The General Partner shall not be liable for the return of all or any part of the Capital Contributions of the Limited Partners. Any returns shall be made solely from the assets of the Partnership according to the terms of this Agreement.

(b) In carrying out its duties hereunder, the General Partner shall not be liable to the Partnership or to any other Partner for any actions taken in good faith and reasonably believed to be in the best interests of the Partnership, or for errors of judgment, but shall be liable only for fraud or gross negligence. The Limited Partners expressly acknowledge that the General Partner is acting on behalf of the Partnership, the General Partner and the General Partner’s shareholders collectively, and that the General Partner is under no obligation to consider the separate interests of the Limited Partners (including, without limitation, the tax consequences to Limited Partners) in deciding whether to cause the Partnership to take (or decline to take) any actions. In the event of a conflict between the interests of the shareholders of the General Partner on one hand and the Limited Partners on the other, the General Partner shall endeavor in good faith to resolve the conflict in a manner not adverse to either the shareholders of the General Partner or the Limited Partners; provided, however, that for so long as the General Partner has securities registered pursuant to Section 12 or Section 15 of the Exchange Act, any such conflict that cannot be resolved in a manner not adverse to either the shareholders of the General Partner or the Limited Partners shall be resolved in favor of the shareholders. The General Partner shall not be liable for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection with such decisions, provided that the General Partner has acted in good faith. Any amendment, modification or repeal of this Section 6.4 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the General Partner’s liability to the Partnership and the Limited Partners under this Section 6.4 as in effect immediately prior to such amendment, modification or repeal with respect to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when claims relating to such matters may arise or be asserted.

(c) The Partnership shall indemnify and defend an Indemnitee to the fullest extent permitted by law, and save and hold it harmless from and against, and in respect of, all: (i) fees, costs and expenses (including reasonable attorney fees) incurred in connection with or resulting from any claim, action or demand against any Indemnitee or the Partnership that arises out of or in any way relates to the Partnership, and (ii) claims, actions and demands arising out of or in any way related to the Partnership, and any losses or damages resulting from such claims, actions and demands, including, without limitation, reasonable costs and expenses of litigation and appeal and amounts paid in settlement or compromise of any such claim, action or demand; provided, however, that this indemnification shall not apply if: (A) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (B) the Indemnitee actually received an improper personal benefit in money, property or services; or (C) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful. The termination of any proceeding by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth in this Section 6.4(c). The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the Indemnitee acted in a manner contrary to that specified in this Section 6.4(c). Any indemnification pursuant to this Section 6.4 shall be made only out of the assets of the Partnership.

(d) The Partnership may reimburse an Indemnitee for reasonable expenses incurred by an Indemnitee who is a party to a proceeding in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in this Section 6.4 has been met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.

(e) The indemnification provided by this Section 6.4 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity.

(f) The Partnership may purchase and maintain insurance on behalf of the Indemnities, and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.

(g) For purposes of this Section 6.4, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by the Indemnitee of its duties to the Partnership also imposes duties on, or otherwise involves services by the Indemnitee, to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of this Section 6.4; and actions taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of its

duties for a purpose reasonably believed by the Indemnitee to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Partnership.

(h) In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.

(i) An Indemnitee shall not be denied indemnification in whole or in part under this Section 6.4 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

(j) The provisions of this Section 6.4 are for the benefit of the Indemnities, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other persons.

(k) Notwithstanding any other provisions of this Agreement or the Act, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is necessary or advisable in order (i) to protect the ability of the General Partner to continue to qualify as a REIT, or (ii) to prevent the General Partner from incurring any taxes under Section 857 or Section 4981 of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners. Further, any provision of this Agreement that might jeopardize the General Partner’s REIT status shall be (i) void and of no effect, or (ii) reformed, as necessary, to avoid the General Partner’s loss of REIT status, unless the Board of Trustees of the General Partner shall determine not to maintain the General Partner’s REIT status.

Section 6.5 Compensation of General Partner; Reimbursement . The General Partner, as such, shall not receive any compensation for services rendered to the Partnership. Notwithstanding the preceding sentence, the General Partner shall be entitled to its allocable share of the profits and distributable Cash Flow of the Partnership and shall be entitled, in accordance with the provisions of Section 6.7 below, to pay reasonable compensation to its Affiliates and other entities with which it may be associated for services performed. The General Partner shall be reimbursed on a monthly basis, or such other basis as the General Partner may determine in its sole and absolute discretion, for all REIT Expenses.

Section 6.6 Reliance on Act of General Partner . No financial institution or any other person, firm or corporation dealing with the General Partner or the Partnership shall be required to ascertain whether the General Partner is acting in accordance with this Agreement, but such financial institution or such other person, firm or corporation shall be protected in relying solely upon the assurance of and the execution of any instrument or instruments by the General Partner.

Section 6.7 Outside Services; Dealings with Affiliates; Outside Activities .

(a) Notwithstanding any provision of this Article VI to the contrary, the General Partner may employ such agents, accountants, attorneys and others as it shall deem

advisable, including its trustees, directors, officers, shareholders, and its Affiliates and entities with which the General Partner, any Limited Partner or their respective Affiliates may be associated, and may pay them reasonable compensation from Partnership funds for services performed, which compensation shall be reasonably believed by the General Partner to be comparable to and competitive with fees charged by unrelated Persons who render comparable services which could reasonably be made available to the Partnership. The General Partner shall not be liable for the neglect, omission or wrongdoing of any such Person so long as it was not grossly negligent in appointing such Person.

(b) The Partnership may lend or contribute to its Subsidiaries or other Persons in which it has an equity investment Partnership funds on terms and conditions established in the sole and absolute discretion of the General Partner. The foregoing authority shall not create any right or benefit in favor of any Subsidiary or any other Person.

(c) The Partnership may transfer assets to joint ventures, other partnerships, corporations or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions consistent with this Agreement and applicable law.

(d) Except as expressly permitted by this Agreement, neither the General Partner nor any of its Affiliates nor any Limited Partner shall sell, transfer or convey any property to, or purchase any property from, the Partnership, directly or indirectly, except pursuant to transactions that are on terms that are fair and reasonable to the Partnership.

(e) Subject to the Declaration of Trust, By-laws and any agreements entered into by the General Partner or its Affiliates with the Partnership or a Subsidiary, any officer, director, employee, agent, trustee, Affiliate or shareholder of the General Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities substantially similar or identical to those of the Partnership. Neither the Partnership nor any of the Limited Partners shall have any rights by virtue of this Agreement in any business ventures of such person.

(f) In the event the General Partner exercises its rights under its Declaration of Trust to redeem REIT Shares, then the General Partner shall cause the Partnership to purchase from it a number of Partnership Units as determined based on the application of the Exchange Factor on the same terms that the General Partner redeemed such REIT Shares.

Section 6.8 General Partner Participation . The General Partner agrees that all business activities of the General Partner, including activities pertaining to the acquisition, development and ownership of Properties, shall be conducted through the Partnership. Without the Consent of the Limited Partners, the General Partner shall not, directly or indirectly, participate in or otherwise acquire any interest in any real or personal property. The General Partner agrees that all borrowings for the purpose of making distributions to its shareholders will be incurred by the Partnership.

ARTICLE VII

RIGHTS , PROHIBITIONS AND REPRESENTATIONS

WITH RESPECT TO LIMITED PARTNERS

Section 7.1 Rights of Limited Partners .

(a) The Partnership may engage the Limited Partners or persons or firms associated with them for specific purposes and may otherwise deal with such Partners on terms and for compensation to be agreed upon by any such Partner and the Partnership.

(b) Each Limited Partner shall be entitled to have the Partnership books kept at the principal place of business of the Partnership and at all times, during reasonable business hours and at such Partner’s sole expense, shall be entitled to inspect and copy any of them and have on demand true and full information of all things affecting the Partnership and a formal accounting of Partnership affairs whenever circumstances render it just and reasonable.

(c) No Limited Partner shall be liable for any debts, liabilities, contracts or obligations of the Partnership. A Limited Partner shall be liable to the Partnership only to make payments of its Capital Contribution, if any, as and when due hereunder. After its Capital Contribution is fully paid, no Limited Partner shall, except as otherwise required by the Act, be required to make any further Capital Contributions or other payments or lend any funds to the Partnership.

Section 7.2 Prohibitions with Respect to the Limited Partners . No Limited Partner shall have the right:

(a) To take part in the control or management of the Partnership business, to transact business for or on behalf of the Partnership or to sign for or to bind the Partnership, such powers being vested solely in the General Partner as set forth herein;

(b) To have such Partner’s Capital Contributions repaid except to the extent provided in this Agreement;

(c) To require partition of Partnership property or to compel any sale or appraisement of Partnership assets or sale of a deceased Partner’s interests therein, notwithstanding any provisions of law to the contrary; or

(d) To sell or assign all or any portion of such Partner’s Limited Partnership Interest in the Partnership or to constitute the vendee or assignee thereunder a Substitute Limited Partner, except as provided in Article IX hereof.

Section 7.3 Ownership by Limited Partner of Corporate General Partner or Affiliate . No Limited Partner shall at any time, either directly or indirectly, own any shares or other interest in the General Partner or in any Affiliate thereof if such ownership by itself or in conjunction with other shares or other interests owned by other Limited Partners would, in the opinion of counsel for the Partnership, jeopardize the classification of the General Partner as a REIT for federal income tax purposes. The General Partner shall be entitled to make such

reasonable inquiry of the Limited Partners as is required to establish compliance by the Limited Partners with the provisions of this Section 7.3 and the Limited Partners shall promptly and fully respond to such inquiries.

Section 7.4 Grant of Redemption Rights .

(a) Each Class A Limited Partner shall have the right, but not the obligation (such rights hereinafter sometimes referred to as the “Redemption Rights”), to redeem all or a portion of the Partnership Units held by such Limited Partner (as a Class A Limited Partner) to the Partnership (or its designee) at any time or from time to time prior to the time the Partnership is dissolved, on the terms and subject to the conditions and restrictions contained in Exhibit D hereto. The Redemption Rights granted hereunder may be exercised by any one or more of such Limited Partners, on the terms and subject and to the conditions and restrictions contained in Exhibit D hereto, upon delivery to the General Partner of an Exercise Notice in the form of Schedule 1 attached to Exhibit D , which notice shall specify the Partnership Units to be redeemed by such Limited Partner. Once delivered, the Redemption Exercise Notice shall be irrevocable, subject to payment by the Partnership of the Purchase Price in respect of such Partnership Units in accordance with the terms hereof.

(b) The terms and provisions applicable to the Redemption Rights shall be as set forth in attached Exhibit D .

(c) Any Partnership Units acquired by the General Partner in accordance with Exhibit D hereto pursuant to an exercise by any Class A Limited Partner of the Redemption Rights shall be deemed to be acquired by and reallocated or reissued to the General Partner. The General Partner shall amend Exhibit A hereto to reflect each such conversion and reallocation or reissuance of Partnership Units and each corresponding recalculation of the Partnership Units of the Partners.

(d) No Class B Limited Partner shall be entitled to the Redemption Rights unless and until the Board of Trustees of the General Partner agrees to reclassify the Class B Limited Partner as a Class A Limited Partner.

Section 7.5 Warranties and Representations of the Limited Partners .

(a) Each Class A Limited Partner hereby warrants and represents to and for the benefit of the General Partner and the Partnership that such Limited Partner owns good, valid and marketable title to the ownership interests in the Property being contributed to the capital of the Partnership by such Limited Partner (the “Ownership Interests”) and that such Ownership Interests are free and clear of all mortgages, pledges, liens, security interests, encumbrances and restrictions of any nature whatsoever. Each Limited Partner further warrants and represents to and for the benefit of the General Partner and the Partnership that such Limited Partner has all necessary power and authority to transfer the Ownership Interests to the Partnership without the consent or authorization of, or notice to, any third party, except those third parties from whom such consents or authorizations have been obtained. Each Class A Limited Partner also represents and warrants to and for the benefit of the General Partner and the Partnership those matters set forth on Exhibit E hereto.

(b) Each Class B Limited Partner hereby warrants and represents to and for the benefit of the General Partner and the Partnership that such Limited Partner owns good, valid and marketable title to the interests in the property being contributed to the capital of the Partnership by such Limited Partner (the “Other Interests”) and that such Other Interests are free and clear of all mortgages, pledges, liens, security interests, encumbrances and restrictions of any nature whatsoever. Each Limited Partner further warrants and represents to and for the benefit of the General Partner and the Partnership that such Limited Partner has all necessary power and authority to transfer the Other Interests to the Partnership without the consent or authorization of, or notice to, any third party, except those third parties from whom such consents or authorizations have been obtained.

Section 7.6 Indemnification by Limited Partners . Each Limited Partner hereby agrees to indemnify and defend the General Partner and the Partnership and hold the General Partner, its shareholders, officers and trustees and the Partnership and its partners and each of their respective representatives, successors and assigns harmless from and against any and all claims, demands, losses, liabilities, damages and expenses (including reasonable attorneys’ fees) arising out of or in connection with (i) the inaccuracy of the warranties and representations made by such Limited Partner under Section 7.5 above, or (ii) the ownership of the Ownership Interests by such Limited Partner.

Section 7.7 Limited Partner Guarantees . Upon the request of the General Partner, or upon its own election, a Limited Partner (the “Initiating Limited Partner”) from time to time, may, but shall not be required to, guarantee or otherwise provide credit support for Partnership indebtedness as such Limited Partner may elect; provided, however, that the Limited Partner shall be entitled to take such action(s) only if the General Partner determines that any such action would not have a material adverse effect on the tax position of the General Partner. All Partners are entitled to notice of any such guarantee(s) or credit support, and shall have the right to provide guarantees or credit support on the same terms and conditions as the Initiating Limited Partner does, and all Limited Partners interested in providing such guarantee or credit support shall cooperate with the General Partner and each other in considering any guarantee or credit support proposal, and the General Partner will cooperate in permitting or obtaining any consents for such guarantees or credit support.

Section 7.8 No Sale of Property .

(a) Notwithstanding any other provision to the contrary, except Section 7.8(b) below, the Partnership agrees not to sell or exchange or offer for sale or exchange the Initial Property or any portion thereof during the ( ) year period following the date of this Agreement.

(b) The Partnership shall have the authority to enter into a like-kind exchange as defined in Section 1031 of the Code with respect to all or any portion of the Initial Property to the extent that such an exchange will not cause recognition of gain under Section 704(c) to any Class A Limited Partner with respect to the Initial Property. To the extent any property is received in a like-kind exchange as provided in this section, such property received will be considered to be the Initial Property.

ARTICLE VIII

DISTRIBUTIONS AND PAYMENTS TO PARTNERS

Section 8.1 Distributions of Cash Flow .

(a) The General Partner shall distribute on a quarterly basis such portion of the Cash Flow of the Partnership as the General Partner shall determine in its sole discretion. All such distributions of Cash Flow shall be made to Partners who are Partners on the Partnership Record Date in accordance with each Partner’s respective Percentage Interest on such Partnership Record Date.

(b) In no event may a Partner receive a distribution with respect to a Partnership Unit if such Partner is entitled to receive a distribution from the General Partner with respect to a REIT Share for which all or part of such Partnership Unit has been exchanged.

Section 8.2 REIT Distribution Requirements . Unless the General Partner determines that such a distribution would not be in the best interests of the Partnership, the Partnership shall make a distribution of Cash Flow for each fiscal year of the Partnership to enable the General Partner (i) to meet its distribution requirement for qualification as a REIT as set forth in Section 857(a)(1) of the Code, and (ii) to avoid the excise tax imposed by Section 4981 of the Code.

Section 8.3 No Right to Distributions in Kind . No Partner shall be entitled to demand property other than cash in connection with any distribution by the Partnership.

Section 8.4 Disposition Proceeds . Disposition Proceeds shall be distributed to the Partners at such time as the General Partner may determine in accordance with each Partner’s respective Percentage Interest on such Partnership Record Date.

Section 8.5 Withdrawals . No Partner shall be entitled to make withdrawals from its Capital Account except as provided herein.

Section 8.6 Amounts Withheld . All amounts withheld pursuant to the Code or any provision of any state or local tax law with respect to any payment distribution, or allocations to the Partnership, the General Partner, or the Limited Partners shall be treated as amounts distributed to the General Partner and the Limited Partners pursuant to this Article VIII for all purposes under this Agreement. The General Partner is authorized to withhold from distributions, or with respect to allocations, to the General Partner and Limited Partners and to pay over to any federal, state, or local government any amounts required to be so withheld pursuant to the Code or any provisions of any other federal, state, or local law and shall allocate such amounts to the General Partner and Limited Partners with respect to which such amount was withheld.

ARTICLE IX

TRANSFERS OF INTERESTS

Section 9.1 General Partner . The General Partner shall not withdraw from the Partnership and shall not sell, assign, pledge, encumber or otherwise transfer all or any portion of

its interest in the Partnership. In the event the General Partner withdraws from the Partnership, in violation of this Agreement or otherwise, or dissolves, terminates or upon an Event of Bankruptcy of the General Partner, then the Partnership shall be dissolved and terminated unless a Majority-In-Interest of the Limited Partners elect to continue the Partnership business by selecting a substitute general partner.

Section 9.2 Admission of a Substitute or Additional General Partner . A Person shall be admitted as a Substitute or Additional General Partner of the Partnership only if the transaction giving rise to such substitution or admission is otherwise permitted under this Agreement and the following terms and conditions are satisfied:

(a) the Person to be admitted as a Substitute or Additional General Partner shall have accepted and agreed to be bound by all the terms and provisions of this Agreement by executing a counterpart thereof and such other documents or instruments as may be required or appropriate in order to effect the admission of such Person as a General Partner, and a certificate evidencing the admission of such Person as a General Partner shall have been filed for recordation and all other actions required by the Act in connection with such admission shall have been performed;

(b) if the Person to be admitted as a Substitute or Additional General Partner is a corporation or a partnership, it shall have provided the Partnership with evidence satisfactory to counsel for the Partnership of such Person’s authority to become a General Partner and to be bound by the terms and provisions of this Agreement; and

(c) counsel for the Partnership shall have rendered an opinion (relying on such opinions from counsel in the state or any other jurisdiction as may be necessary) that the admission of the Person to be admitted as a Substitute or Additional General Partner is in conformity with the Act and that none of the actions taken in connection with the admission of such Person as a Substitute or Additional General Partner will cause the termination of the Partnership under Section 708 of the Code or will result in the loss of any Limited Partner’s limited liability status.

Section 9.3 Effect of Bankruptcy, Withdrawal or Dissolution of a General Partner .

(a) Upon the occurrence of an Event of Bankruptcy as to a General Partner or the withdrawal, removal or dissolution of a General Partner (except that, if a General Partner is on the date of such occurrence a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to or removal of a partner in such partnership shall be deemed not to be a dissolution of such General Partner if the business of such General Partner is continued within ninety (90) days by the remaining general partners or all remaining members of such partnership), the Partnership shall be dissolved and terminated unless the Partnership is continued pursuant to Section 9.3(b).

(b) Following the occurrence of an Event of Bankruptcy as to a General Partner or the withdrawal, removal or dissolution of a General Partner (except that, if a General Partner is on the date of such occurrence a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to or removal of a partner in such partnership shall be deemed not be a

dissolution of such General Partner if the business of such General Partner is continued within ninety (90) days by the remaining general partners or all remaining members of such partnership), persons holding at least a majority of the Limited Partnership Interests, within ninety (90) days after such occurrence, may elect to continue the business of the Partnership for the balance of the term specified in Section 3.2 by selecting, subject to Section 9.2 and any other provisions of this Agreement, a Substitute General Partner. If the Limited Partners elect to reconstitute the Partnership and admit a Substitute General Partner, the relationship between the Partners and any Person who has acquired an interest of a Partner in the Partnership shall be governed by this Agreement.

Section 9.4 Removal of a General Partner .

(a) Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of, a General Partner, such General Partner shall be deemed to be removed automatically; provided, however, that if a General Partner is on the date of such occurrence a partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to or removal of a partner in such partnership shall be deemed not to be a dissolution of the General Partner if the business of such General Partner is continued within ninety (90) days by the remaining general partners or all remaining members of such Partnership.

(b) If a General Partner has been removed pursuant to this Section 9.4 and the Partnership is not continued pursuant to Section 9.3(b), the Partnership shall be dissolved.

Section 9.5 Restrictions on Transfer of Limited Partnership Interests .

(a) Except as otherwise provided in this Article IX, no Limited Partner may offer, sell, assign, hypothecate, pledge or otherwise transfer its Limited Partnership Interest, in whole or in part, whether voluntarily or by operation of law or at judicial sale or otherwise (collectively, a “Transfer”), without the written consent of the General Partner, which consent may be withheld in the sole and absolute discretion of the General Partner. The General Partner may require, as a condition of any Transfer, that the transferor assume all costs incurred by the Partnership in connection therewith.

(b) No Limited Partner may effect a Transfer of its Limited Partnership Interest if, in the opinion of legal counsel for the Partnership, such proposed Transfer would require the registration of the Limited Partnership Interest under the Securities Act of 1933, as amended, or would otherwise violate any applicable federal or state securities or “Blue Sky” law (including investment suitability standards).

(c) No Transfer by a Limited Partner of its Partnership Interest may be made to any Person if (i) in the opinion of legal counsel for the Partnership, the Transfer would result in the Partnership’s being treated as an association taxable as a corporation (other than a qualified REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) such transfer is effectuated through an “established securities market” or a “secondary market” (or the substantial equivalent thereof) within the meaning of Section 7704 of the Code, or (iii) the Transfer would create a risk that the General Partner would not be taxed as a REIT for federal income tax purposes.

(d) Section 9.5(a) shall not prevent any donative Transfer by an individual Limited Partner to his immediate family members or any trust in which the individual or his immediate family members own, collectively, one hundred percent (100%) of the beneficial interests, provided that the transferor assumes all costs of the Partnership in connection therewith and any such transferee shall not have the rights of a Substitute Limited Partner (unless and until admitted as a Substitute Limited Partner pursuant to this Section 9.5 and Section 9.6 of this Agreement).

(e) Any Transfer in contravention of any of the provisions of this Article IX shall be void and ineffectual and shall not be binding upon, or recognized by, the Partnership.

Section 9.6 Admission of Substitute Limited Partner .

(a) Subject to the other provisions of this Article IX (including, without limitation, the provisions of Section 9.5(a) regarding consent of the General Partner), an assignee of the Limited Partnership Interest of a Limited Partner (including, without limitation, any purchaser, transferee, donee, or other recipient of any disposition of such Limited Partnership Interest) shall be deemed admitted as a Limited Partner of the Partnership only upon the satisfactory completion of the following:

(i) the assignee shall have accepted and agreed to be bound by the terms and provisions of this Agreement by executing a counterpart or an amendment thereof, including a revised Exhibit A , and such other documents or instruments as the General Partner may require in order to effect the admission of such Person as a Limited Partner;

(ii) to the extent required, an amended certificate of limited partnership evidencing the admission of such Person as a Limited Partner shall have been signed, acknowledged and filed for record in accordance with the Act;

(iii) the assignee shall have delivered a letter containing the representations and warranties and agreements set forth in Section 9.12;

(iv) if the assignee is a corporation, partnership or trust, the assignee shall have provided the General Partner with evidence satisfactory to counsel for the Partnership of the assignee’s authority to become a Limited Partner under the terms and provisions of this Agreement;

(v) the assignee shall have executed a power of attorney containing the terms and provisions set forth in Article XII; and

(vi) the assignee shall have paid all reasonable legal fees of the Partnership and the General Partner and all filing and publication costs incurred in connection with its substitution as a Limited Partner.

(b) For the purpose of allocating profits and losses and distributing cash received by the Partnership, a Substitute Limited Partner shall be treated as having become, and appearing in the records of the Partnership as, a Partner upon the filing of the certificate described in Section 9.6(a)(ii) or, if no such filing is required, the later of the date specified in the transfer documents, or the date on which the General Partner has received all necessary instruments of transfer and substitution.

(c) The General Partner shall cooperate with the Person seeking to become a Substitute Limited Partner by preparing the documentation required by this Section and making all official filings and publications. The Partnership shall take all such action as promptly as practicable after the satisfaction of the conditions in this Article IX to effectuate the admission of such Person as a Limited Partner of the Partnership.

Section 9.7 Rights of Assignees of Partnership Interests .

(a) Subject to the provisions of Sections 9.5 and 9.6 hereof, except as required by operation of law, the Partnership shall not be obligated for any purposes whatsoever to recognize the assignment by any Limited Partner of his Partnership Interest until the Partnership has received notice thereof.

(b) Any Person who is the assignee of all or any portion of a Limited Partner’s Limited Partnership Interest, but does not become a Substitute Limited Partner and desires to make a further assignment of such Limited Partnership Interest, shall be subject to all the provisions of this Article IX to the same extent and in the same manner as any Limited Partner desiring to make an assignment of its Limited Partnership Interest.

Section 9.8 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner . The occurrence of an Event of Bankruptcy as to a Limited Partner, the death of a Limited Partner or a final adjudication that a Limited Partner is incompetent (which term shall include, but not be limited to, insanity) shall not cause the termination or dissolution of the Partnership, and the business of the Partnership shall continue. If an order for relief in a bankruptcy proceeding is entered against an individual Limited Partner, the trustee or receiver of his estate or, if he dies, his executor, administrator or trustee, or, if he is finally adjudicated incompetent, his committee, guardian or conservator, shall have the rights of such Limited Partner for the purpose of settling or managing his estate property and such power as the bankrupt, deceased or incompetent Limited Partner possessed to assign all or any part of his Partnership Interest and to join with the assignee in satisfying conditions precedent to the admission of the assignee as a Substitute Limited Partner.

Section 9.9 Joint Ownership of Interests . A Partnership Interest may be acquired by two (2) individuals as joint tenants with right of survivorship (but not as tenants in common), provided that such individuals either are married or are related. The written consent or vote of both owners of any such jointly held Partnership Interest shall be required to constitute the action of the owners of such Partnership Interest; provided, however, that the written consent of only one (1) joint owner will be required if the Partnership has been provided with evidence satisfactory to counsel for the Partnership that the actions of a single joint owner can bind both owners under the applicable laws of the state of residence of such joint owners. Upon the death

of one (1) owner of a Partnership Interest held in a joint tenancy with a right of survivorship, the Partnership Interest shall become owned solely by the survivor as a Limited Partner and not as an assignee. The Partnership need not recognize the death of one (1) of the owners of a jointly held Partnership Interest until it shall have received notice of such death. Upon notice to the General Partner from either owner prior to the death of either owner, the General Partner shall cause the Partnership Interest to be divided into two (2) equal Partnership Interests, which shall thereafter be owned separately by each of the former owners.

Section 9.10 Transferees . Any Partnership Interests owned by the Partners and transferred pursuant to this Article IX shall be and remain subject to all of the provisions of this Agreement.

Section 9.11 Absolute Restriction . Notwithstanding any provision of this Agreement to the contrary, the sale or exchange of any interest in the Partnership will not be permitted if the interest sought to be sold or exchanged, when added to the total of all other interests sold or exchanged within the period of twelve (12) consecutive months ending with the proposed date of the sale or exchange, would result in the termination of the Partnership under Section 708 of the Code, if such termination would materially and adversely affect the Partnership or any Partner.

Section 9.12 Investment Representation . Each Limited Partner hereby represents and warrants to the General Partner and to the Partnership that the acquisition of his Partnership Interest is made as a principal for his account for investment purposes only and not with a view to the resale or distribution of such Partnership Interest. Each Limited Partner agrees that he will not sell, assign or otherwise transfer his Partnership Interest or any fraction thereof, whether voluntarily or by operation of law or at judicial sale or otherwise, to any Person who does not similarly represent and warrant and similarly agree not to sell, assign or transfer such Partnership Interest or fraction thereof to any Person who does not similarly represent, warrant and agree.

ARTICLE X

TERMINATION OF THE PARTNERSHIP

Section 10.1 Termination . The Partnership shall be dissolved upon (i) an Event of Bankruptcy as to the General Partner or the dissolution or withdrawal of the General Partner unless the Limited Partners elect to reconstitute the partnership in accordance with Article IX, (ii) ninety (90) days following the sale of all or substantially all of the Partnership’s assets (provided that if the Partnership receives an installment obligation as consideration for such sale or other disposition, the Partnership shall continue, unless sooner dissolved under the provisions of this Agreement, until such time as such note or notes are paid in full), (iii) the expiration of the term specified in Section 3.2, if any, (iv) the redemption of all Limited Partnership Interests (other than any of such interests held by the General Partner), or (v) the election by the General Partner (but only in accordance with and as permitted by applicable law) that the Partnership should be dissolved. Upon dissolution of the Partnership (unless the business of the Partnership is continued as set forth above), the General Partner (or its trustee, receiver, successor or legal representative) shall proceed with the winding up of the Partnership, and its assets shall be applied and distributed as herein provided.

Section 10.2 Payment of Debts . The assets shall first be applied to the payment of the liabilities of the Partnership (other than any loans or advances that may have been made by Partners to the Partnership) and the expenses of liquidation. A reasonable time shall be allowed for the orderly liquidation of the assets of the Partnership and the discharge of liabilities to creditors so as to enable the General Partner to minimize any losses resulting from liquidation.

Section 10.3 Debts to Partners . The remaining assets shall next be applied to the repayment of any loans made by any Partner to the Partnership.

Section 10.4 Remaining Distribution . The remaining assets shall then be distributed to the Partners in accordance with the Partners’ positive Capital Account balances, after making the adjustments for allocations under Article V hereof.

Section 10.5 Reserve . Notwithstanding the provisions of Sections 10.3 and 10.4, the General Partner may retain such amount as it deems necessary as a reserve for any contingent liabilities or obligations of the Partnership, which reserve, after the passage of a reasonable period of time, shall be distributed pursuant to the provisions of this Article X.

Section 10.6 Final Accounting . Each of the Partners shall be furnished with a statement examined by the Partnership’s independent accountants, which shall set forth the assets and liabilities of the Partnership as of the date of the complete liquidation. Upon the compliance by the General Partner with the foregoing distribution plan, the Limited Partners shall cease to be such, and the General Partner, as the sole remaining Partner of the Partnership, shall execute and cause to be filed a Certificate of Cancellation of the Partnership and any and all other documents necessary with respect to termination and cancellation of the Partnership.

ARTICLE XI

AMENDMENTS

Section 11.1 Authority to Amend .

(a) This Agreement may be amended by the General Partner without the approval of any other Partner if such amendment is solely for the purpose of clarification and does not change the substance hereof and the Partnership has obtained an opinion of counsel to that effect.

(b) This Agreement may be amended by the General Partner without the approval of any other Partner if such amendment is for the purpose of adding or substituting Limited Partners.

(c) This Agreement may be amended by the General Partner without the approval of any other Partner if such amendment is, in the opinion of counsel for the Partnership, necessary or appropriate to satisfy requirements of the Code with respect to partnerships or REITs or of any federal or state securities laws or regulations. Any amendment made pursuant to this Section 11.1(c) may be made effective as of the date of this Agreement.

(d) Notwithstanding any contrary provision of this Agreement, any amendment to this Agreement or other act which would (i) adversely affect the limited liability of the Limited Partners, (ii) change the method of allocation of Profits and Losses as provided in Article V or the distribution provisions of Articles VIII or X hereof, or (iii) seek to impose an obligation for additional contributions by the Limited Partners shall require the consent and approval of Limited Partners holding more than 65% of the Percentage Interests of the Limited Partners. Notwithstanding any contrary provision of this Agreement, any amendment to this Agreement that would affect the operation of the Redemption Rights set forth in Section 7.4 hereof shall require the consent and approval of Class A Limited Partners holding more than sixty-five percent (65%) of the Percentage Interests of the Class A Limited Partners.

(e) Except as otherwise specifically provided in this Section 11.1, amendments to this Agreement shall require the approval of the General Partner and Majority-in-Interest of the Limited Partners.

Section 11.2 Notice of Amendments . A copy of any amendment to be approved by the Partners pursuant to Sections 11.1(d) or 11.1(e) shall be mailed in advance to such Partners. Partners shall be notified as to the substance of any amendment pursuant to Sections 11.1(a), (b) or (c), and upon request shall be furnished a copy thereof.

ARTICLE XII

POWER OF ATTORNEY

Section 12.1 Power . Each of the Limited Partners irrevocably constitutes and appoints the General Partner as such Limited Partner’s true and lawful attorney in such Limited Partner’s name, place and stead to make, execute, swear to, acknowledge, deliver and file:

(a) Any certificates or other instruments which may be required to be filed by the Partnership under the laws of the State of Delaware or of any other state or jurisdiction in which the General Partner shall deem it advisable to file;

(b) Any documents, certificates or other instruments, including, but not limited to, any and all amendments and modifications of this Agreement or of the instruments described in Section 12.1(a) which may be required or deemed desirable by the General Partner to effectuate the provisions of any part of this Agreement and, by way of extension and not in limitation, to do all such other things as shall be necessary to continue and to carry on the business of the Partnership; and

(c) All documents, certificates or other instruments which may be required to effectuate the dissolution and termination of the Partnership, to the extent such dissolution and termination is authorized hereby. The power of attorney granted hereby shall not constitute a waiver of, or be used to avoid, the rights of the Partners to approve certain amendments to this Agreement pursuant to Sections 11.1 (d) and 11.1 (e) or be used in any other manner inconsistent with the status of the Partnership as a limited partnership or inconsistent with the provisions of this Agreement.

Section 12.2 Survival of Power . It is expressly intended by each of the Partners that the foregoing power of attorney is coupled with an interest, is irrevocable and shall survive the death, incompetence, dissolution, liquidation or adjudication of insanity or bankruptcy or insolvency of each such Partner. The foregoing power of attorney shall survive the delivery of an assignment by any of the Partners of such Partner’s entire interest in the Partnership, except that where an assignee of such entire interest has become a substitute Limited Partner, then the foregoing power of attorney of the assignor Partner shall survive the delivery of such assignment for the sole purpose of enabling the General Partner to execute, acknowledge and file any and all instruments necessary to effectuate such substitution.

ARTICLE XIII

CONSENTS , APPROVALS, VOTING AND MEETINGS

Section 13.1 Method of Giving Consent or Approval . Any consent or approval required by this Agreement may be given as follows:

(a) by a written consent given by the consenting Partner and received by the General Partner at or prior to the doing of the act or thing for which the consent is solicited, provided that such consent shall not have been nullified by:

(i) Notice to the General Partner of such nullification by the consenting Partner prior to the doing of any act or thing, the doing of which is not subject to approval at a meeting called pursuant to Section 13.2, or

(ii) Notice to the General Partner of such nullification by the consenting Partner prior to the time of any meeting called pursuant to Section 13.2 to consider the doing of such act or thing, or

(iii) The negative vote by such consenting Partner at any meeting called pursuant to Section 13.2 to consider the doing of such act or thing;

(b) by the affirmative vote by the consenting Partner to the doing of the act or thing for which the consent is solicited at any meeting called pursuant to Section 13.2 to consider the doing of such act or thing; or

(c) by the failure of the Partner to respond or object to a request from the General Partner for such Partner’s consent within thirty (30) days from its receipt of such request (or such shorter period of time as the General Partner may indicate in such request in order to ensure that the General Partner has sufficient time to respond, if required, to any third party with respect to the subject matter of such request).

Section 13.2 Meetings of Limited Partners . Any matter requiring the consent or vote of all or any of the Partners may be considered at a meeting of the Partners held not less than five (5) nor more than sixty (60) days after notice thereof shall have been given by the General Partner to all Partners. Such notice (i) may be given by the General Partner, in its discretion, at any time, or (ii) shall be given by the General Partner within fifteen (15) days after receipt from

Limited Partners holding more than fifty percent (50%) of the Percentage Interests of the Limited Partners of a request for such meeting.

Section 13.3 Opinion . Except for Consents obtained pursuant to Sections 13.1 or 13.2, no Limited Partner shall exercise any consent or voting rights unless either (a) at the time of the giving of consent or casting of any vote by the Partners hereunder, counsel for the Partnership or counsel employed by the Limited Partners (and reasonably satisfactory to the General Partner) shall have delivered to the Partnership an opinion satisfactory to the Partners to the effect that such conduct (i) is permitted by the Act, (ii) will not impair the limited liability of the Limited Partners, and (iii) will not adversely affect the classification of the Partnership as a partnership for federal income tax purposes, or (b) irrespective of the delivery or nondelivery of such opinion of counsel, Limited Partners holding more than seventy-five percent (75%) of the Percentage Interests of the Limited Partners determine to exercise their consent and/or voting rights.

Section 13.4 Submissions to Partners . The General Partner shall give the Partners notice of any proposal or other matter required by any provision of this Agreement, or by law, to be submitted for consideration and approval of the Partners. Such notice shall include any information required by the relevant provision or by law.

ARTICLE XIV

MISCELLANEOUS

Section 14.1 Governing Law . The Partnership and this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

Section 14.2 Agreement for Further Execution . At any time or times upon the request of the General Partner, the Limited Partners hereby agree to sign, swear to, acknowledge and deliver all further documents and certificates required by the laws of Delaware, or any other jurisdiction in which the Partnership does, or proposes to do, business, or which may be reasonable, necessary, appropriate or desirable to carry out the provisions of this Agreement or the Act. This Section 14.2 shall not prejudice or affect the rights of the Limited Partners to approve certain amendments to this Agreement pursuant to Sections 11.1(d) and 11.1(e).

Section 14.3 Entire Agreement . This Agreement and the exhibits attached hereto contain the entire understanding among the parties and supersede any prior understandings or agreements among them respecting the within subject matter. There are no representations, agreements, arrangements or understandings, oral or written, between or among the parties hereto relating to the subject matter of this Agreement which are not fully expressed herein.

Section 14.4 Severability . This Agreement is intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations of the jurisdictions in which the Partnership does business. If any provision of this Agreement, or the application thereof to any person or circumstance, shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent permitted by law.

Section 14.5 Notices . Notices to Partners or to the Partnership shall be deemed to have been given when personally delivered or mailed, by prepaid registered or certified mail, addressed as set forth in Exhibit A attached hereto, unless a notice of change of address has previously been given in writing by the addressee to the addressor, in which case such notice shall be addressed to the address set forth in such notice of change of address.

Section 14.6 Mediation/Arbitration of Disputes . None of the parties (including any Partner and the Partnership) shall institute a proceeding in any court or administrative agency to resolve a dispute between the parties before that party has sought to resolve the dispute through direct negotiation with the other party. If the dispute is not resolved within three weeks after a demand for direct negotiation, the parties shall attempt to resolve the dispute through mediation. If the parties do not promptly agree on a mediator, either party may request the Court of Common Pleas of Cuyahoga County, Ohio, to appoint a mediator certified by the Supreme Court of Ohio. The fees and expenses of the mediator shall be paid equally by each party. If the mediator is unable to facilitate a settlement of the dispute within a reasonable period of time, as determined by the mediator, the mediator shall issue a written statement to the parties to that effect and the aggrieved party may then seek relief through arbitration in Cleveland, Ohio, administered by the American Arbitration Association, under its commercial arbitration rules and its supplementary procedures for larger, complex disputes, provided that persons eligible to be selected as arbitrators shall be limited to attorneys-at-law who (i) are on the AAA’s Large Complex Case panel and (ii) who have practiced law for at least 15 years specializing in either general commercial litigation or general corporate and commercial matters. The arbitrators shall base their award on applicable laws and judicial precedent and include in such award a statement of the reasons upon which the award is based. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof and shall be final, binding and non-appealable. The obligation herein to mediate and/or arbitrate shall not prevent any party from seeking temporary restraining orders, preliminary injunctions or other procedures in a court of competent jurisdiction to obtain interim relief when deemed necessary by such court to preserve the status quo or prevent irreparable injury pending resolution by arbitration of the actual dispute.

Section 14.7 Titles and Captions . All titles and captions are for convenience only, do not form a substantive part of this Agreement, and shall not restrict or enlarge any substantive provisions of this Agreement.

Section 14.8 Counterparts . This Agreement may be executed in multiple counterparts, each one of which shall constitute an original executed copy of this Agreement.

Section 14.9 Pronouns . All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons may require.

Section 14.10 Survival of Rights . Subject to the provisions hereof limiting transfers, this Agreement shall be binding upon and inure to the benefit of the Partners and the Partnership and their respective legal representatives, successors, transferees and assigns.

Section 14.11 Personal Liability . As provided in the Articles of Incorporation establishing the General Partner, no trustee, officer, shareholder, employee or agent of the General Partner shall be held to any personal liability, jointly or severally, for any obligation of, or claim against, the General Partner.

IN WITNESS WHEREOF, the parties have hereunto set their hands as of the day and year first above written.

	GENERAL PARTNER:

	STONEHAVEN REALTY TRUST
	a Maryland real investment trust

	By:
		LIMITED PARTNERS:
		(See attached limited partner signature pages)

LIMITED PARTNERSHIP SIGNATURE PAGE

The undersigned, desiring to become a Limited Partner of Paragon Real Estate, L.P., hereby agrees to all of the terms of the Agreement of Limited Partnership of Paragon Real Estate, L.P. and agrees to be bound by the terms and provisions thereof.

Executed by the undersigned as a Class A Limited Partner of Paragon Real Estate, L.P.

LIMITED PARTNER:




(Residence Street Address)


(City, State, Zip Code)


(Taxpayer Identification or Social Security Number)

EXHIBIT A

LIST OF PARTNERS

PARTNERS	AGREED VALUE OF CAPITAL PARTNERSHIP CONTRIBUTION	PERCENTAGE INTEREST		UNITS
GENERAL PARTNER Stonehaven Realty Trust	$		%

CLASS A LIMITED PARTNERS	$		%

CLASS B LIMITED PARTNERS	$		%

TOTAL	$		%

EXHIBIT B

FEDERAL INCOME TAX MATTERS

For purposes of interpreting and implementing Article V of the Partnership Agreement, the following rules shall apply and shall be treated as part of the terms of the Partnership Agreement:

A. Special Allocation Provisions.

1. For purposes of determining the amount of gain or loss to be allocated pursuant to Article V of the Partnership Agreement, any basis adjustments permitted pursuant to Section 743 of the Code shall be disregarded.

2. When Partnership Interests are transferred during any taxable year, the General Partner intends to allocate Partnership Profits and Losses and other items of income, loss, deductions and credits using the closing of the books method.

3. Notwithstanding any other provision of the Partnership Agreement, to the extent required by law, income, gain, loss and deduction attributable to property contributed to the Partnership by a Partner shall be shared among the Partners so as to take into account any variation between the basis of the property and the fair market value of the property at the time of contribution in accordance with the requirements of Section 704(c) of the Code and the applicable regulations thereunder as more fully described in Part B hereof. Treasury regulations under Section 704(c) of the Code allow partnerships to use any reasonable method for accounting for Book-Tax Differences for contributions of property so that a contributing partner receives the tax benefits and burdens of any built-in gain or loss associated with contributed property. The Operating Partnership shall account for Book-Tax Differences using a method specifically approved in the regulations, the traditional method. An allocation of remaining built-in gain under Section 704(c) will be made when Section 704(c) property is sold.

4. Notwithstanding any other provision of the Partnership Agreement, in the event the Partnership is entitled to a deduction for interest imputed under any provision of the Code on any loan or advance from a Partner (whether such interest is currently deducted, capitalized or amortized), such deduction shall be allocated solely to such Partner.

5. Notwithstanding any provision of the Partnership Agreement to the contrary, to the extent any payments in the nature of fees made to a Partner or reimbursements of expenses to any Partner are finally determined by the Internal Revenue Service to be distributions to a Partner for federal income tax purposes, there will be a gross income allocation to such Partner in the amount of such distribution.

6. (a) Notwithstanding any provision of the Partnership Agreement to the contrary and subject to the exceptions set forth in Section 1.704-2(f)(2)-(5) of the Treasury Regulations, if there is a net decrease in Partnership Minimum Gain during any Partnership fiscal year, each Partner shall be specially allocated items of Partnership income and gain for such year

(and, if necessary, subsequent years) in an amount equal to such Partner’s share of the net decrease in Partnership Minimum Gain determined in accordance with Section 1.704-2(g)(2) of the Treasury Regulations. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Section 1.704-2(f) of the Treasury Regulations. This paragraph 6(a) is intended to comply with the minimum gain chargeback requirement in such Section of the Regulations and shall be interpreted consistently therewith. To the extent permitted by such Section of the Regulations and for purposes of this paragraph 6(a) only, each Partner’s Adjusted Capital Account Balance shall be determined prior to any other allocations pursuant to Article V of the Partnership Agreement with respect to such fiscal year and without regard to any net decrease in Partner Minimum Gain during such fiscal year.

(b) Notwithstanding any provision of the Partnership Agreement to the contrary, except paragraph 6(a) of this Exhibit and subject to the exceptions set forth in Section 1.704-2(i)(4) of the Treasury Regulations, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership fiscal year, each Partner who has a share of the Partner Nonrecourse Debt Minimum Gain, determined in accordance with Section 1.704-2(i)(3) of the Treasury Regulations, shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner’s share of the net decrease in Partner Nonrecourse Debt Minimum Gain, determined in accordance with Section 1.704-2(i)(5) of the Treasury Regulations. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Section 1.704-2(i)(4) of the Treasury Regulations. This paragraph 6(b) is intended to comply with the minimum gain chargeback requirement in such Section of the Treasury Regulations and shall be interpreted consistently therewith. Solely for purposes of this paragraph 6(b), each Partner’s Adjusted Capital Account Balance shall be determined prior to any other allocations pursuant to Article V of the Partnership Agreement with respect to such fiscal year, other than allocations pursuant to paragraph 6(a) hereof.

7. Notwithstanding any provision of the Partnership Agreement to the contrary, in the event any Partners unexpectedly receive any adjustments, allocations or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated to such Partners in an amount and manner sufficient to eliminate the deficits in their Adjusted Capital Account Balances created by such adjustments, allocations or distributions as quickly as possible.

8. No Losses shall be allocated to any Partner to the extent that such allocation would result in a deficit in its Adjusted Capital Account Balance while any other Partner continues to have a positive Adjusted Capital Account Balance; in such event, Losses shall first be allocated to any Partners with positive Adjusted Capital Account Balances, and in proportion to such balances, to the extent necessary to reduce their positive Adjusted Capital Account Balances to zero. Any excess shall be allocated to the General Partner. To the extent that any Losses are allocated pursuant to this paragraph, Profits shall thereafter be allocated in reverse order of such allocations of Losses to the extent of such Losses.

9. Any special allocations of items pursuant to this Part A shall be taken into account in computing subsequent allocations so that the net amount of any items so allocated and the Profits, Losses and all other items allocated to each such Partner pursuant to Article V of the Partnership Agreement shall, to the extent possible, be equal to the net amount that would have been allocated to each such Partner pursuant to the provisions of Article V of the Partnership Agreement if such special allocations had not occurred.

10. Notwithstanding any provision of the Partnership Agreement to the contrary, Nonrecourse Deductions for any fiscal year or other period shall be specially allocated to the Partners in the manner and in accordance with the percentages set forth in Section 5.2(d) of the Partnership Agreement.

11. Notwithstanding any provision of the Partnership Agreement to the contrary, any Partner Nonrecourse Deduction for any fiscal year or other period shall be specially allocated to the Partner who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with Section 1.704-2(i) of the Treasury Regulations.

12. The allocation of Profits and Losses to any Partner shall be deemed to be an allocation to that Partner of the same proportionate part of each separate item of taxable income, gain, loss, deduction or credit that comprises such Profits and Losses.

B. Capital Account Adjustments and 704(c) Tax Allocations.

1. For purposes of computing the amount of any item of income, gain, deduction or loss to be reflected in the Partners’ capital accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes; provided, however, that:

(a) Any income, gain or loss attributable to the taxable disposition of any property shall be determined by the Partnership as if the adjusted basis of such property as of such date of disposition was equal in amount to (i) the Agreed Value less book depreciation in the case of the Initial Properties or other contributed properties, or (ii) the Carrying Value with respect to property subsequently purchased.

(b) The computation of all items of income, gain, loss and deduction shall be made by the Partnership and, as to those items described in Section 705(a)(1)(B) or Section 705(a)(2)(B) of the Code, without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalizable for federal income tax purposes.

2. A transferee of a Partnership interest will succeed to the capital account relating to the Partnership interest transferred; provided, however, that if the transfer causes a termination of the Partnership under Section 708(b)(1)(B) of the Code, the Partnership properties shall be deemed to have been distributed in liquidation of the Partnership to the Partners (including the transferee of a Partnership interest) and recontributed by such Partners and

transferees in reconstitution of the Partnership. The capital accounts of such reconstituted Partnership shall be maintained in accordance with the principles set forth herein.

3. Upon an issuance of additional Partnership interests for cash, the capital accounts of all Partners (and the Agreed Values of all Partnership properties) shall, immediately prior to such issuance, be adjusted (consistent with the provisions hereof) upward or downward to reflect any unrealized gain or unrealized loss attributable to each Partnership property (as if such unrealized gain or unrealized loss had been recognized upon an actual sale of such property at the fair market value thereof, immediately prior to such issuance, and had been allocated to the Partners, at such time, pursuant to Article V of the Partnership Agreement). In determining such unrealized gain or unrealized loss attributable to the properties, the fair market value of Partnership properties shall be determined by the General Partner using such reasonable methods of valuation as it may adopt.

4. Immediately prior to the distribution of any Partnership property in liquidation of the Partnership, the capital accounts of all Partners shall be adjusted (consistent with the provisions hereof and Section 704 of the Code) upward or downward to reflect any unrealized gain or unrealized loss attributable to the Partnership property (as if such unrealized gain or unrealized loss had been recognized upon an actual sale of each such property, immediately prior to such distribution, and had been allocated to the Partners, at such time, pursuant to Article V of the Partnership Agreement). In determining such unrealized gain or unrealized loss attributable to property, the fair market value of Partnership property shall be determined by the General Partner using such reasonable methods of valuation as it may adopt.

5. In accordance with Section 704(c) of the Code and the regulations thereunder, income, gain, loss and deduction with respect to any property shall, solely for tax purposes, and not for capital account purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership for federal income tax purposes.

6. In the event the Agreed Value of any Partnership asset is adjusted as described in paragraph 3 above, subsequent allocations of income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Agreed Value in the same manner as under Section 704(c) of the Code and the regulations thereunder.

7. Any elections or other decisions relating to such allocations shall be made by the General Partner in any manner that reasonably reflects the purpose and intention of this Agreement.

C. Definitions. For the purposes of this Exhibit, the following terms shall have the meanings indicated unless the context clearly indicates otherwise:

“Adjusted Capital Account Balance”: means the balance in the capital account of a Partner as of the end of the relevant fiscal year of the Partnership, after giving effect to the following: (i) credit to such capital account any amounts the Partner is obligated to restore, pursuant to the terms of this Agreement or otherwise, or is deemed obligated to

restore pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Treasury Regulations, and (ii) debit to such capital account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.

“Carrying Value”: means the adjusted basis of such property for federal income tax purposes as of the time of determination.

“Nonrecourse Deductions”: shall have the meaning set forth in Section 1.704-2(b)(1) of the Treasury Regulations. The amount of Nonrecourse Deductions for a Partnership fiscal year equals the excess, if any, of the net increase, if any, in the amount of Partnership Minimum Gain during that fiscal year over the aggregate amount of any distributions during that fiscal year of proceeds of a Nonrecourse Liability, that are allocable to an increase in Partnership Minimum Gain, determined according to the provisions of Section 1.704-2(c) of the Treasury Regulations.

“Nonrecourse Liability”: shall have the meaning set forth in Section 1.704-2(b)(3) of the Treasury Regulations.

“Partner Nonrecourse Debt Minimum Gain”: means an amount, with respect to each Partner Nonrecourse Debt, determined in accordance with Section 1.704-2(i) of the Treasury Regulations.

“Partner Nonrecourse Debt”: shall have the meaning set forth in Section 1.704-2(b)(4) of the Treasury Regulations.

“Partner Nonrecourse Deductions”: shall have the meaning set forth in Section 1.704-2(i)(2) of the Treasury Regulations. For any Partnership taxable year, the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt equal the net increase during the year, if any, in the amount of Partner Nonrecourse Debt Minimum Gain reduced (but not below zero) by proceeds of the liability that are both attributable to the liability and allocable to an increase in the Partner Nonrecourse Debt Minimum Gain.

“Partnership Agreement”: shall mean this Agreement of Limited Partnership Agreement of Paragon Real Estate, L.P.

“Partnership Minimum Gain”: shall have the meaning set forth in Sections 1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations.

For purposes of this Exhibit, all other capitalized terms will have the same definition as in the Partnership Agreement.

EXHIBIT C

INITIAL PROPERTY

LOCATION	YEAR BUILT/ EXPANDED	RENTABLE SQUARE FT.	ACRES	UNITS	CONSTRUCTION

Total/Average

EXHIBIT D

REDEMPTION RIGHTS TERMS

The Redemption Rights granted by the Partnership to the Class A Limited Partners pursuant to Section 7.4 hereof shall be subject to the following terms and conditions:

1. Definitions . The following terms and phrases shall, for purposes of this Exhibit D and the Agreement, have the meanings set forth below:

“Cash Purchase Price” shall have the meaning set forth in Paragraph 4 hereof.

“Computation Date” shall mean the date on which an Redemption Exercise Notice is delivered to the General Partner.

“Exchange Factor” shall mean 100%, provided that such factor shall be adjusted in accordance with the Antidilution Provisions of Paragraph 7 hereof.

“Exercising Partner” shall have the meaning set forth in Paragraph 2 hereof.

“Offered Partnership Units” shall mean the Partnership Units of the Exercising Partner(s) identified in a Redemption Exercise Notice which, pursuant to the exercise of Redemption Rights, can be redeemed by the Partnership or acquired by the General Partner under the terms hereof.

“Purchase Price” shall mean the Cash Purchase Price or the Stock Purchase Price, or a combination thereof.

“Redemption Date” shall mean the tenth (10th) Business Day after receipt by the General Partner of a Redemption Exercise Notice.

“Redemption Exercise Notice” shall have the meaning set forth in Paragraph 2 hereof.

“Redemption Rights” shall have the meaning set forth in Paragraph 2 hereof.

“Securities Act” shall mean the Securities Act of 1933, as amended, or any successor statute.

“Stock Purchase Price” shall have the meaning set forth in Paragraph 4 hereof.

2. Grant of Redemption Rights . Beginning four years from the date of this Agreement, each Class A Limited Partner shall have the right, but not the obligation (hereinafter such right sometimes referred to as the “Redemption Rights”), to require the Partnership to redeem on the Redemption Date, all or any portion of the Units held by such Limited Partner (as a Class A Limited Partner) at a redemption price equal to the Cash Purchase Price. The Redemption Rights of a Limited Partner may be exercised on one or more occasions by the Limited Partner. The Redemption Rights shall be exercised pursuant

to a written notice (the “Redemption Exercise Notice”) in the form set forth in Schedule 1 attached hereto. The Redemption Exercise Notice shall be given by the Partner who is exercising the Redemption Rights (“Exercising Partner”) to the General Partner. A Limited Partner may not exercise the Redemption Rights as to fewer Partnership Units than the number of such Partnership Units that is equal to the lesser of (a) Partnership Units or (b) all of the Units held by such Class A Limited Partner (as a Class A Limited Partner). Neither the Electing Partner nor any assignee of any Limited Partner shall have any right with respect to any Partnership Units so redeemed to receive any distributions from the Partnership made after the Redemption Date. The assignee of any Limited Partner may exercise the rights of such Limited Partner pursuant to this Section 2, and such Limited Partner shall be deemed to have assigned such rights to such assignee and shall be bound by the exercise of such rights by such Limited Partner’s assignee. In connection with any exercise of such rights by such assignee on behalf of such Limited Partner, the Cash Purchase Price shall be paid by the Partnership directly to such assignee and not to such Limited Partner.

3. General Partner Exchange .

(a) Notwithstanding the provisions of Section 2, if a Limited Partner elects to exercise the Redemption Rights, the General Partner may, in its sole and absolute discretion, elect to assume directly and satisfy the Redemption Rights by paying to the Electing Partner either the Cash Purchase Price and/or the Stock Purchase Price for each Partnership Unit redeemed, as elected by the General Partner (in its sole and absolute discretion) on the Redemption Date, whereupon the General Partner shall acquire the Partnership Units offered for redemption by the Electing Partner and shall be treated for all purposes of this Agreement as the owner of such Partnership Interests.

(b) Unless the General Partner (in its sole and absolute discretion) shall exercise its right to assume directly and satisfy the Redemption Rights by paying to the Electing Partner either the Cash Purchase Price and/or the Stock Purchase Price for each Partnership Unit redeemed, the General Partner itself shall have no obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming Partner’s exercise of the Redemption Right.

(c) In the event that the General Partner satisfies the Redemption Rights in the manner described in Paragraphs 3(a) or (b), each of the Exercising Partner, the Partnership, and the General Partner shall treat the transaction between the General Partner and the Exercising Partner for federal income tax purposes as a sale of the Exercising Partner’s Partnership Units to the General Partner.

(d) Each Exercising Partner shall execute such documents as the General Partner may reasonably require in connection with the issuance of REIT Shares in the event that the General Partner satisfies the Redemption Rights in the manner described in Paragraphs 3(a).

(e) If the Redemption Rights are satisfied by the delivery of REIT Shares, the Exercising Partner shall be deemed to become a holder of REIT Shares as of the close of business on the closing date.

(f) Notwithstanding the provisions of Section 2 and this Section 3, a Limited Partner shall not be entitled to receive REIT Shares if the delivery of REIT Shares to such Partner on the Redemption Date by the General Partner pursuant to this Section 3 would be prohibited under the Declaration of Trust. The Cash Purchase Price shall be paid in such instance in accordance with the terms of Section 2.

4. Computation of Purchase Price/Form of Payment . The Cash Purchase Price shall mean an amount of cash equal to the product of (i) the number of shares of the REIT Shares that would be issued to the Exercising Partner if the Stock Purchase Price were paid for such Offered Partnership Units (taking into account the adjustments required pursuant to the definition of “Exchange Factor”) multiplied by (ii) the REIT Share Value computed as of the Computation Date. The Cash Purchase Price shall be paid in the form of cash, or cashier’s check, or by wire transfer to the Exercising Partner’s designated account. The Stock Purchase Price shall mean the number of REIT Shares equal to the product, expressed as a whole number, of (i) the number of Class A Units being exchanged, multiplied by (ii) the Exchange Factor.

5. Closing Deliveries . On the Redemption Date, payment of the Purchase Price shall be accompanied by proper instruments of transfer and assignment and by the delivery of (i) representations and warranties of (A) the Exercising Partner with respect to its due authority to sell all of the right, title and interest in and to such Offered Partnership Units and with respect to the status of the Offered Partnership Units being sold, free and clear of all liens, and (B) the Partnership or General Partner with respect to due authority for the purchase of such Offered Partnership Units, and (ii) to the extent that REIT Shares are issued in payment of the Stock Purchase Price, (A) an opinion of counsel for the General Partner reasonably satisfactory to the Exercising Partner(s), to the effect that such REIT Shares have been duly authorized, are validly issued, fully-paid and non-assessable, and have been duly registered under the Securities Act, and (B) a stock certificate or certificates evidencing the REIT Shares to be issued and registered in the name of the Exercising Partner(s) or its (their) designee.

6. Term of Rights . Unless sooner terminated, the rights of the parties with respect to the Redemption Rights shall commence as of the date hereof and lapse for all purposes and in all respects on the date that the Partnership is dissolved; provided, however, that the parties hereto shall continue to be bound by a Redemption Exercise Notice delivered to the General Partner prior to such date.

7. Antidilution Provisions .

(a) The Exchange Factor shall be subject to adjustment from time to time effective upon the occurrence of the following events and shall be expressed as a percentage, calculated to the nearest one-thousandth of one percent (.001%):

(i) In case the General Partner shall pay or make a dividend or other distribution on any class of shares of the General Partner in REIT Shares, the Exchange Factor in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be increased in proportion to the increase in outstanding REIT Shares resulting from such dividend or other distribution, such increase to

become effective immediately after the opening of business on the day following the record date fixed for such dividend or other distribution.

(ii) In case outstanding REIT Shares shall be subdivided into a greater number of shares, the Exchange Factor in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately increased, and, conversely, in case the outstanding REIT Shares shall be combined into a smaller number of shares, the Exchange Factor in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective.

(b) In case the General Partner shall issue rights, options or warrants to all holders of its REIT Shares entitling them to subscribe for or purchase REIT Shares at a price per share less than the current market price per share (as determined in the next sentence), each holder of a Partnership Unit shall be entitled to receive such number of rights or warrants, as the case may be, as he would have been entitled to receive had he exchanged his Partnership Units immediately prior to the record date for such issuance by the General Partner. For the purpose of any computation pursuant to the next sentence, the current market price per share of REIT Shares on any date shall be deemed to be the average of the daily closing prices for the five consecutive Trading Days selected by the General Partner commencing not more than twenty (20) Trading Days before, and ending not later than, the earlier of the day in question and the day before the “ex” date with respect to the issuance or distribution requiring such computation. For purposes of this Exhibit D, the term “Trading Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day which securities are not traded on such exchange or in such market and the term “‘ex’ date”, when used in respect of any issuance or distribution, shall mean the first date on which the shares trade regular way on such exchange or in such market without the right to receive such issuance or distribution.

(c) In case the REIT Shares shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification, or otherwise (other than subdivision or combination of shares or a stock dividend described in subparagraph (a)(ii) of this Paragraph) then and in each such event the Limited Partners shall have the right thereafter to exchange their Partnership Units for the kind and amount of shares and other securities and property which would have been received upon such reorganization, reclassification or other change by holders of the number of shares into which the Partnership Units might have been exchanged immediately prior to such reorganization, reclassification or change.

(d) The General Partner may, but shall not be required to, make such adjustments to the number of REIT Shares issuable upon exchange of a Partnership Unit, in addition to those required by this Paragraph 7, as the General Partner’s board of trustees considers to be advisable in order that any event treated for Federal income tax purposes as a dividend of stock or stock rights shall not be taxable to the recipients. The General Partner’s board of trustees shall have the power to resolve any ambiguity or correct any error in the

adjustments made pursuant to this Paragraph and its actions in so doing shall be final and conclusive.

8. Fractions of Shares. No fractional REIT Shares shall be issued upon exchange of Partnership Units. If more than one Partnership Unit shall be surrendered for exchange at one time by the same Exercising Partner, the number of full REIT Shares which shall be issuable upon exchange thereof (or the cash equivalent amount thereof if the Cash Purchase Price is paid) shall be computed on the basis of the aggregate amount of Partnership Units so surrendered. Instead of any fractional REIT Share which would otherwise be issuable upon exchange of any Partnership Unit or Partnership Units, the General Partner shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the Value of a REIT Share on the Redemption Date.

9. Notice of Adjustments of Exchange Factor . Whenever the Exchange Factor is adjusted as herein provided:

(a) the General Partner shall compute the adjusted Exchange Factor in accordance with Paragraph 7 hereof and shall prepare a certificate signed by the chief financial officer or the Treasurer of the General Partner setting forth the adjusted Exchange Factor and showing in reasonable detail the facts upon which such adjustment is based; and

(b) a notice stating that the Exchange Factor has been adjusted and setting forth the adjusted Exchange Factor shall forthwith be mailed by the General Partner to all holders of Redemption Rights at their last addresses on record under this Agreement.

SCHEDULE 1

REDEMPTION EXERCISE NOTICE

TO: STONEHAVEN REALTY TRUST

Reference is made to that certain Agreement of Limited Partnership, dated , 2003 (the “Partnership Agreement”), pursuant to which Stonehaven Realty Trust, a Maryland real estate investment trust, and certain other persons, including the undersigned, formed a Delaware limited partnership known as Limited Partnership (the “Partnership”). Capitalized terms used but not defined herein shall have the meanings set forth in the Partnership Agreement. Pursuant to Section 7.4 and Paragraph 2 of Exhibit D of the Partnership Agreement, each of the undersigned, being a Class A Limited Partner of the Partnership (an “Exercising Partner”), hereby elects to exercise its Redemption Rights as to the number of Offered Partnership Units specified opposite its name below:

Dated:

EXERCISING PARTNER	PARTNERSHIP UNITS	NUMBER OF OFFERED


EXERCISING PARTNER

EXHIBIT E

REPRESENTATIONS AND WARRANTIES OF WARRANTING PARTNERS

Each of (collectively, the “Warranting Partners”), jointly and severally, represents to the Partnership that, except as set forth on the Disclosure Schedule delivered to the General Partner in connection with the execution of this Agreement, as follows:

(a) Authorization; Binding Agreement . The execution, delivery and performance of this Agreement by each Warranting Partner has been duly and validly authorized by all necessary action of such Warranting Partner. This Agreement has been duly executed and delivered by each Warranting Partner and constitutes the legal, valid and binding obligation of such Warranting Partner, enforceable against such Warranting Partner in accordance with the terms hereof.

(b) Consents and Approvals . Except for those obtained prior to the date hereof, no consent, waiver, approval or authorization of, or filing, registration or qualification with or notice to, any governmental unit or any other person is required to be made, obtained or given by any of the Warranting Partners in connection with the execution, delivery and performance of this Agreement.

(c) No Violation . None of the execution, delivery or performance of this Agreement by any Warranting Partner does, or with the giving of notice, lapse of time or both, will (1) violate, conflict with or constitute a default under any term or condition of (A) the organizational documents of such Warranting Partner, or (B) any term or provision of any judgment, decree, order, statute, injunction, rule or regulation of a governmental unit applicable to such Warranting Partner, or (C) any agreement, instrument or document to which such Warranting Partner is a party or by which any of them is bound or to which their assets or properties is subject or bound or (2) result in the creation of any lien, claim, equity, security interest or other encumbrance (“Lien”) upon the Contributed Property of such Warranting Partner or the assets or properties of such Warranting Partner.

(d) Compliance with Laws . To the Warranting Partners’ best knowledge, the Initial Property is in compliance in all material respects with all private restrictions and laws, ordinances and regulations applicable to the conduct thereof and the ownership, use and operation thereof and has all licenses, permits and other governmental approvals for the conduct thereof, which licenses and permits are in full force and effect.

(e) Environmental Matters . To the Warranting Partners’ best knowledge, (1) the Initial Property is in compliance with all Environmental Laws (as hereinafter defined); (2) no notice has been received from any governmental or quasi-governmental authority or other person that the Initial Property is not or has not been in compliance with any Environmental Laws or that it has any material liability in respect thereof; and (3) there are no administrative, regulatory

or judicial proceedings pending or threatened against the Initial Property pursuant to, or alleging any violation of or liability under, any Environmental Laws. The term “Hazardous Materials” shall mean any substance, material, waste, gas or particulate matter which is regulated by any local governmental authority, the state in which the Initial Property is situated, or the United States Government, including but not limited to, any material or substance which is (i) defined as a “hazardous waste”, “hazardous material”, “hazardous substance”, “extremely hazardous waste” or “restricted hazardous waste” under any provision of law of the state in which the Initial Property is situated, (ii) petroleum or petroleum based, (iii) asbestos, (iv) polychlorinated biphenyl, (v) radioactive material, (vi) designed a “hazardous substance” pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1317), (vii) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conversation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903) or (viii) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601). The term “Environmental Laws” shall mean all statutes specifically described in the foregoing sentence and all federal, state and local environmental health and safety statutes, ordinances, codes, rules, regulations, orders and decrees regulating, relating to or imposing liability or standards concerning or in connection with Hazardous Materials.

(f) Ownership of Properties . Hampton Court Associates, L.P. (i) is the sole owner of the Initial Property and (ii) has good, valid and marketable title to such property, free and clear of all Liens other than Permitted Exceptions (as hereafter defined).

The term “Permitted Exceptions” shall mean in respect of real property or any interest or estate therein: (1) zoning laws and ordinances; (2) any deeds of trust or mortgages listed as exceptions to title in the most recent title commitments to insure title issued by relating to the Initial Property and delivered to the General Partner in connection with the execution of this Agreement (the “Title Commitments”); (3) any laws, ordinances, Liens, easements, rights of way, restrictions, exemptions, reservations, conditions, limitations, covenants, adverse rights or interests described as exceptions on Schedule B (or any other applicable Schedule) of the Title Commitments.

For the purposes of the representations and warranties made pursuant to this Exhibit E , a statement that a fact is true to “the Warranting Partner’s best knowledge” means that, after due investigation, none of the following Persons actually knows such statement to be untrue.

Exhibit 99

5620 Smetana Drive, Suite 130
Minneapolis, MN 55343
Tel: 952-935-9876
Fax: 952-935-5659

FOR IMMEDIATE RELEASE		FOR MORE INFORMATION

		Duane H. Lund
		Chief Executive Officer
		952.935.5411
		duane@stonehavenco.com
		www.stonehavenco.com

STONEHAVEN REALTY TRUST APPROVES
CORPORATE REPOSITIONING PLAN AND
EXPANDS ITS REAL ESTATE MANAGEMENT TEAM

Appoints four new trustees to its board and commences executive transition

Minneapolis – March 4, 2003 – Stonehaven Realty Trust (AMEX: RPP) announced today that the Board of Trustees unanimously approved and adopted a Corporate Repositioning Plan with Cleveland, Ohio based Paragon Real Estate Development, LLC, focused on implementing a national real estate acquisition, development, and re-development strategy. The new plan includes the contribution of real estate, and an improved capital stock structure, along with a new experienced management team and trustees, to execute the plan.

New members to the Board of Trustees

The Company appointed the following individuals to its Board of Trustees, effective March 4, 2003:

• Mr. James C. Mastandrea , former Chairman and CEO of First Union Real Estate Investments (NYSE: FUR), Cleveland, Ohio, appointed as Chairman of the Board .

• Mr. John J. Dee, former Senior Vice President and Chief Accounting Officer of First Union Real Estate Investments, (NYSE: FUR), Cleveland, Ohio, appointed as Trustee .

• Mr. Daniel G. DeVos, Chairman and CEO of DP Fox Enterprises; Director of Amway Corporation, Grand Rapids, Michigan; Director of Genmar Industries, Minneapolis, Minnesota; Director of Orlando Magic (NBA); and former Trustee of First Union Real Estate Investments (NYSE: FUR), appointed as Trustee .

• Michael T. Oliver, Director of Investments, Alaska State Pension Fund, Juneau, Alaska; former Chairman of Heitman/PRA Securities Advisors, Inc. and President of Heitman/PRA Real Estate Fund, appointed as Trustee .

New members to the Executive Management Team

The Company appointed the following individuals to its Executive Management Team, effective March 4, 2003 pursuant to two-year incentive based employment agreements with non-compete provisions:

• Mr. James C. Mastandrea , appointed as President

• Mr. John J. Dee , appointed as Senior Vice President

Messrs. Mastandrea and Dee are also entitled to receive additional shares of the Company’s capital stock pursuant to separate restricted share agreements and an additional contribution agreement. Company stock received under both of these agreements is restricted until the Company achieves growth in assets for the restricted share agreements, and increases in net operating income and funds from operations for the additional contribution agreement.

Background of Mr. James C. Mastandrea

In 1994, following a successful career in banking and real estate investment and development which began in 1971, James C. Mastandrea was appointed Chairman of the Board of Trustees and Chief Executive Officer of First Union Real Estate Investments (NYSE: FUR), a real estate investment trust (REIT) headquartered in Cleveland, Ohio. By initiating a strategic plan and assembling a highly motivated management team, Mastandrea substantially grew the assets of First Union from $495 million at the beginning of 1994 to $934 million at the end of 1997, with commensurate growth in net operating income and funds from operations. During Mastandrea’s tenure, First Union raised $175 million of capital from preferred and common share offerings, which was the first time in over 20 years that the REIT had offered new capital. The REIT also increased the size of its credit lines during this period and at the same time improved its credit ratings from both Moody’s and Duff & Phelps. The market recognized the efforts of Mastandrea and his management team with an increase in share price from a low of $6 1/8 in 1994 to a high of $16 5/16 in 1997. Also during that time, outstanding common shares increased from 18 million to 28 million shares plus an additional 7.6 million equivalent common shares from the convertible preferred shares

Corporate Headquarters and Name Change

Upon closing of the transactions contemplated by the Corporate Repositioning Plan, the Company intends to relocate its Corporate Headquarters to Cleveland, Ohio, and change its name to Paragon Real Estate Equity and Investment Trust.

Asset Contribution

Further in connection with the Corporate Repositioning Plan, Paragon intends to arrange for an affiliated entity, Hampton Court Associates, LP, to contribute, via an UPREIT structure, apartments located in Chicago, Illinois, at a contribution price of $3.9 million, including the assumption of debt. This initial contribution will provide a basis for additional asset contributions, cash, and ultimately a capital restructuring of the Company. In exchange for the contribution, the Company will issue 813,938 restricted UPREIT units, which are convertible after fours years after four years into 22.881 shares of the Company’s common stock for each unit.

Preferred Stock Incentive Conversion and Dividend Waiver

As a means to simplify the Company’s capital structure and increase the overall liquidity in its common stock, the Company intends to offer its Class A Preferred Shareholders a one-time incentive to convert each share of preferred stock into 22.881 shares of common stock. As part of the conversion, the preferred shareholders will also be asked to consent to the waiver of the dividend that is payable in April 2003 and to eliminate any future dividends that would have been payable on the preferred stock. The incentive offer will be made pursuant to a registered exchange offer, which the Company intends to initiate as soon as possible.

Shareholder Approval and Other Matters

Various components of the Corporate Repositioning Plan are subject to shareholder approval. The Company intends to file a proxy statement related to the transaction as soon as possible. In addition, to accommodate the shareholder vote, the Company announced that its previously scheduled Annual Shareholder Meeting will be rescheduled to coincide with the meeting date set to vote on this Repositioning Plan. The Company intends to announce dates in the near future.

As part of the Corporate Repositioning Plan, existing management has agreed to vote their shares of the Company’s capital stock in favor of the transactions contemplated by the Plan and to convert their preferred stock in the exchange offer. In addition, the independent Trustees of the Board of Trustees have unanimously approved and existing management has agreed to an option and put agreement to purchase the Minnesota properties currently held by the Company.

The Corporate Repositioning Plan is also subject to other customary terms and conditions, including an absence of any material adverse changes prior to the closing of the transactions contemplated in the Plan. While changes to the Existing Management Team and Board of Trustees are effective immediately, Stonehaven anticipates that the remaining portions of the Corporate Repositioning Plan will be completed in the second quarter of 2003.

Management Discussion

Upon closing of the transactions contemplated by the Corporate Repositioning Plan, it is anticipated Messrs. Culp, Hoyt, Lund and Padilla will step-down from the Board of Trustees of the Company.

“As discussed in our recent filings, we have been exploring and evaluating all available growth alternatives since the sale of our RESoft assets. We are pleased to have the opportunity to add this nationally recognized and experienced real estate leadership team to the Company. We believe this repositioning is in the best interest of our shareholders and this new management team is positioned to capture and create opportunities to grow the Company,” said Duane Lund, Chief Executive Officer of Stonehaven Realty Trust.

About Stonehaven Realty Trust

Stonehaven Realty Trust is a specialty real estate investment company that acquires, owns and operates real estate equity investments. Stonehaven currently owns four commercial real estate properties in Minnesota, totaling 129,000 rentable square feet. Additional information can be found at www.stonehavenco.com.

Forward-Looking Statements

Certain matters discussed within this press release may be deemed to be forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Stonehaven Realty Trust believes the expectations reflected in such forward looking statements are based on reasonable assumptions, it can give no assurance that the Corporate Repositioning Plan will be completed in whole or in part or shareholder approval or necessary exchange of

preferred stock into common stock will be attained. Factors that could cause actual results to differ materially from Stonehaven’s expectations include the inability to obtain shareholder approval and a sufficient exchange of preferred stock, changes in local or national economic or real estate conditions, expanding a new line of business, ability to meet competition, loss of existing key personnel, ability to hire and retain future personnel and other risks detailed from time to time in the company’s SEC reports and filings, including its annual report on Form 10-K, quarterly reports on Form 10-Q and periodic reports on Form 8-K. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Stonehaven Realty Trust intends to file a registration statement on Form S-4, which will include a proxy statement/prospectus in connection with the transaction and the shareholder vote and exchange offer in connection therewith. Stonehaven intends to mail the proxy statement/prospectus to its shareholders prior to the shareholder meeting to be called to approve items that require shareholder approval in connection with the transactions contemplated hereby, and will request shareholder proxies at that time. Shareholders of Stonehaven and other investors are urged to read the proxy statement/prospectus when it becomes available because it will contain important information about Stonehaven, Paragon Real Estate Development, LLC and the transaction. Any offer of securities will only be made pursuant to the proxy statement/prospectus. Shareholders and other investors may obtain a free copy of the proxy statement/prospectus when it is available at the SEC’s web site at www.sec.gov. A free copy of the proxy statement/prospectus may also be obtained from Stonehaven.

Stonehaven and its executive officers and trustees may be deemed to be participants in the solicitation of proxies from the shareholders of Stonehaven in favor of the transaction. Information regarding the interests of Stonehaven’s officers and trustees in the transaction will be included in the proxy statement/prospectus.

In addition to the proposed registration statement and proxy statement/prospectus, Stonehaven files annual, quarterly and special reports, proxy and information statements, and other information with the SEC. You may read and copy any of these reports, statements and other information at the SEC’s public reference rooms located at 450 5th Street, N.W., Washington, D.C., 20549, or any of the SEC’s other public reference rooms located in New York and Chicago. Please call the SEC at 1-800-SEC-0330 for further information on these public reference rooms. The reports, statements and other information filed by Stonehaven with the SEC are also available for free at the SEC’s web site at www.sec.gov.

This press release does not constitute an offer of any security. Any offer will be made pursuant to an effective registration statement under the Securities Act of 1933, which will also be available on the SEC’s web site.