**EXHIBIT      10.16**

**AMENDMENT      NO. 1**

**TO      THE **

**EMPLOYMENT      AGREEMENT**

**AMENDMENT      NO.1**

**WHEREAS**

**NOW,      THEREFORE**

|   | 5. | All                capitalized terms not defined herein shall have the same meaning                ascribed                to them in the Agreement. |
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|   | 6. | Section                5(b) of the Agreement is hereby replaced in its entirety as                follows: |
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|  | “(b) | BONUSES. |
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|   | (i) | ANNUAL                BONUS. In the event the Company’s annual consolidated pretax earnings, as                determined in accordance with generally accepted accounting principles                and                reported in the Company’s Form 10-K (the “Company’s Earnings”), equal or                exceed $3 million in any fiscal year during the Agreement Term, the                Company shall pay Employee annual bonus compensation (the “Annual Bonus”)                in an amount equal to 4% of the Company’s Earnings for such fiscal                year. |
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|   | (ii) | A                prorated portion of the Annual Bonus shall be payable quarterly (the                “Quarterly Payment”) in the event quarterly consolidated pretax earnings                (the “Quarterly Earnings”) equal or exceed $750,000, subject to a holdback                of 25% (the “Holdback”) of the Quarterly Payment due Employee. In the                event the Quarterly Earnings are less than $750,000, no Quarterly                Payment                shall be made and payment of the Annual Bonus, if any, shall be deferred                until completion of the fiscal year. Payment of the Annual Bonus                at the                end of the fiscal year shall be paid upon the filing of the Form                10-K and                the payment of a Quarterly Payment, when due, shall be made within                forth                five (45) days of the completion of the fiscal quarter. To the extent                the                Annual Bonus is due to Employee at the completion of the fiscal year                (including the Holdback), such payment shall be less any Quarterly                Payments received by Employee during the fiscal year. To the extent                that                any payment received by the Employee in a fiscal year is in excess                of the                Annual Bonus due for such fiscal year, such excess amount shall be                credited against the amount due to Employee for the Annual Bonus                for the                succeeding fiscal year.” |
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|   | 7. | Except                as specifically set forth in this Amendment, there are no other amendments                to the Agreement and the Agreement shall remain unmodified and in                full                force and effect. |
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|   | 8. | 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. |
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**IN      WITNESS WHEREOF**

| **HUDSON                HOLDING CORP.**       |                                    |
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|                                          |                                    |   |
| By:                                           | /s/                Martin C. Cunningham |   |
| Name:                Martin C. Cunningham     |                                    |
| Title:                Chief Executive Officer |                                    |
|                                          |                                    |
| /s/                Keith R. Knox              |                                    |
| Keith                R. Knox                  |                                    |

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