Exhibit 10.5

AMENDMENT TO EMPLOYMENT AGREEMENT

This FIRST AMENDMENT TO EMPLOYMENT AGREEMENT dated as of January 30, 2007 is
between Clayton Holdings,  Inc., a Delaware corporation with its principal place
of business located at 2 Corporate Drive, Shelton, CT 06484 (the “Company”), and
David Keith Johnson (the “Employee”).

WHEREAS, the Employee is currently employed as the President and Chief Operating
Officer of the Company under an Employment Agreement dated May 1, 2006 (the
“Agreement”); and

WHEREAS, the Board of Directors of the Company has authorized new termination
arrangements in respect of Employee, and the parties hereto consider it
appropriate that the Agreement be amended to reflect such arrangements;

NOW, THERFORE, the Company and the Employee agree to the following amendment to
the Agreement.  Capitalized terms used in this Amendment that are not otherwise
defined shall have the same meanings as in the Agreement.

1. Section 3.02(f) of the Agreement is deleted in its entirety and replaced with
the following:

“(f)                              Upon not less than thirty (30) days’ written
notice from Employee to the Company of Employee’s voluntary resignation for Good
Reason (as that term is defined below) (which resignation must be within one
hundred twenty (120) days of the occurrence of the event or events giving rise
to such Good Reason), by written notice to the Chief Executive Officer and the
Board of Directors setting forth such Good Reason and giving the Company a
reasonable period of time, not less than ten (10) business days, to eliminate
and cure such Good Reason.  For purposes of this Agreement, “Good Reason” shall
mean the occurrence of any of the following events: (A) a reduction in
Employee’s annual Base Salary; (B) a material diminution of Employee’s duties or
job function as the President and Chief Operating Officer of the Company or
otherwise normally expected of or assigned to a person holding the position of
President and Chief Operating Officer at a business of Company’s size, nature
and industry; or (C) the relocation of the offices at which Employee is
principally employed to any other location which increases Employee’s commute by
more than fifty (50) miles from the current location of such offices.”

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the Employee and Company have executed this Amendment as of
the date set forth above.

 

 

 

EMPLOYEE:

 

 

 

/s/ David Keith Johnson

 

David Keith Johnson

 

 

 

 

 

CLAYTON HOLDINGS, INC.

 

 

 

 

 

/s/ Frank P. Filipps

 

Frank P. Filipps

 

Chief Executive Officer

 

2

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