WATLEY A B GROUP INC
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>10
<FILENAME>doc9.txt
<TEXT>
<PAGE>
EXHIBIT 10.8

                      SECOND AMENDMENT TO MASTER AGREEMENT



         This Second  Amendment to Master  Agreement  dated as of May ___,  2002
("SECOND  AMENDMENT"),  is  executed  by and among the  parties set forth on the
signature pages hereto.

                                    RECITALS

         A. ORIGINAL  AGREEMENT.  The parties hereto are parties to that certain
Master Subordination, Waiver, Release and Indemnification Agreement, dated as of
March 27, 2002, as amended by that certain First  Amendment to Master  Agreement
and First Amendment to Software Security  Agreement,  dated as of April 11, 2002
(as amended, the "ORIGINAL AGREEMENT").

         B. DEFINED TERMS.  Each capitalized term that is not otherwise  defined
herein shall have the meaning ascribed to such term in the Original Agreement.

         C.  ADDITIONAL  OBLIGATIONS.  Penson  has  agreed  to  lend  up  to  an
additional  $1,500,000  to Watley,  to be evidenced by an increase in the stated
principal balance of, and an amendment to, the Penson Note.

         D.  AMENDMENTS.   As  a  condition  precedent  to  (i)  advancing  such
additional  $1,500,000,  Penson has required,  inter alia, and the other parties
hereto have agreed,  that the Original  Agreement  shall be amended as set forth
herein, and that as a result, all of the references in the Transaction Documents
shall be correspondingly amended.

         E. MASTER AGREEMENT.  The Original Agreement, as amended by this Second
Amendment,  shall  be the  "MASTER  AGREEMENT,"  as  such  term  is  used in the
Transaction Documents.

                                    AGREEMENT

         In consideration of the agreements contained herein, the parties hereto
hereby agree as follows:

                  Section  1.  AMENDMENT  OF PENSON  NOTE.  The  Parties  hereto
recognize  and agree that,  from and after the effective  date hereof,  the term
"PENSON NOTE" as used in any of the Transaction Documents,  shall mean and refer
to that certain promissory note, dated as of March 27, 2002, executed by Watley,
payable to the order of  Penson,  in the  original  stated  principal  amount of
$1,600,000,  as such stated  principal  amount has been  increased to $1,800,000
pursuant to that certain First Amendment to Promissory  Note (Penson),  dated as
of April  11,  2002,  and as such  stated  principal  amount  has  been  further
increased to $3,300,000  pursuant to that certain Second Amendment to Promissory
Note (Penson) of even date herewith.


                                       1
<PAGE>

                  Section 2. AMENDMENT OF SENIOR  INDEBTEDNESS  AND OBLIGATIONS.
The parties hereto  recognize and agree that,  from and after the effective date
hereof, (a) the term "SENIOR INDEBTEDNESS," as used in Article III of the Master
Agreement,  shall mean and refer to all  amounts  owing to Penson  under (i) the
Original  Penson Loan, (ii) the Penson Loan (as modified by the amendment to the
defined  term "Penson  Note"  effected by this Second  Amendment)  and (iii) the
Lease,  and (b)  the  term  "OBLIGATIONS,"  as  used  in the  Software  Security
Agreement,  shall  include,  INTER ALIA,  amounts  owing to Penson under (i) the
Penson Loan (as modified by the  amendment  to the defined  term  "Penson  Note"
effected by this Second Amendment) and (ii) the Lease.

                  Section 3.  CONFIRMATION  OF AGREEMENTS  AND  REPRESENTATIONS.
Except  as  set  forth  on  EXHIBIT  A  hereto,   which  exceptions  could  not,
individually  or in the  aggregate,  reasonably  be  expected to have a Material
Adverse Effect (as defined in the Penson Note),  each party hereto  confirms and
agrees to each of the covenants,  representations,  and warranties applicable to
such party set forth in Article  VIII of the  Master  Agreement  and each of the
other Transaction Documents as of the date hereof.

                  Section 4. EFFECT OF  AMENDMENT.  Except as  expressly  stated
herein  or as  otherwise  expressly  agreed  by the  parties  thereto,  (a)  the
Transaction  Documents  are and shall be unchanged  and remain in full force and
effect,  and (b) this  Second  Amendment  shall not  constitute  a waiver of any
Default or Event of Default (as such capitalized terms are defined in the Penson
Note),  or a waiver of the right of Penson to insist  upon  compliance  with any
term, covenant, condition, or provision of the Transaction Documents, as amended
hereby. Except as specifically stated herein, the execution and delivery of this
Second Amendment shall in no way release,  harm or diminish,  impair,  reduce or
otherwise  affect,  the respective  obligations  and  liabilities of the parties
under the Transaction  Documents,  all of which shall continue in full force and
effect.

                  Section 5. MISCELLANEOUS.  This Second Amendment is a contract
made under and shall be construed in accordance with and governed by the laws of
the state of New York. This Second  Amendment shall benefit and bind the parties
hereto and their respective assigns, successors and legal representatives.  This
Second Amendment may be executed in two or more  counterparts,  and it shall not
be necessary  that the  signatures of all parties hereto be contained on any one
counterpart  hereof;  each counterpart  shall be deemed an original,  but all of
which  together  shall  constitute  one and the same  instrument.  All titles or
headings to the sections or other  divisions of this Second  Amendment  are only
for the convenience of the parties and shall not be construed to have any effect
or meaning with respect to the other content of such  sections,  subsections  or
the divisions,  such other content being controlling as to the agreement between
the parties hereto.


                                        2

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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

                                 PENSON FINANCIAL SERVICES, INC., a
                                 North Carolina corporation

                                 By:
                                     ----------------------------------------

                                 Name:
                                          -----------------------------------

                                 Title:
                                        -------------------------------------



                                 SDS MERCHANT FUND, L.P., a Delaware limited
                                 partnership

                                     By:
                                       ----------------------------------------
                                       SDS Capital Partners, LLC, its general
                                       partner


                                       By:
                                         --------------------------------------
                                         Steven Derby, Managing Member



                                 DMG  LEGACY  INTERNATIONAL  LTD.,  a
                                 British  Virgin  Islands  corporation

                                 By:
                                     ----------------------------------------

                                 Name:
                                          -----------------------------------

                                 Title:
                                        -------------------------------------



                                 DMG  LEGACY   INSTITUTIONAL  FUND,
                                 LLC,  a  Delaware  limited liability company

                                      By:
                                          -----------------------------------

                                      Name:
                                          -----------------------------------

                                      Title:
                                          -----------------------------------


                                        3
<PAGE>


                                 DMG LEGACY FUND, LLC, a Delaware limited
                                 liability company

                                      By:
                                          -----------------------------------

                                      Name:
                                           ----------------------------------

                                      Title:
                                           ----------------------------------



                                 A. B. WATLEY  GROUP INC., a
                                 Delaware corporation

                                 By:
                                     ------------------------------------------

                                 Name:
                                     ------------------------------------------

                                 Title:
                                     ------------------------------------------



                                 A. B.  WATLEY,  INC., a New
                                 York corporation

                                 By:
                                     ------------------------------------------
                                 Name:
                                     ------------------------------------------

                                 Title:
                                        ---------------------------------------



                                 RELATED PARTIES:



                                 ---------------------------------------------
                                 ROBERT MALIN


                                 ---------------------------------------------
                                 STEVEN MALIN


                                 ---------------------------------------------
                                 LINDA MALIN


                                 ---------------------------------------------
                                 ERIC STEINBERG


                                       4
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                                 ---------------------------------------------
                                 LEON FERGUSON


                                 ---------------------------------------------
                                 ANTHONY G. HUSTON


                                 ---------------------------------------------
                                 MARILYN WALDORF


                                 ---------------------------------------------
                                 LEONARD MALIN


                                 MALIN GROUP MEMBERS:

                                 LAN/WAN, INC.

                                 By:
                                   --------------------------------------------
                                   Robert Malin, President


                                   ATLANTIC GROUP, INC.

                                 By:
                                   --------------------------------------------
                                   Steven Malin, President


                                 KETER CORP.

                                 By:
                                   --------------------------------------------
                                   Linda Malin, President


                                 ----------------------------------------------
                                 STEVEN MALIN


                                 ----------------------------------------------
                                 ANTHONY G. HUSTON


                                        5
<PAGE>

                                 ----------------------------------------------
                                 ERIC STEINBERG



                                       6
<PAGE>


                                    EXHIBIT A

                     EXCEPTIONS TO REPRESENTATIONS OCCURRING

                              SINCE April 11, 2002


                                        1

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