CLASS A PREFERRED STOCK REDEMPTION AGREEMENT

Exhibit 10.1

CLASS A PREFERRED STOCK REDEMPTION AGREEMENT

THIS CLASS A PREFERRED STOCK REDEMPTION AGREEMENT (this “Redemption Agreement”) is made and entered into as of October 17, 2014 by and among Trade Street Residential, Inc., a Maryland corporation (“TSRE”), Trade Street Operating Partnership, LP, a Delaware limited partnership (“TSOP”) (TSRE and TSOP being hereinafter referred to sometimes as the “TSRE Parties”), BCOM Real Estate Fund, LLC Liquidating Trust, a Delaware statutory trust (“BREF Trust”) acting through BCOM Investment Manager, LLLP, its trustee (“BREF Trust Master Trustee”) and Michael J. Fellner, its designated series trustee (“BREF Stock Series Trustee”) for the BREF Stock Series Trust , a series trust of the BREF Trust (“BREF Stock Series Trust”), Trade Street Property Fund I, LP Liquidating Trust, a Delaware statutory trust (“TSPF1 Trust”) acting through BSF-TSC GP, LLC, its trustee (“TSPF1 Trust Master Trustee” and, collectively with BREF Trust Master Trustee, the “Master Trustees”) and Michael J. Fellner, its designated series trustee (“TSPF1 Stock Series Trustee”) for the TSPF1 Stock Series Trust, a series trust of the TSPF1 Trust (“TSPF1 Stock Series Trust”), and for the limited purpose of agreeing to the provisions set forth in Section 3(f), the final paragraph of Section 5, Section 6, Section 10, Section 12 and Section 13, Michael D. Baumann, individually (“Baumann”). The signatories to this Redemption Agreement are sometimes herein each referred to, individually, as a “Party” and, collectively, as the “Parties.”

RECITALS

WHEREAS, TSRE is a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1987, as amended;

WHEREAS, in connection with a transaction consummated on June 1, 2012 (the “Original Contribution”) pursuant to a Contribution Agreement dated April 23, 2012 BCOM Real Estate Fund, LLC (“BREF”), the predecessor in interest to BREF Trust, Trade Street Property Fund I, LP (“TSPF1”), the predecessor in interest to TSPF1 Trust and Baumann and entities controlled by Baumann transferred to TSOP all of their respective rights, titles and interests in and to certain real properties and other business assets, including certain land parcels, in exchange for consideration consisting of assumption of certain liabilities and issuance of shares of common stock of TSRE (the “Common Stock”), units of limited partnership interests in TSOP and shares of Class A Preferred Stock, $.01 par value per share of TSRE (the “Class A Stock”);

WHEREAS, on December 3, 2012, pursuant to a Contribution Agreement of even date therewith (the “Millenia Contribution Agreement”), BREF/BUSF Millenia Associates, LLC, a Delaware limited liability company (“BREF/BUSF”) that was then jointly owned, indirectly, by the BREF Trust and the TSPF1 Trust contributed to TSOP (the “Millenia Contribution”) all of BREF/BUSF’s rights, titles and interests in and to the apartment community in Orlando, Florida commonly known as Millenia I and certain land adjacent thereto in exchange for consideration consisting of assumption of certain liabilities and issuance of shares of Common Stock and Class A Stock;

WHEREAS, the Class A Stock received by BREF pursuant to the Original Contribution was assigned by BREF to the BREF Trust organized to carry out the liquidation of BREF and was then placed by the BREF Trust, along with the Class A Stock distributed from BREF/BUSF to the BREF Trust from the Millenia Contribution, into the BREF Stock Series Trust under the control of the BREF Stock Series Trustee, an independent trustee;

WHEREAS, the Class A Stock distributed from BREF/BUSF to the TSPF1 Trust following the Millenia Contribution was then placed by TSPF1 Trust into the TSPF1 Stock Series Trust under the control of the TSPF1 Stock Series Trustee, an independent trustee (the BREF Stock Series Trust and the TSPF1 Stock Series Trust may hereafter be referred to collectively as the “Series Trusts” and Michael J. Fellner, in his capacities as the designated series trustee of each of the Series Trusts may sometimes hereafter be referred to as the “Series Trustee” and the Series Trust, together with the BREF Trust and TSPF1 Trust, may hereafter be collectively referred to as the “Trusts”);

WHEREAS, the Trusts currently own an aggregate of 309,130 fully paid and non-assessable shares of Class A Stock comprising one hundred percent (100%) of the issued and outstanding Class A Stock of TSRE, the BREF Trust owning 228,012 shares of Class A Stock and the TSPF1 Trust owning 81,118 shares of Class A Stock;

WHEREAS, TSOP currently owns, directly or through one hundred percent (100%) ownership of all of the equity of a legal entity that holds title, one hundred percent (100%) of the ownership interests in certain land parcels commonly known as Venetian (“Venetian”), The Estates at Maitland (“Maitland”), Estates at Millenia – Phase II (“Millenia”) and Sunnyside (“Sunnyside”), each of which land parcels is legally described in Exhibit A attached hereto, together with the identity of the legal title holder of such land parcel (Sunnyside, Venetian, Maitland and Millenia are sometimes hereafter referred to, individually, as a “Parcel” and, collectively, as the “Parcels”);

WHEREAS, TSOP has listed for sale all of the Parcels and desires to dispose of those Parcels;

WHEREAS, the Class A Stock has no trading market, but is convertible, based upon a formula, into Common Stock which does have a trading market, which conversion formula is tied to the value of the Parcels (excluding Sunnyside), the disposition of which by TSOP, before development thereof, results in a disagreement between the TSRE Parties and the Trusts with respect to the applicability of that conversion formula and the resulting value of the Class A Stock to the Trusts;

WHEREAS, the Trusts and TSRE Parties desire to resolve all issues with respect to the Class A Stock by the Trusts agreeing herein to bargain, sell, transfer and convey to TSRE all shares of Class A Stock owned by them in exchange for the consideration described herein;

WHEREAS, the Trusts desire to acquire the Parcels and are willing, in return for the Parcels and cash consideration, in each case as more fully set forth herein, to sell the Class A Stock to TSRE; and

WHEREAS, TSRE desires to purchase and acquire from the Trusts 309,130 shares of Class A Stock in complete redemption of all issued and outstanding shares of Class A Stock on the terms and subject to the conditions stated herein.

NOW, THEREFORE, in consideration of the mutual covenants, agreements and releases set forth herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1.            The BREF Trust joined by the Series Trustee for the BREF Stock Series Trust, as to 228,012 shares, and the TSPF1 Trust joined by the Series Trustee for the TSPF1 Stock Series Trust, as to 81,118 shares, each hereby severally do bargain, sell, convey and transfer to TSRE, and TSRE hereby purchases and redeems from each of the BREF Trust and the TSPF1 Trust, the shares of Class A Stock owned by such Trust, constituting an aggregate of 309,130 shares of Class A Stock. By executing this Redemption Agreement, the BREF Master Trustee and Series Trustee, with respect to the BREF Trust and the 228,012 shares of Class A Stock held in the BREF Stock Series Trust, and the TSPF1 Master Trustee and Series Trustee, with respect to the TSPF1 Trust and the 81,118 shares of Class A Stock held in the TSPF1 Stock Series Trust, severally and not jointly as to each Trust, represent and warrant that it and he has and have the requisite power and authority to cause such shares of Class A Stock to be redeemed hereunder to be transferred to TSRE in exchange for the consideration provided herein.

2.            In exchange for the Class A Stock to be redeemed pursuant to Section 1 above, and in consideration for the releases by Baumann and the Trusts set forth in Section 6, TSOP shall, in the manner set forth herein, (i) convey title to each of the Parcels by deed, (ii) convey and assign certain assets and rights related to the Parcels as described below by bill of sale/assignment and (iii) pay the sum of Five Million Dollars ($5,000,000) (the “Cash Consideration”) by wire transfer of readily available funds, in each case to such entity or entities as designated in writing by the Master Trustees to receive such assets from TSOP (each, a “Designated Entity”).

3.            The closing of the transactions described above (the “Closing”) shall occur in the offices of Greenspoon Marder, 200 East Broward Blvd., Suite 1800, Ft. Lauderdale, Florida at 10:00 a.m. eastern daylight time, on October 17, 2014, or on such other date and time as the parties hereto shall mutually agree. The Closing shall involve the delivery of all Closing Deliverables (hereinafter defined) into escrow with Greenspoon Marder as escrow agent (the “Escrow Agent”), to be held by the Escrow Agent pursuant to the Escrow Agent’s standard form agreement for closing real estate transactions into escrow pending the filing of the Notice of Dismissal (defined in subsection (f) of this Section 3), a copy of which is attached hereto as Exhibit D. When counsel of record to Senator and Baumann jointly provide notice as provided in this Redemption Agreement that the Notice of Dismissal has been duly filed, then the Escrow Agent shall deliver the Closing Deliverables pursuant to this Section 3 as follows:

4.            As an inducement for the Trusts and Baumann to execute and deliver this Redemption Agreement, TSRE and TSOP represent and warrant to the Trusts, the Master Trustees, the Series Trustees and Baumann as follows (which representations and warranties shall survive the Closing for a period of three years):

(i)            TSOP or the wholly owned subsidiary of TSOP identified as the owner of a Parcel in Exhibit A (“Owner”) has good and marketable fee simple title to its respective Parcel as designated on Exhibit A attached hereto and made a part hereof, free and clear of all liens, mortgages, deeds of trust, deeds to secure debt, pledges, hypothecations, assignments, security interests, tax liens (other than for taxes due but not yet payable), assessments, adverse claims, levies, charges, liabilities or encumbrances (collectively, “Liens”) or exceptions except for those non-monetary exceptions set forth on the title insurance policy referenced in the next subsection hereof;

(ii)            The TRSE Parties have delivered to the Trusts true, complete and correct copies of all deeds, title reports, title insurance policies and surveys for each Parcel; provided the TSRE Parties make no representation or warranty as to the accurateness or completeness of any third party report delivered by it in accordance with the terms hereof;

(iii)            Neither TSOP nor any Owner has received any written notice that any portion of a Parcel is subject to any pending or threatened condemnation proceeding by any public or quasi-public authority;

(iv)            Except as disclosed in writing to the Trusts prior to the date hereof, no horizontal, vertical or underground construction, or site clearing has been performed upon any Parcel during the period of ownership of the TRSE Parties; there is no contract in effect for any construction to be performed or any open building permit or pending building permit application with respect to construction upon or development of any of the Parcels. No materials have been furnished to the Parcel which, although not presently the subject of, might give rise to, mechanics, materialmens, or other Liens against any Parcel or any portion thereof or for which payment has not been made in full. To the extent that the TSRE Parties have performed any horizontal, vertical or underground construction, or any site clearing, such work has been performed in accordance with all applicable governmental regulations.

(v)            Neither TSOP nor any Owner has received any written notice from any Governmental Authority with respect to the violation of any applicable law regulating use of the Parcel, including, without limitation, any use or occupancy restriction, limitation, condition or covenant of record or any zoning or building law (For purposes of this Redemption Agreement, “Governmental Authority” means any international, supranational, national, provincial, regional, federal, state, municipal or local government, any instrumentality, subdivision, court, administrative or regulatory agency or commission or other authority thereof, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental authority or quasi-governmental authority) other than immaterial citations for failure to keep up the Parcel, all of which citations have been disposed of promptly upon receipt and in a manner that has not resulted in diminution in value of any Parcel;

(vi)            Neither TSOP nor any Owner has currently pending any material real estate tax contest pertaining to any Parcel and all real estate taxes due and owing and not yet delinquent with respect to any of the Parcels have been paid in full;

(vii)            Neither TSOP nor any Owner is a party to any lease, sublease, license or similar agreement under which TSOP or such Owner has granted to any Person the right to use or occupy any portion of any Parcel;

(viii)            With respect to each of the Parcels, since February 23, 2014: (A) such Parcel is not now and, to the TSRE Parties’ knowledge, has not been used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce, process or in any manner deal with Hazardous Substances or Hazardous Wastes, as those terms are respectively defined in 42 U.S.C. § 9609(14) and 42 U.S.C. § 6903(5), or as defined in any other federal, state or local environmental law, ordinance, rule or regulation (collectively “Environmental Laws”), other than in a manner in accordance with the Environmental Laws; has not received any notice from any governmental agency or any tenant, subtenant or occupant with regard to Hazardous Substances or Hazardous Wastes on, from or effecting the Parcel; and neither TSOP nor any Owner has caused or permitted to exist the releasing, spilling, leaking, pumping, pouring, emitting, emptying, or dumping from, on or about any  Parcel of any Hazardous Substance or Hazardous Waste; and (B) neither TSOP nor any Owner has received written notice that it does not presently comply with all Environmental Laws and covenants to immediately notify the Trusts, in writing, of the discovery, discharge or release of any Hazardous Substance or Hazardous Waste in contravention of any Environmental Law; (C) to the knowledge of the TSRE Parties and each Owner, no Parcel contains any surface or underground substances or conditions, including, without limitation, fuel or other storage tanks, which could cause a violation of any Environmental Law, and, since its ownership thereof, the Parcel has never been used as a landfill or garbage dump; (D) no TSRE Party or Owner has received written notice that it has not secured and does not hold all permits, licenses, and approvals necessary or required for its operation of each Parcel; the Parcel is in material compliance with such permits; and  TSOP and each Owner agree that it shall not permit or cause the Parcel to be used prior to the Closing Date for any activities involving, directly or indirectly the use, generation, treatment, storage or disposal of any Hazardous Substance or Hazardous Waste), other than in a manner in accordance with Environmental Laws; and

(ix)            Neither TSRE Party nor any Owner has received any written notice of any assessment for public improvements against the Parcel which remains unpaid.

5.            As an inducement for TSRE and TSOP to execute and deliver this Redemption Agreement, BREF Trust and TSPF1 Trust, severally and not jointly, represent and warrant to the TSRE Parties as follows (which representations and warranties shall survive the Closing for a period of three years):

As an additional inducement for TSRE and TSOP to execute and deliver this Redemption Agreement, Baumann represents and warrants to the TSRE Parties (which representations and warranties shall survive the Closing for a period of three years) that: (A) Baumann has the requisite legal capacity to execute and deliver this Redemption Agreement and perform his obligations hereunder; and (B) there is no action, suit, or proceeding, pending or, to Baumann’s knowledge, known to be threatened, against or affecting Baumann in any court or before any arbitrator or before any federal, state, municipal, or other governmental department, commission, board, bureau, agency or instrumentality that (i) in any manner raises any question affecting the validity or enforceability of this Redemption Agreement, or (ii) could materially and adversely affect the ability of each of the Baumann and the Trusts to perform their respective obligations hereunder, or under any document to be delivered pursuant hereto.

6.            Mutual Release.

7.            The TSRE Parties, on behalf of themselves and the other Releasees, agree that none of the TSRE Parties, Shareholder Parties or other Releasees shall, except to the extent required by law, engage in any conduct or take any action that interferes or could be expected to interfere with the administration of the Trusts by the Master Trustees, Series Trustee, or any of their respective attorneys, consultants, agents, employees, independent contractors or designees. By way of illustration, and not limitation, such prohibited conduct includes, but is not limited to, (i) any efforts by any of the Releasees to direct or influence the timing or manner of the distribution or disposition of any assets held by, for or at the direction of the Trusts; and (ii) any attempts by any of the Releasees to communicate, directly or indirectly, with any beneficiaries of the Trusts, or any attorneys, consultants, agents, employees, independent contractors, or other representatives acting, or purporting to act, on behalf of any beneficiaries of the Trusts, with respect to any matters relating to the Trusts. The TSRE Parties, on behalf of themselves and the other Releasees, further agree that the Trusts, Master Trustees and Series Trustee will suffer irreparable harms as a result of any breach of this Section 7 and are entitled to seek and obtain injunctive relief accordingly (in addition to any other relief or remedies provided at law, equity or under this Redemption Agreement). Nothing contained in this Section 7 shall preclude the TSRE Parties or any Releasee from any communication or action that is intended to remedy a breach of this Redemption Agreement.

8.            This Redemption Agreement shall constitute the entire agreement among the parties with respect to the subject matter hereof, superseding all prior understanding, negotiations and agreements among the parties hereto, and may be amended only by a written amendment duly executed by all parties hereto.

9.            All real estate taxes through 2014, personal property taxes through 2014, and any special assessments pertaining to the Parcels, whether levied for present or future payment, shall be prorated between the Parties up to the day immediately preceding the date of Closing. There shall be no proration of any insurance maintained by a Parcel owner and such owner may cancel any such insurance two (2) days after the date of Closing and shall be entitled to receive any reimbursement of unearned premium from the insurance company. In the event any of the 2014 tax bills are not final as of the Closing, then the 2014 TRIM Notice, if available, or the 2013 tax bill, if the TRIM Notice is not available, in each case with full discount, shall be used as the basis for the proration. A reproration shall be done when all 2014 tax bills are final and payment made by the party owing any amount within 30 days of receipt of demand therefor.

10.            This Redemption Agreement has been negotiated by the parties hereto in good faith, with each party being represented by competent counsel of its choice, and no provision herein shall be construed against a party by reason of the fact that such party or its counsel drafted the provision in question.

11.            Any notice given to a party under this Redemption Agreement shall be given in writing addressed to such party and delivered by mail or express courier to the last known address of such party or by electronic mail delivered to the last known email address of such party.

12.            Each of the Parties shall bear its own costs in connection with the negotiation, documentation, execution and closing of the transactions contemplated herein.

13.            This Redemption Agreement shall be governed by and construed in accordance with the laws of the state of Delaware. Any action arising under this Redemption Agreement shall be brought in a federal or state court in Wilmington, Delaware.

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IN WITNESS WHEREOF, each of the parties to this Redemption Agreement, intending to be legally bound, has executed and delivered this Redemption Agreement as of the day and year first above mentioned.

Each of the undersigned shall not be considered a party to or signatory to this Redemption Agreement, except that each of the undersigned hereby agrees to the release provision set forth in Section 6(c) of this Redemption Agreement.

Senator Investment Group LP, for itself and on behalf of Senator Global Opportunity Fund LP and the Senator Global Opportunity Intermediate Fund L.P.

Monarch Alternative Capital LP, for itself and on behalf of Monarch Debt Recovery Master Fund Ltd, Monarch Opportunities Master Fund Ltd, Monarch Capital Master Partners II-A LP, Monarch Capital Master Partners II LP, P Monarch Recovery Ltd., Monarch Alternative Solutions Master Fund Ltd