Exhibit 10.1

                             SUBSCRIPTION AGREEMENT

HUDSON HOLDING CORPORATION
525 Washington Boulevard
Suite 3600
Jersey City, NJ 07310

Gentlemen:

      I hereby apply to HUDSON HOLDING CORPORATION, a Delaware corporation
(hereinafter "YOU" or "COMPANY"), to purchase Six Million Five Hundred and
Eighty One Thousand Seven Hundred and Eighty Four (6,581,784) shares of your
common stock (the "SHARES") in consideration of Two Million Dollars
($2,000,000).

      NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, YOU RECOGNIZE
      AND UNDERSTAND; COVENANT AND AGREE, THAT DUE TO THE RESTRICTIONS IMPOSED
      BY RULE 1017 THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.'S
      ("NASD") MEMBERSHIP RULES WITH RESPECT TO RESTRICTING THE TRANSFER OF A
      25% OWNERSHIP OF AN NASD MEMBER WITHOUT OBTAINING ITS PRIOR WRITTEN
      APPROVAL, YOU SHALL NOT AT ANY TIME HOLD, DIRECTLY OR INDIRECTLY,
      BENEFICIALLY OWN A NUMBER OF SHARES OF OUR COMMON STOCK WHICH WOULD EXCEED
      24.99% OF THE OUTSTANDING SHARES OF OUR COMMON STOCK. CONSEQUENTLY,
      WITHOUT NOTIFYING US IN ADVANCE AND OBTAINING OUR APPROVAL AND COOPERATING
      WITH US IN THE FILING OF ALL SUCH DOCUMENTATION WITH THE NASD, YOU HEREBY
      AGREE TO REFRAIN FROM MAKING ANY ADDITIONAL PRIVATE OR PUBLIC PURCHASES OF
      OUR SECURITIES. FOR THE PURPOSES OF THE IMMEDIATELY PRECEDING SENTENCE,
      BENEFICIAL OWNERSHIP SHALL BE DETERMINED IN ACCORDANCE WITH SECTION 13(D)
      OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED ("34 ACT"), AND
      REGULATION 13D-3 THEREUNDER.

      I understand that you may at any time at your sole discretion reject this
subscription. I understand that you will advise me as soon as practicable if my
subscription has not been accepted or if the offering of your Shares is
withdrawn. If you reject my subscription or withdraw the offering, you will
promptly return to me all amounts delivered by me in payment for any Shares and
this subscription agreement will have no further effect. If you reject my
subscription, I will return to you any documents you have provided to me at my
request for the purpose of evaluating this offering (the "OFFERING"). If you
accept my subscription, you will promptly provide me with share certificates
representing the Shares that I purchase in this offering.

      1. Representations of Subscriber. As an inducement to you to sell me the
Shares for which I have subscribed, I hereby represent to you as follows (either
in my individual capacity or as an authorized representative of an entity, as
applicable), on the understanding that those representations will survive
receipt (or the receipt by such entity) of the Shares:

            (1) if an individual, I am a bona fide resident of the state set
      forth on the last page of this agreement, over 21 years of age, and
      legally competent to execute this agreement; if an entity, the person
      executing this agreement on my behalf represents that I am duly organized
      under the laws of the state set forth on the last page of this agreement,
      I am validly existing, and I have full power and authority to execute this
      agreement, which will then be my legal, valid and binding agreement;
<PAGE>

            (2) I have gone to the Securities and Exchange Commission website
      (www.sec.gov) and carefully reviewed the Company's Quarterly Report on
      Form 10-QSB, dated as of September 30, 2005, the Proxy Statement, dated as
      of July 1, 2005, each of the Company's Form 8-K filings made during the
      calendar year 2005 and the Annual Report on Form 10-KSB, as of February
      28, 2005; any and all exhibits with respect to such filings, along with
      all of the Company's other publicly-filed and available disclosure
      documents (the "34 ACT FILINGS");

            (3) I have been furnished and have read all written materials
      provided by you relating to you, your proposed operations, the private
      offering of Shares (including without limitation the "RISK FACTORS", which
      are attached hereto as Exhibit B) and any other matters relating to this
      private offering (all such materials, including without limitation the 34
      Act Filings, hereinafter collectively called the "OFFERING MATERIALS")
      which have been requested; you have answered all inquiries that I have put
      to you relating thereto; and I have been afforded the opportunity to
      obtain any additional information, to the extent you possessed such
      information or were able to acquire it without unreasonable effort or
      expense, necessary (A) to verify the accuracy of the information set forth
      in the Offering Materials; and (B) to evaluate the merits and risks of
      purchasing the Shares;

            (4) I have carefully reviewed and understand the various risks of an
      investment in the Shares and have made such independent investigation and
      evaluation of the statements made in the Offering Materials and all other
      written materials provided to me by you with respect to your financial
      condition, properties, business and prospects as I deem necessary to make
      an informed decision to purchase the Shares; my decision to purchase the
      Shares has been made on the basis of such investigation and evaluation; in
      making such decision I have relied exclusively on the written statements
      with respect to any such matters or otherwise with respect to you which
      are contained in the Offering Materials, and which have been independently
      investigated and evaluated by me;

            (5) I have completed the Confidential Prospective Purchaser
      Questionnaire attached hereto as Exhibit A; I confirm the statements made
      therein are true on the date hereof, and I acknowledge that the statements
      and representations made by me therein and in this agreement have been
      relied upon by you in offering to sell the Shares to me; I further agree
      to indemnify and hold harmless the Company and its respective officers,
      directors and stockholders, from any and all damages, losses, costs and
      expenses (including reasonable attorneys' fees) that they may incur, by
      reason of any breach of any of the statements or representations made by
      me contained herein or therein;

            (6) I realize that I will not be able to resell readily any of the
      Shares purchased under this agreement because none of those Shares have
      been registered under the Securities Act of 1933, as amended (the "Act"),
      or any state securities laws, and, therefore, those Shares can be sold
      only if they are subsequently registered under the Act or an exemption
      from registration is available;

            (7) I understand that you have the absolute right to refuse to
      consent to transfer or the assignment of any Shares if that transfer or
      assignment does not comply with applicable state and federal securities
      laws;

            (8) I understand that this offering is intended to be a non-public
      offering in accordance with section 4(2) of the Act and Regulation D
      promulgated under the Act ("REGULATION D"), that no aspect of this
      offering has been reviewed by the United States Securities and Exchange
      Commission or the securities regulatory authorities of any state and that
      none of the Offering Materials nor any other written materials furnished
      by you and used in connection with this offering has been reviewed by any
      federal or state securities regulatory bodies or authorities;
<PAGE>

            (9) the Shares are being purchased for my own account, for
      investment, and not with a view to distribution or resale to others; I am
      not participating, directly or indirectly in an underwriting of any such
      distribution or other transfer; I do not now have reason to anticipate any
      change in my circumstances or any other particular occasion or event which
      would cause me to sell the Shares; I have substantial experience in making
      decisions of this type or am relying on my own qualified advisor in making
      the investment decision; and I understand that you are relying upon the
      truth and accuracy of this representation and warranty;

            (10) neither you nor any person acting on your behalf has made any
      representations to me except as contained in the Offering Materials; and
      in making my decision to purchase the Shares I have subscribed for, I have
      not relied on any representations or information other than those which I
      have independently investigated and verified to my satisfaction;

            (11) I understand that this subscription may be accepted or
      rejected, in whole or in part, by you in your sole and absolute
      discretion;

            (12) all the information that I heretofore furnished to you, or that
      is set forth in this agreement or the related Confidential Prospective
      Purchaser Questionnaire, with respect to my financial position and
      business experience is correct and complete as of the date of this
      agreement, and if there should be any material change in that information
      prior to receipt of the Shares that I subscribe for, I will immediately
      furnish you with revised or corrected information;

            (13) I am able to bear the substantial economic risk of an
      investment in the Shares and currently can afford a complete loss of that
      investment; my overall commitment in investments that are not readily
      marketable is reasonable in relation to my net worth;

            (14) if an entity, I have not been organized for the specific
      purpose of acquiring the Shares being offered;

            (15) I have previously been a principal of a licensed NASD
      broker-dealer and am well aware of the business and regulatory risks
      associated with being an investor in such an enterprise; and

            (16) There are no judicial or regulatory issues imposed upon me
      which would prevent me from entering into this transaction and carrying
      out its intent.

      2. Miscellaneous. (a) All notices or other communications given or made
under this agreement must be in writing and be delivered by hand or mailed by
registered or certified mail, postage prepaid, to myself or to you at the
respective addresses set forth herein, and will be deemed to have been given or
delivered on the date of the hand delivery or four days after mailing.

            (b) All matters arising under this agreement, including without
limitations tort claims, are governed by the laws of the State of New Jersey,
without giving effect to principles of conflicts of law.
<PAGE>

            (c) This agreement constitutes the entire agreement between you and
I with respect to the subject matter of this agreement and may be amended only
by a writing executed by you and I. Neither this agreement nor any of my rights
under this agreement may be transferred or otherwise assigned hereunder.

            (d) Unless this agreement is rejected, my obligations hereunder will
not be terminated upon the occurrence of any event (whether by operation of law
or otherwise), including, without limitation, my death, occurrence of
disability, or declaration that I am incompetent, and this agreement (including
the representations and warranties contained herein) will bind my successors,
legal representatives, heirs, and distributees.

            (e) If requested at any time by you, I will promptly supply such
information regarding myself as may be necessary for inclusion in any
registration, qualification, application or other filing to be made at any time
hereafter on your behalf. I shall furnish such information to you as you deem
necessary to satisfy yourself that I may legally purchase the Shares.

      3. Compliance with Applicable Laws. I will not sell, assign, transfer,
pledge or otherwise dispose of any of the Shares except in compliance with all
conditions on transfer imposed by the Act and by "Blue Sky" or securities laws
of any state, and I will be fully responsible for complying with all such
conditions.

      4. Execution of Other Documents. I will execute such other documents as
may be necessary to complete the transactions contemplated hereby, including,
without limitation, the Confidential Prospective Purchaser Questionnaire, and I
will be bound by all of the terms of any such documents and will perform all of
my obligations thereunder with respect to the Shares being purchased.

      I am entering into this agreement by signing the attached "individual
subscription" or "entity subscription," as applicable, on the date indicated
thereon. By so doing I am agreeing to purchase the number of Shares stated
thereon and am agreeing to all the terms of this subscription agreement. I am
enclosing with this agreement a check payable to the order of "Hudson Holding
Corporation," in full payment of my subscription.
<PAGE>

                             INDIVIDUAL SUBSCRIPTION

                           Price Per                 Amount of Purchase
Number of Shares           Share                     Price (Check Enclosed)
-------------------        ---------                 ----------------------
6,581,784         x        $.303                     $2,000,000

Printed Name & Residence Address (Note: Business Address will NOT be accepted.)


Dated: January 10, 2006        Signature - Purchaser: /s/ Kenneth Pasternak
                                                      ---------------------
                               Social Security Number: xxx-xx-xxxx

Subscription accepted as of January 10, 2006

HUDSON HOLDING CORPORATION


By: /s/ Martin Cunningham
    ---------------------
Name: Martin Cunningham
Title: Chief Executive Officer