**Exhibit 10.50**

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**SECOND AMENDMENTTOEMPLOYMENT AGREEMENT**

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# A.                                 TheEmployment Agreement (the “Agreement”) entered into September 2,2005 by and between Clayton Holdings, Inc., a Delaware corporation (“Employer”)and Frederick C. Herbst (“Employee”), as amended as of January 30,2007, is hereby further amended as follows:

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## 1.                                     Section VIof the Agreement is hereby amended by adding the following sentence at the endof subsection (b) thereof:

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“In order to be eligibleto receive the Termination Benefits, Employee must execute the release withinforty-five (45) days of Employee’s receipt of such release.”

 

## 2.                                     Section VIof the Agreement is hereby further amended by adding the following subsection (e) immediatelyfollowing subsection (d):

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“(e)                            Anythingin this Agreement to the contrary notwithstanding, in the event that anycompensation, payment or distribution by Employer to or on behalf of Employee,whether paid or payable or distributed or distributable pursuant to the termsof this Agreement or otherwise (the “Severance Payments”) would besubject to the excise tax imposed by Section 4999 of the Internal RevenueCode of 1986, as amended (the “Code” and such excise tax, together withany interest or penalties incurred by Employee with respect to such excise tax,the “Excise Tax”), the following provisions shall apply:

 

(i)                                     Ifthe Severance Payments, reduced by the sum of (A) the Excise Tax and (B) thetotal of the federal, state, and local income and employment taxes payable byEmployee on the amount of the Severance Payments which is in excess of theThreshold Amount (defined below), are greater than or equal to the ThresholdAmount, Employee shall be entitled to the full benefits payable under thisAgreement.

 

(ii)                                  Ifthe Threshold Amount is less than (x) the Severance Payments, but greaterthan (y) the Severance Payments reduced by the sum of (A) the ExciseTax and (B) the total of the federal, state, and local income andemployment taxes on the 

 

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amount of the SeverancePayments which is in excess of the Threshold Amount, then the benefits payableunder this Agreement shall be reduced (but not below zero) to the extentnecessary so that the sum of the Severance Payments shall not exceed theThreshold Amount.

 

For the purposes of thissubsection (e), “Threshold Amount” shall mean three times Employee’s “baseamount” within the meaning of Section 280G(b)(3) of the Code and theregulations promulgated thereunder less one dollar ($1.00).

 

The determination as towhich of the alternative provisions of subsection (e) above shall apply toEmployee shall be made by a nationally recognized accounting firm selected byEmployer (the “Accounting Firm”), which shall provide detailedsupporting calculations both to Employer and Employee within 15 business daysof the date on which Employee’s employment is terminated, if applicable, or atsuch earlier time as is reasonably requested by Employer or Employee.  For purposes of determining which of thealternative provisions of subsection (e) above shall apply, Employee shallbe deemed to pay federal income taxes at the highest marginal rate of federalincome taxation applicable to individuals for the calendar year in which thedetermination is to be made, and state and local income taxes at the highestmarginal rates of individual taxation in the state and locality of Employee’sresidence on the date on which Employee’s employment is terminated, net of themaximum reduction in federal income taxes which could be obtained fromdeduction of such state and local taxes. Any determination by the Accounting Firm shall be binding upon Employerand Employee.”

 

## 3.                                     TheAgreement is hereby amended by adding the following Section XIIimmediately following Section XI:

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“XII.                    SECTION 409A

 

Anything in thisAgreement to the contrary notwithstanding, if at the time of Employee’sseparation from service within the meaning of Section 409A of the Code,Employer determines that Employee is a “specified employee” within the meaningof Section 409A(a)(2)(B)(i) of the Code, then to the extent anypayment or benefit that Employee becomes entitled to under this Agreement wouldbe considered deferred compensation subject to the 20 percent additional taximposed pursuant to Section 409A(a) of the Code as a result of theapplication of Section 409A(a)(2)(B)(i) of the Code, such paymentshall not be payable and such benefit shall 

 

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not be provided until thedate that is the earlier of (a) six months and one day after Employee’sseparation from service, or (b) Employee’s death.”

 

# B.                                   Exceptas amended herein, the Agreement is hereby confirmed in all other respects.

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IN WITNESS WHEREOF, this Second Amendment is enteredinto this 13th day of April, 2008 by the parties hereto.

 
|   | CLAYTON HOLDINGS, INC. |
|--------|------------------------|
|   |                   |   |
|   |                   |   |
|   | By:                    | */s/ Steven Cohen* |
|   |                   | Name: | Steven Cohen |
|   |                   | Title: | SVP |
|   |                   |   |
|   | By:                    | */s/ Frederick C. Herbst* |
|   |                   | Frederick  C. Herbst |   |
|        |                        |  |  |  |  |

 

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