AMENDMENT NO. 2 TO THE

Exhibit 10.2

AMENDMENT NO. 2

TO THE

EMPLOYMENT AGREEMENT

This AMENDMENT NO. 2 (the “2nd Amendment”), dated 12, 2009, is entered into by and between Hudson Holding Corp., a Delaware corporation (the “Company”), and Keith R. Knox (the “Employee”), for the purpose of amending the terms of that certain Employment Agreement, dated January 1, 2007 (the “Agreement”) and the Amendment No. 1 to the Employment Agreement, dated May 19, 2008 (1^st Amendment).

WHEREAS, the Company and Employee desire to amend, modify and clarify the Agreement, and supersede and replace the 1^st Amendment, as set forth in this 2^nd Amendment.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties amend the Agreement and 1^st Amendment and agree as follows:

1. All capitalized terms not defined herein shall have the same meaning ascribed to them in the Agreement.

2. Section 5(b) of the Agreement is hereby replaced in its entirety as follows:

(b) Annual Bonus.

3. Section 13 of the Agreement is replaced in its entirety as follows:

(a) The Company may terminate the employment of Employee under this Agreement only for Cause (as hereinafter defined), Disability or the death of the Employee during the Agreement Term.

(i) Upon such termination for Cause, the Company shall be released from any and all further obligations under this Agreement, except that the Company shall be obligated to pay Employee his Salary, reimbursable expenses and benefits owing to the Employee through the date of termination and any Annual Bonus (or Quarterly Payment) due and not yet paid as of the Termination Date.

(ii) Upon any termination without Cause or Employee’s termination or resignation for Good Reason, Employee will be paid in a lump sum, less all appropriate withholding, within 30 days of the termination date, a termination payment (the “Termination Payment”). The Termination Payment will be equal to (1) all unpaid Compensation under section 5 of the Agreement, and any amendments thereto, including Salary, and Car Allowance, that was not received by the Employee, for each calendar year, or portion thereof, from the Termination Date through the Agreement Term; (2) a payment equal to the cost of COBRA premiums for medical insurance that were not received by the Employee for each calendar year, or portion thereof, from the Termination Date through the Agreement Term and (3) any Annual Bonus (or Quarterly Payment) due and not yet paid as of the Termination Date.

(b) As used herein, the term “Cause” shall mean:

(i) a material breach or material default by Employee of the terms of (A) this Agreement (except any such breach or default that is caused by the Disability or death of Employee), which breach or default remains uncured after twenty (20) days following Employee’s receipt from the Company of written notice specifying such breach or default or (B) any material policy of the Company (including, without limitation, the Company’s policies with respect to insider trading and other trading activities);

(ii) gross negligence or willful misconduct by Employee or the breach of a fiduciary duty of Employee to the Company in the performance of his duties hereunder;

(iii) the commission by Employee of an act of fraud, embezzlement or any other crime by Employee in the performance of his duties as an employee hereunder;

(iv) conviction of Employee of a felony or any other crime that could materially interfere with the performance of Employee’s duties hereunder or materially damages the reputation of the Company;

(v) failure to hold and maintain in full force and effect during the term of this Agreement, all licenses required by the NASD, all applicable self regulatory organizations, and all federal and state securities and other laws necessary to perform services to the Company as contemplated by this Agreement.

(c) As used herein, the term “Good Reason” is defined as any of the following events which are not cured by Company within twenty (20) days after receipt of written notice of termination from Employee based on: (i) reduction in the Employee’s (then) current Salary; (ii) diminution, reduction or other adverse change in the Annual Bonus, Quarterly Payment, or other incentive compensation opportunities available to the Employee; (iii) a change in the Employee’s title subordinate to the title of President or a significant diminution of the Employee’s title, position, authority or responsibility; (iv) assignment to the Employee of duties incompatible with the position of President; (v) a determination by a court that there has occurred a material breach by the Company of any provision of this Agreement, or any amendments thereto, which is not remedied within 20 days after receipt by the Company of written notice from Employee; or (vi) a Change in Control as defined in Section 14.

(d ) Employee shall not be required to mitigate the amount of the Termination Payment called for by Section 13, or any other payments or benefits due under this Agreement, by seeking other employment.”

“

4. Section 14 of the Agreement is replaced in its entirety as follows:

(a) In the event that there occurs a “Change of Control” (as defined below) during the term of this Agreement and as a result thereof the Employee resigns for Good Reason (as defined in Section 13(c)(vii) above), or this Agreement is terminated, the Company expressly agrees that upon such resignation or termination, the Company shall pay to the Employee the Termination Payment set forth in Section 13 above. As used herein, the term “Change of Control” shall mean, either

5. Section 15 of the Agreement is replaced in its entirety as follows:

(a) It is mutually understood and agreed that Employee’s services are special, unique, unusual, extraordinary and of an intellectual character giving them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages or in an action at law. Accordingly, in the event of any breach of this Agreement by Employee, the Company shall be entitled to equitable relief by way of injunction or otherwise in addition to damages the Company may be entitled to recover.

(b) In the event of any dispute, controversy or claim arising under this Agreement, the court or arbitration panel that decides the dispute, controversy or claim has the right and power to award to the prevailing party recovery of any or all costs of the legal proceeding (whether in court or in arbitration), interest on any amount awarded from the date due, and reasonable attorneys’ fees and expenses. “

6. The Company agrees that upon any termination of Employee’s employment that within three days it will in good faith issue an opinion letter that will remove all restrictions on any stock he owns in the Company.

6. This 2^nd Amendment supersedes in its entirety the 1^st Amendment. Except as specifically set forth in this 2^nd Amendment, the Agreement will remain unmodified and in full force and effect except as so amended herein.

7. This Amendment shall be governed by and construed in accordance with the domestic laws of the State of New Jersey, without giving effect to any choice of law or conflict of law provision or rule (whether the State of New Jersey or any other jurisdiction) that would cause the application of the laws of any jurisdiction

other than the State of New Jersey. This Amendment may be executed in one or more counterparts, any one of which may be by facsimile, and all of which taken together shall constitute one and the same instrument.

8. By its signature below, the Company represents and warrants that this amendment has been approved by the Company through its Board of Directors.

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