EX-10.1






Exhibit 10.1




November 9, 2006



Sandler O’Neill & Partners, L.P



	 	 	 
	Attention: Thomas Thurston and Buy Back/Institutional Trade Desk

	 
	 	 
	Re:

	 	Purchase of Common Stock Pursuant to Rule 10b5-1 and 10b-18
	
 
	 	 






Dear Sirs:



This letter (the “Agreement”) is to confirm Sandler O’Neill & Partners, L.P.’s (the “Agent”)
appointment as agent for TradeStation Group, Inc., a Florida corporation and NASDAQ GS-listed
company (the “Company”), to purchase shares of its common stock, $.01 value (the “Common
Stock”). It is understood that in connection with the making of these purchases, the Agent
will be acting as agent for the Company. The terms of the Agreement will be as follows:




	 	1.	 	The Agent will purchase shares of Common Stock for the account of the Company
on any day on which the Nasdaq National Market System is open for business and the
Common Stock trades regular way on the NASDAQ NMS (a “Trading Day”) commencing, Monday,
November 13, 2006, and ending on the earliest date specified in paragraph 12, in
accordance with the terms of Schedule A hereto. The Agent will use its commercially
reasonable efforts to purchase for the account of the Company, consistent with the
Agent’s duty of best execution, the Company’ Common Stock at the lowest possible price
within the guidelines of Rule l0b-18 under the Securities Exchange Act of 1934, as
amended (“Rule 10b-18”) and consistent with the specific instructions set out in
Schedule A hereto. Purchases of Common Stock may be made in the open market or through
privately negotiated transactions. The Agent may effect purchases on an agency basis
only, using direct market access or comparable electronic order placement, for the
account of the Company. The Company agrees that if the Agent is a market maker in the
Common Stock, the Agent may, in its discretion, purchase Common Stock in its capacity
as market maker. The Company understands and agrees that nothing in this Agreement
prohibits the Agent from purchasing Common Stock for its own account or for the account
of its customers.






	 	2.	 	The Agent shall purchase shares in accordance with the requirements of
paragraphs (b)(2), (b)(3) and (b)(4) of Rule 10b-18; provided, however, that the Agent
shall not be responsible for compliance with Rule 10b-18(b)(4) (Volume of Purchases)
to the extent that the Company or any affiliated purchaser of the Company has
purchased any block in lieu of purchasing shares under the 25 percent of ADTV (as
defined in Rule 10b-18(a)(1)) limit for a day and has not informed the Agent of such
block purchase.





TradeStation Group, Inc.


November 9, 2006


Page 2




	 	3.	 	The Company understands and agrees that the Agent, acting consistent with
ordinary principles of best execution, may be unable to effect purchases of any or all
of the Common Stock, due to the Common Stock not trading in sufficient volume at or
above a specified limit price, market rules on volume and price priority and
precedence, legal or regulatory restrictions or other factors. If, as a result of any
of these events, a purchase cannot be executed, the Agent shall, subject to the terms
of Schedule A, use its best efforts to effect such purchase as promptly as practicable
after the cessation or termination of such market disruption, applicable restriction or
other event. Notwithstanding the foregoing, the Agent provides no guarantee or
assurance that all of the shares contemplated to be purchased hereby shall be purchased
upon expiration of this Agreement and, whether or not so purchased on any one or more
trading days, upon such expiration or other termination the Agent shall have no further
liability or obligation to the Company under this Agreement.






	 	4.	 	The Company represents that (a) its execution, delivery and performance of
this Agreement (and any placement of orders to repurchase shares pursuant to this
Agreement) have been, and will remain prior to termination or expiration of this
Agreement, duly authorized by all necessary corporate action and do not contravene any
provision of its articles of incorporation or by-laws or any law, regulation or
contractual restriction binding on it or its assets, the contravention of which would
have a material adverse effect on the Company’s ability to perform its obligations
under this Agreement, (b) as of the date of this Agreement, it is not aware of any
material nonpublic information regarding the Company or its securities, and it is
entering into this Agreement in good faith and not as part of a plan or scheme to
evade the prohibitions of Rule 10b5-1 under the Securities Exchange Act of 1934, as
amended, and (c) its board of directors has authorized the transactions contemplated
hereby and the transactions contemplated hereby are consistent with the Company’s
publicly announced stock repurchase program.






	 	5.	 	The Company understands and agrees that the affirmative defense provided by
Rule 10b5-1 will be unavailable if it enters into or modifies any corresponding or
hedging transaction or position, within the meaning of Rule 10b5-1(c). Except with
respect to unsolicited purchases, the Company will not appoint any other agent to act
on its behalf in connection with purchases of Common Stock during the term of this
Agreement; provided, however, if the Company decides to change agents prior to the
planned expiration date of this Agreement, it may do so upon written notice and the
Agent shall cooperate to help effectuate a smooth transition to the successor agent.





TradeStation Group, Inc.


November 9, 2006


Page 3




	 	6.	 	The Agent will send the Company written confirmation of purchases on a daily
basis (showing the date of the transaction, the number of shares purchased, the price
paid, settlement dates, and its commissions and charges for executing the purchases).
Unless otherwise directed by the Company, such confirmation shall be sent to Mark
Glassman, Corporate Controller (mglassman@tradestation.com) and Marc Stone,
General Counsel (mstone@tradestation.com). The Agent will make delivery of the
Common Stock to the Company’s account at the Agent (such account to be established by
the Company prior to the initial purchase under this Agreement) on a normal three
business day settlement basis, against payment to the Agent of the purchase price and
its commissions by transfer of immediately available funds to the Agent (no fees shall
be charged by the Agent other than the agreed-upon commissions). The Agent will also
coordinate as necessary or appropriate with the Company’s stock transfer agent and
furnish the Company and its stock transfer agent with regular reports of the Company’s
accounts as the Company from time to time or periodically reasonably requests.






	 	7.	 	(a) The Company agrees to indemnify and hold harmless the Agent and any of its
affiliates, directors, partners, officers, employees, attorneys or agents from and
against any and all claims, losses, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) arising out of or attributable to
(i) the Agent’s actions taken or not taken pursuant to this Agreement, except such as
may result from the intentional acts, gross negligence or bad faith of the Agent, or
(ii) arising out of or attributable to any breach by the Company of this Agreement or
any violation by the Company of applicable laws and regulations. This indemnification
shall survive termination of this Agreement.






(b) Notwithstanding any other provision hereof, neither party shall be liable to the
other or any other person, and the Agent shall not be liable to any third party,
for: (i) special, indirect, punitive, exemplary or consequential damages of any
kind, even if advised of the possibility of such losses or damages or if such losses
or damages could have reasonably been foreseen; or (ii) any failure to perform or to
cease performance or any delay in performance that results from a cause or
circumstance that is beyond its reasonable control, including, but not limited to
failure of electronic or mechanical equipment, strikes, failure of common carrier or
utility systems, severe weather, market disruptions or other causes commonly known
as “acts of god.”




	 	8.	 	The Agent agrees not to take any action that would cause the affirmative
defense of Rule 10b 5-1(c) not to be available to the Company.	 





TradeStation Group, Inc.


November 9, 2006


Page 4




	 	9.	 	It is the intent of the parties that this Agreement and the transactions
hereunder comply with the requirements of Rule 10(b)5-1(c)(1)(i)(B) and Rule 10b-18
under the Securities Exchange Act of 1934, as amended, and this Agreement shall be
interpreted to comply with the requirements of Rule 10b5-1(c) and, as applicable,
Rule 10b-18.	 






	 	10.	 	This Agreement shall not be assignable, delegable or transferable
and any such assignment, delegation or transfer shall be null and void.	 






	 	11.	 	This Agreement shall be governed by and construed in accordance with the
laws of the State of New York and may be modified or amended only by a writing
signed by the parties hereto.	 






	 	12.	 	This Agreement shall become effective on November 9, 2006 (with the first
purchases to occur no earlier than November 13, 2006), and shall terminate on the
earlier of (i) the date that shares of Common Stock having an aggregate purchase price
(inclusive of commissions) of $60,000,000 have been purchased, (ii) the time the
Company gives written notice to the Agent of its termination, (iii) the date any
person or entity publicly announces a tender offer, exchange offer or other similar
transaction with respect to securities of the Company, (iv) the date of the public
announcement of a merger, acquisition, reorganization, recapitalization or other
similar transaction affecting the securities of the Company as a result of which the
Common Stock is to be exchanged for or converted into securities or property, or of a
sale of all or substantially all of the assets of the Company, or (v) the close of
trading on November 12, 2010 (or, if not a trading day, the trading day immediately
preceding November 12, 2010).





[CONTINUED ON NEXT PAGE]




TradeStation Group, Inc.


November 9, 2006


Page 5



If so terminated, the terms of this Agreement shall govern as to any purchase commitments made
by the Agent prior to the termination time.



If you are willing to accept this appointment on the above terms, please sign the enclosed
duplicate copy of this letter and return it to us.



Very truly yours,



TradeStation Group, Inc.



By: /s/ Salomon Sredni     


Salomon Sredni, President


Accepted as of November 9, 2006



Sandler O’Neill & Partners, L.P.



By: Sandler O’Neill & Partners Corp., the
sole general partner.



By: /s/ Thomas A. Thurston      


Print Name and Title: THOMAS A. THURSTON_



VICE PRESIDENT



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Schedule A




From November 13, 2006 through November 30, 2006, the Agent shall use up to $750,000 of Company
cash (inclusive of commissions) to purchase, without price restriction, but in solely the Agent’s
discretion, Common Stock. Thereafter, each calendar month, commencing December 2006 and ending
October 2010, the Agent shall use up to $1,250,000 (per month) of Company cash (inclusive of
commissions) to purchase, without price restriction, but in solely the Agent’s discretion, Common
Stock. Then, from November 1, 2010 through November 12, 2010, the Agent shall use up to $500,000
of Company cash (inclusive of commissions) to purchase, without price restriction, but in solely
the Agent’s discretion, Common Stock. The foregoing schedule is subject to early termination and
other applicable provisions of the Agreement, and, in all events, purchases of Common Stock
pursuant to the Agreement shall terminate the earlier of (a) the use of $60,000,000 of Company
cash, inclusive of commissions, and (b) the close of trading on November 12, 2010 (or, if not a
trading day, the trading day immediately preceding November 12, 2010).




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