CAMINUS CORP, S-1/A, 2000-01-21

CAMINUS CORP
S-1/A, 2000-01-21
BUSINESS SERVICES, NEC

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 21, 2000

REGISTRATION NO. 333-88437
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 4

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

CAMINUS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------

<TABLE>
<S> <C> <C>
DELAWARE 7372 13-4081739
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

------------------------
747 THIRD AVENUE
NEW YORK, NEW YORK 10017
(212) 888-3600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

DAVID M. STONER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CAMINUS CORPORATION
747 THIRD AVENUE
NEW YORK, NEW YORK 10017
(212) 888-3600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:

<TABLE>
<S> <C>
JOHN A. BURGESS, ESQ. STEVEN P. ROSENTHAL, ESQ.
JAMES R. BURKE, ESQ. MINTZ, LEVIN, COHN, FERRIS,
HALE AND DORR LLP GLOVSKY AND POPEO, P.C.
60 STATE STREET ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02109 BOSTON, MASSACHUSETTS 02111
TELEPHONE: (617) 526-6000 TELEPHONE: (617) 542-6000
TELECOPY: (617) 526-5000 TELECOPY: (617) 542-2241
</TABLE>

------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date hereof.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ------------------

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ------------------

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ------------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING OFFERS TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED JANUARY 21, 2000

[CAMINUS LOGO]
- --------------------------------------------------------------------------------

4,372,000 SHARES

COMMON STOCK
- --------------------------------------------------------------------------------

This is Caminus Corporation's initial public offering. We are offering 3,572,235
shares of common stock, and the selling stockholders identified in this
prospectus are offering 799,765 shares of common stock.

We expect that the public offering price will be between $13.00 and $15.00 per
share.

We have filed an application for our common stock to be quoted on the Nasdaq
National Market under the symbol "CAMZ."

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 8.

THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS, PROCEEDS,
PRICE TO DISCOUNTS AND BEFORE EXPENSES, BEFORE EXPENSES,
PUBLIC COMMISSIONS TO CAMINUS TO SELLING STOCKHOLDERS
<S> <C> <C> <C> <C>
Per Share $ $ $ $
Total $ $ $ $
</TABLE>

We and the selling stockholders have granted the underwriters the right to
purchase up to 655,800 shares to cover any over-allotments, at any time until 30
days after the date of this prospectus.

DEUTSCHE BANC ALEX. BROWN
BEAR, STEARNS & CO. INC.
CIBC WORLD MARKETS

THE DATE OF THIS PROSPECTUS IS , 2000.
<PAGE> 3

[PICTURES AND CAPTIONS FOR INSIDE FRONT COVER.]

[In the top left corner of the page is the Caminus logo. Directly below the logo
is the phrase, "A leading provider of software solutions and strategic advice to
participants in competitive energy markets.
To the right of this phrase are three phrases as follows:
"Make strategic decisions in competitive energy markets"
"Trade energy commodities and manage energy transactions"
"Manage complex energy risk scenarios"
Below the four phrases is a large box. In the center of the box is a large oval
graphic. Against a dark background is a series of interlocking lines connecting
ten terms. The terms are arranged in a circular pattern as follows: "Utilities,"
"Generators," "Processors," "Marketers," "Local Distribution Companies,"
"Retailers," "Pipelines," "Transmission Companies," "Municipalities" and
"Producers."
In the center of the interconnecting lines is the Caminus Corporation logo.
Directly above and below the circular graphic are snapshots of power plants and
workers in the energy industry.
Running along the bottom of the box are five small boxes which contain the
following terms: "Energy Trading," "Risk Management," "Analytics," "Scheduling
Systems" and "Strategic Consulting."]

2
<PAGE> 4

PROSPECTUS SUMMARY

This summary may not contain all of the information that is important to
you. You should read the entire prospectus, including "Risk Factors" and the
financial statements and related notes, before deciding to invest in our common
stock.

CAMINUS CORPORATION

The energy industry is currently one of the five largest vertical markets
in the United States, with 1998 revenue of approximately $300 billion. As a
result of global deregulation in the energy industry, vertically integrated
suppliers are breaking up and energy trading is becoming more complex. New
participants are entering the market, and trading volumes, price volatility and
risk exposure are increasing significantly. In order to compete, energy market
participants must find information technology solutions and services that are
targeted to address the risks associated with buying, selling and trading
multiple energy commodities in deregulating markets.

Our Zai*Net suite of software products enables energy market participants
to trade, process transactions and manage risk from the wholesale acquisition of
energy through its sale and scheduling. Using our software solutions, energy
market participants can analyze and manage risk among multiple energy
commodities, traded via various energy trading instruments, across varied
geographies.

Our strategic consulting practice provides energy market participants with
strategic advice on the deregulation and restructuring of the energy industry.
We assist energy companies with global operations in choosing and implementing
long-term strategies to remain competitive, including decisions relating to the
appropriate use of energy assets and the most effective operating strategies in
deregulating energy markets. We have significant expertise in economics,
regulation and strategy, and have been at the forefront of changes in the United
Kingdom energy sector, which has one of the most deregulated natural gas and
electric power markets in the world.

We currently have approximately 100 energy enterprise customers of our
software solutions and strategic consulting services. Many of our customers are
leaders in the energy industry, including American Electric Power, Consolidated
Edison, Conoco, PG&E Energy Trading, Preussen Elektra and TXU Electric and Gas.
3
<PAGE> 5

THIS OFFERING

Common stock offered by Caminus.......... 3,572,235 shares

Common stock offered by the selling
stockholders........................... 799,765 shares

Common stock to be outstanding after this
offering............................... 14,609,212 shares

Use of proceeds.......................... - Repayment of borrowings under
our credit facility

- Payment of a consulting and
advisory termination fee to GFI

- Special bonus payments

- Working capital

- Other general corporate purposes,
including possible acquisitions

Proposed Nasdaq National Market symbol... CAMZ

The number of shares of our common stock that will be outstanding after
this offering excludes 926,258 and 28,572 shares subject to outstanding options
under our 1998 and 1999 stock incentive plans, respectively, at a weighted
average exercise price of $4.76 per share and 568,978 additional shares
available for issuance under our stock plans.

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell shares of common stock and
seeking offers to buy shares of common stock only in jurisdictions where offers
and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or any sale of the common stock.
------------------------

We were originally organized in April 1998 as a Delaware limited liability
company under the name "GFI Caminus LLC." We changed our name to "Caminus Energy
Ventures LLC" in September 1998 and "Caminus LLC" in January 1999. Immediately
prior to this offering, the limited liability company will merge with and into
Caminus Corporation, a Delaware corporation incorporated in September 1999. Our
principal executive offices are located at 747 Third Avenue, New York, New York
10017 and our telephone number is (212) 888-3600. Our World Wide Web site
address is www.caminus.com. The information in the Web site is not incorporated
by reference into this prospectus. For additional information regarding our
initial formation and subsequent acquisitions, please see "Caminus Corporation"
below.

GFI Energy Ventures, LLC and its affiliated entities, which are
collectively referred to in this prospectus as GFI, and an affiliate of Oaktree
Capital Management, LLC originated and were the principal investors in the
transactions that created us. RIT Capital Partners plc -- the publicly traded,
London-based investment company chaired by Lord Rothschild -- is also a
substantial investor.
4
<PAGE> 6

SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables present summary consolidated, pro forma and pro forma
as adjusted financial data for us and our predecessor, Zai*Net Software, Inc.
The consolidated financial data, except for the pro forma data, are based on the
historical financial statements of us and our predecessor for the year ended
December 31, 1997, for the four months ended April 30, 1998 and for the period
from our inception (April 29, 1998) through December 31, 1998, which are derived
from the respective audited consolidated financial statements of us and our
predecessor. The consolidated financial data from our inception through
September 30, 1998 and as of and for the nine months ended September 30, 1999
are derived from our unaudited consolidated financial statements and include, in
the opinion of our management, all adjustments, consisting only of normal
recurring adjustments, that are necessary for the fair presentation of our
financial position and results of operations as of and for such periods. The pro
forma financial data give effect to the acquisitions of Zai*Net, Caminus Energy
Limited, which is now known as Caminus Limited, and DC Systems, Inc. as if the
acquisitions had occurred at the beginning of the respective periods presented.
The pro forma financial data do not give retroactive effect to our acquisition
of Positron Energy Consulting, whose results of operations prior to the
acquisition were immaterial to our results of operations. The following summary
historical and pro forma financial data should be read together with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and related notes included elsewhere in
this prospectus.

In the following table, "Adjusted EBITDA" is defined as earnings before
interest and other income, income taxes, depreciation, amortization, acquired
in-process research and development, non-cash compensation expense and
terminated acquisition costs. Terminated acquisition costs represent costs
associated with a potential acquisition that we ultimately decided not to
pursue. EBITDA is a non-GAAP measure commonly used by investors and analysts to
analyze companies on the basis of operating performance, leverage and liquidity.
We present Adjusted EBITDA, which is also a non-GAAP measure, to enhance the
understanding of our operating results. We believe Adjusted EBITDA is an
indicator of our operating profitability since it excludes items which are not
directly attributable to our ongoing business operations. However, Adjusted
EBITDA relies upon management's judgment to determine which items are directly
attributable to our ongoing business operations and as such is subjective in
nature. Neither EBITDA nor Adjusted EBITDA should be construed as an alternative
to net income as an indicator of a company's operating performance or as an
alternative to cash flow from operations as a measure of a company's liquidity.
For information about cash flows or results of operations in accordance with
generally accepted accounting principles, please see the audited consolidated
financial statements included elsewhere in this prospectus.

The pro forma balance sheet data as of September 30, 1999 below give effect
to the issuance of an aggregate of 57,486 shares of common stock in November
1999 to three employees in connection with our acquisition of Positron, the
issuance upon the closing of this offering of 160,209 shares of common stock to
David M. Stoner as a bonus for his services, the forgiveness of Mr. Stoner's
$1,000,000 loan, which was previously recorded, and the issuance of an aggregate
5
<PAGE> 7

of 1,581,194 shares of common stock upon the expected exercise prior to or in
connection with this offering of options to purchase common stock issued to GFI,
Nigel L. Evans, Michael Morrisson and SS&C Technologies, Inc.

The pro forma as adjusted balance sheet data as of September 30, 1999 give
effect to our sale of 3,572,235 shares of common stock in this offering, at an
assumed initial public offering price of $14.00 per share, after deducting
estimated underwriting discounts and our estimated offering expenses and after
the application of a portion of the proceeds to pay a special one-time bonus to
Nigel L. Evans and Michael Morrison, pay GFI a termination fee for its
consulting and advisory services and repay borrowings under our credit facility.
6
<PAGE> 8
<TABLE>
<CAPTION>
ZAI*NET
(PREDECESSOR) CAMINUS
------------------------- -----------------------------------------------------------
INCEPTION PRO FORMA INCEPTION
FOUR (APRIL 29, TWELVE (APRIL 29, NINE
MONTHS 1998) MONTHS 1998) MONTHS
YEAR ENDED ENDED THROUGH ENDED THROUGH ENDED
DECEMBER 31, APRIL 30, DECEMBER 31, DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1997 1998 1998 1998 1998 1999
------------ ---------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Licenses..................... $1,521,447 $1,495,221 $ 3,639,143 $ 5,455,014 $ 1,925,858 $ 8,088,621
Software services............ 2,667,807 1,334,473 3,090,758 4,947,199 1,881,417 5,679,513
Strategic consulting......... -- -- 2,896,102 4,354,096 1,720,550 4,757,425
---------- ---------- ------------ ------------ ----------- -----------
Total revenues............. 4,189,254 2,829,694 9,626,003 14,756,309 5,527,825 18,525,559
---------- ---------- ------------ ------------ ----------- -----------
Acquired in-process research
and development.............. -- -- 4,822,000 -- 3,053,000 1,000,000
Operating income (loss)........ (4,236) 436,030 (10,133,366) (13,272,778) (4,489,767) (5,781,600)
Net income (loss).............. 13,355 420,508 (10,371,188) (13,319,684) (4,680,440) (6,242,750)
Basic and diluted net loss per
common share................. $ (1.41) $ (1.76) $ (0.65) $ (0.76)
Weighted average shares --
basic and diluted............ 7,360,634 7,578,987 7,215,030 8,264,075
OTHER DATA:
Cash provided by (used in)
operating activities......... $ 401,048 $1,053,662 $ 951,676 $ 456,381 $ (932,513)
Cash used in investing
activities................... 206,245 99,881 10,892,906 10,264,424 10,719,054
Cash provided by (used in)
financing activities......... (290,050) (3,000) 12,699,637 12,874,999 9,693,866
Adjusted EBITDA................ 118,854 482,171 355,155 $ 397,280 382,350 2,079,747

CAMINUS
-------------
PRO FORMA
NINE
MONTHS
ENDED
SEPTEMBER 30,
1999
-------------
<S> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Licenses..................... $ 8,129,621
Software services............ 5,981,134
Strategic consulting......... 4,757,425
------------
Total revenues............. 18,868,180
------------
Acquired in-process research
and development.............. --
Operating income (loss)........ (11,843,964)
Net income (loss).............. (12,308,591)
Basic and diluted net loss per
common share................. $ (1.46)
Weighted average shares --
basic and diluted............ 8,405,529
OTHER DATA:
Cash provided by (used in)
operating activities.........
Cash used in investing
activities...................
Cash provided by (used in)
financing activities.........
Adjusted EBITDA................ $ 1,738,853
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
---------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
----------- ----------- -----------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 801,351 $ 2,125,329 $44,010,829
Total assets................................................ 40,868,631 42,192,609 84,078,109
Borrowings under credit facility, net of current portion.... 1,000,000 1,000,000 --
Current portion of borrowings under credit facility......... 1,000,000 1,000,000 --
Stockholders' equity........................................ 27,050,273 27,662,471 71,547,971
</TABLE>

------------------------

All information in this prospectus assumes our reorganization as a
corporation immediately prior to this offering, and the conversion of each
membership interest in the limited liability company into .095238 of one share
of common stock of the corporation. Except as set forth in the financial
statements and related notes or as otherwise indicated, all information in this
prospectus assumes:

- no exercise of the underwriters' over-allotment option;

- the issuance of an aggregate of 57,486 shares of common stock in November
1999 to three employees in connection with the acquisition of Positron
Energy Consulting;

- the issuance upon the closing of this offering of 160,209 shares of
common stock to David M. Stoner, our President and Chief Executive
Officer, as a bonus for his services; and

- the exercise prior to or in connection with this offering of options to
purchase common stock issued to GFI, Nigel L. Evans, Michael Morrison and
SS&C Technologies, Inc.

We use the following registered trademarks: Caminus(R) and Zai*Net(R). We
also use the following trademarks: Zai*Net Manager(TM), Zai*Net Risk
Analytics(TM), Zai*Net Physicals(TM), Zai*Net Models(TM), PowerMarkets(TM),
PowerOptions(TM), GasOptions(TM), ProjectFinance(TM), Zai*Net Weather Delta(TM),
Gas*Master(TM), Power*Master(TM) and Plant*Master(TM). This prospectus also
contains trademarks and registered trademarks of other companies, which are the
property of those other companies.
7
<PAGE> 9

RISK FACTORS

You should consider carefully the following Risk Factors and all other
information contained in this prospectus before purchasing our common stock.
Investing in our common stock involves a high degree of risk. Any of the
following risks could materially harm our business and could result in a
complete loss of your investment.

RISKS RELATED TO OUR BUSINESS

WE HAVE A LIMITED HISTORY AS A COMBINED OPERATING ENTITY THAT PROVIDES BOTH
SOFTWARE SOLUTIONS AND STRATEGIC CONSULTING SERVICES, AND WE MAY FACE
DIFFICULTIES ENCOUNTERED BY RECENTLY COMBINED COMPANIES THAT OPERATE IN
DIFFERENT GEOGRAPHIC REGIONS AND PROVIDE VARIED PRODUCTS AND SERVICES

In April 1998, we were organized as a limited liability company for the
purpose of acquiring Zai*Net Software, L.P., a software company based in New
York, and Caminus Limited, a strategic consulting practice based in Cambridge,
England. Accordingly, we have a limited history of combined operations and may
face difficulties encountered by recently combined companies that operate in
different geographic regions and provide varied products and services,
especially in rapidly evolving markets such as the energy market. Please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" for detailed information on our limited operating history.

YOU SHOULD NOT RELY ON OUR HISTORICAL AND PRO FORMA FINANCIAL INFORMATION IN
DECIDING WHETHER TO INVEST IN OUR COMMON STOCK, BECAUSE SUCH INFORMATION MAY NOT
BE REPRESENTATIVE OF OUR RESULTS AS A COMBINED COMPANY

The pro forma financial information included in this prospectus combines
the operating results of Zai*Net Software, Inc., Caminus Limited and DC Systems,
Inc. This information may not reflect what our results of operations, financial
position and cash flows would have been had we been a combined entity during the
periods presented, or what our results of operations, financial position and
cash flows will be in the future. The historical and pro forma financial
information does not reflect many significant changes that have occurred or may
occur in our operational arrangements as a combined entity. Accordingly, you
should not rely on our historical and pro forma financial information as an
indication of our future operating results or financial performance.

WE EXPECT OUR RESULTS OF OPERATIONS TO FLUCTUATE AND THE PRICE OF OUR COMMON
STOCK COULD FALL IF QUARTERLY RESULTS ARE LOWER THAN THE EXPECTATIONS OF
SECURITIES ANALYSTS

Our revenues and results of operations have fluctuated in the past and may
vary from quarter to quarter in the future. If our quarterly results fall below
the expectations of securities analysts, the price of our common stock could
fall. A number of factors, many of which are outside our control, may cause
variations in our results of operations, including:

- demand for our software solutions and strategic consulting services

- the timing and recognition of sales of our products and services

8
<PAGE> 10

- unexpected delays in developing and introducing new products and services

- increased expenses, whether related to sales and marketing, product
development or administration

- changes in the rapidly evolving market for products and services in the
energy industry

- the mix of revenues derived from products and services

- the hiring, retention and utilization of personnel

- the mix of domestic and international revenues

- costs related to possible acquisitions of technologies or businesses

- general economic factors

- changes in the revenue recognition policies required by generally
accepted accounting principles

Accordingly, we believe that quarter-to-quarter comparisons of our results
of operations are not necessarily meaningful. You should not rely on the results
of one quarter as an indication of our future performance.

A substantial portion of our operating expenses is related to personnel
costs, marketing programs and overhead, which cannot be adjusted quickly and are
therefore relatively fixed in the short term. Our operating expense levels are
based, in significant part, on our expectations of future revenues on a
quarterly basis. As a result, if revenues for a particular quarter are below our
expectations, we may not be able to reduce operating expenses proportionately
for that quarter, and therefore this revenue shortfall would have a
disproportionately negative effect on our operating results and cash flows for
that quarter.

In addition, we plan to increase our operating expenses to expand our sales
and marketing operations, fund greater levels of research and development,
broaden strategic consulting and software services and improve our operational
and financial systems. If our revenues do not increase as quickly as these
expenses, our results of operations and cash flows may suffer and our stock
price may decline.

OUR LENGTHY SALES CYCLE MAKES IT DIFFICULT TO PREDICT OUR QUARTERLY RESULTS AND
THE PRICE OF OUR COMMON STOCK COULD FALL IF QUARTERLY RESULTS ARE LOWER THAN THE
EXPECTATIONS OF SECURITIES ANALYSTS

Our long sales cycle, which can range from six to nine months or more,
makes it difficult to predict the quarter in which sales may occur or revenues
may be recognized. Our sales cycle varies depending on the size and type of
customer considering a purchase and whether we have conducted business with a
potential customer in the past. These potential customers frequently need to
obtain internal approvals from multiple decision makers prior to making purchase
decisions. Delays in sales could cause significant variability in our revenues
and results of operations for any particular period. If our quarterly results
and cash flows fall below the expectations of securities analysts, our stock
price may decline.

9
<PAGE> 11

WE MAY NOT BE ABLE TO OBTAIN OR SUSTAIN MARKET ACCEPTANCE FOR OUR PRODUCTS AND
SERVICES

Because the market for products and services in the energy industry is
rapidly evolving, a viable market for our products and services may not be
sustainable. We may not be able to continue to develop products and services
that serve the changing needs of energy market participants in this evolving
market. Organizations that have already invested substantial resources in
proprietary or other third-party solutions for buying, selling or trading energy
assets may be reluctant or slow to adopt a new approach that may replace, limit
or compete with their existing systems. These factors could inhibit the market's
acceptance of our products and services in particular.

THE MARKET FOR PRODUCTS AND SERVICES IN THE ENERGY INDUSTRY IS COMPETITIVE, AND
WE EXPECT COMPETITION TO INTENSIFY IN THE FUTURE; WE MAY NOT BE ABLE TO COMPETE
SUCCESSFULLY

The market for products and services in the energy industry is competitive,
and we expect competition to intensify in the future as participants in the
energy industry try to respond to increasing deregulation. Our primary
competition currently comes from internal development efforts of energy
participants for internal use or for sale to other market participants, vendors
of software solutions and providers of strategic consulting services.

Some of our current and many of our potential competitors have or may have
longer operating histories and significantly greater financial, technical,
marketing and other resources than we do, and may be able to respond more
quickly than we can to new or changing opportunities, technologies and customer
requirements. Also, our current and potential competitors have or may have
greater name recognition and more extensive customer bases that they can
leverage to gain market share. These competitors may be able to undertake more
extensive promotional activities, adopt more aggressive pricing policies and
offer more attractive terms to purchasers than we can. In addition, our current
and potential competitors have established or may establish cooperative
relationships among themselves or with third parties to enhance their products
and services and expand their markets. Accordingly, new competitors or alliances
among competitors may emerge and rapidly acquire significant market share.
Increased competition could result in price reductions, reduced revenues and the
loss of customers, which could result in increased losses or reduced profits.

WE MAY NOT BE ABLE TO SUFFICIENTLY EXPAND OUR SALES AND DISTRIBUTION
CAPABILITIES AND STRATEGIC CONSULTING SERVICES IN ORDER TO INCREASE MARKET
AWARENESS OF OUR PRODUCTS AND SERVICES AND INCREASE OUR REVENUES

We must expand our direct sales operations and strategic consulting
services in order to increase market awareness of our products and services and
generate increased revenues. We require sales and consulting personnel with
significant subject matter expertise in the energy industry. We may not be able
to hire a sufficient number of sales and consulting personnel in a timely,
cost-effective manner. Moreover, all of our strategic consultants are currently
based in Europe, and we may encounter significant start-up costs in connection
with establishing strategic consulting operations in the United States.

10
<PAGE> 12

OUR REVENUES ARE SUBSTANTIALLY DEPENDENT UPON SALES OF A LIMITED NUMBER OF
SOFTWARE PRODUCTS AND RELATED SERVICES

Factors adversely affecting the pricing of or demand for our products and
services, such as competition or technological change, could have a material
adverse effect on our business, financial condition and results of operations.
To date, a significant percentage of our revenues has come from licensing our
Zai*Net Manager, Zai*Net Risk Analytics, Zai*Net Physicals and Zai*Net Models
software and providing related services. We currently expect that these
activities will account for a significant percentage of our revenues for the
foreseeable future. Our future financial performance will depend, in large part,
on the continued market acceptance of our existing products and the successful
development, introduction and customer acceptance of new or enhanced versions of
our software products and services, including the end-to-end energy software
solution that we are developing with ABB Energy Information Systems. We may not
be successful in developing and marketing our Zai*Net Manager, Zai*Net Risk
Analytics, Zai*Net Physicals and Zai*Net Models software.

WE MAY NOT BE ABLE TO MANAGE OUR EXPANDING OPERATIONS

Rapid growth in numerous geographic regions has placed and will continue to
place a significant demand on our management, financial and operational
resources. Such demands have already required us and may require us in the
future to engage third-party resources over which we have limited control to
assist us in implementing our growth strategy. We have expanded our operations
rapidly and currently have three offices in the United States and two in the
United Kingdom. We intend to continue to expand our U.S. and international
operations in the foreseeable future to pursue existing and potential market
opportunities and to support our growing customer base. In order to manage
growth effectively, we must implement and improve our operational systems,
procedures and controls on a timely and cost-effective basis. If we fail to
improve our operational systems in a timely and cost-effective manner, we could
experience customer dissatisfaction, cost inefficiencies and lost revenue
opportunities.

WE FACE RISKS ASSOCIATED WITH OUR INTERNATIONAL OPERATIONS AND PLANS FOR
EXPANSION

One of our key strategies is to continue to expand our international
operations and sales and marketing efforts. If we are unsuccessful, we may lose
customers that operate globally, which will adversely affect our results of
operations. In addition, international operations are subject to inherent risks
that may limit our international expansion or cause us to incur significant
costs to compete effectively in international markets. These include:

- the need to comply with the laws and regulations of different countries

- difficulties in enforcing contractual obligations and intellectual
property rights in some countries

- difficulties and costs of staffing and managing foreign operations

- fluctuations in currency exchange rates and the imposition of exchange or
price controls or other restrictions on the conversion of foreign
currencies

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<PAGE> 13

- difficulties in collecting international accounts receivable and the
existence of potentially longer payment cycles

- language and cultural differences

- local economic conditions in foreign markets

WE MAY NOT BE ABLE TO INTEGRATE THE OPERATIONS FROM OUR RECENT AND FUTURE
ACQUISITIONS

As part of our business strategy, we have completed and expect to enter
into additional business combinations and acquisitions, such as our July 1999
acquisition of DC Systems, Inc.

Acquisition transactions are accompanied by a number of risks, including,
among other things:

- the difficulty of assimilating the operations and personnel of the
acquired companies

- the potential disruption of our ongoing business

- expenses associated with the transactions, including expenses associated
with amortization of acquired intangible assets

- the potential unknown liabilities associated with acquired businesses

IF NEW MEMBERS OF OUR SENIOR MANAGEMENT ARE NOT SUCCESSFULLY INTEGRATED WITH OUR
MANAGEMENT TEAM, WE MAY NOT BE ABLE TO SUCCESSFULLY MANAGE OUR BUSINESS

Several members of our senior management recently joined us and have not
previously worked together. David M. Stoner, our chief executive officer, joined
us in October 1998, and Mark A. Herman, our chief financial officer, joined us
in February 1999. In addition, two of our founders, Nigel L. Evans, our senior
vice president and head of European operations, and Brian J. Scanlan, our chief
technology officer, have been working together only since our acquisitions of
Caminus Limited and Zai*Net Software, L.P. in May 1998. As a result, our senior
managers are still becoming integrated as a management team and may not work
effectively as a team to successfully manage our business.

IF WE FAIL TO ADAPT TO RAPID CHANGES IN THE ENERGY MARKET, OUR EXISTING PRODUCTS
COULD BECOME OBSOLETE

The market for our products is marked by rapid changes in the regulatory
environment, new product introductions and related technology enhancements,
uncertain product life cycles, changes in customer demands and evolving industry
standards. We may not be able to successfully develop and market new products or
product enhancements that comply with present or emerging technology standards.
Also, any new regulation or technology standard could increase our cost of doing
business.

New products based on new technologies or new industry standards could
render our existing products obsolete and unmarketable. To succeed, we will need
to enhance our current products and develop new products on a timely basis to
keep pace with developments related to the energy market and to satisfy the

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<PAGE> 14

increasingly sophisticated requirements of customers. Software addressing the
trading and management of energy assets is complex and can be expensive to
develop, and new products and product enhancements can require long development
and testing periods. Any delays in developing and releasing enhanced or new
products could cause us to lose revenue opportunities and customers and could
increase the cost of doing business.

OUR SOFTWARE PRODUCTS MAY CONTAIN ERRORS OR DEFECTS THAT COULD RESULT IN LOST
REVENUES, DELAYED OR LIMITED MARKET ACCEPTANCE OR PRODUCT LIABILITY CLAIMS WITH
SUBSTANTIAL LITIGATION COSTS

Complex software products such as ours often contain errors or defects,
particularly when first introduced or when new versions or enhancements are
released. Despite internal testing and testing by customers, our current and
future products may contain serious defects, including Year 2000 errors. Serious
defects or errors could result in lost revenues or a delay in market acceptance.

Because our customers use our products for critical business applications,
errors, defects or other performance problems could result in damage to our
customers. They could seek significant compensation for losses from us. Although
our license agreements typically contain provisions designed to limit our
exposure to product liability claims, existing or future laws or unfavorable
judicial decisions could negate these limitations. Even if not successful, a
product liability claim brought against us would likely be costly and
time-consuming, which would require our management to spend time defending the
claim rather than operating our business.

UNAUTHORIZED PARTIES MAY OBTAIN AND PROFIT FROM OUR SOFTWARE, DOCUMENTATION AND
OTHER PROPRIETARY INFORMATION

We seek to protect the source code for our proprietary software both as a
trade secret and as a copyrighted work. Our policy is to enter into
confidentiality agreements with our employees, consultants, vendors and
customers and to control access to our software, documentation and other
proprietary information.

Despite our efforts to protect our proprietary rights, unauthorized parties
may attempt to copy aspects of our products or obtain and use information that
we regard as proprietary. Policing unauthorized use of our products is
difficult, and while we are unable to determine the extent to which piracy of
our software products exists, such piracy can be expected to be a persistent
problem, particularly in international markets where the laws of foreign
countries are not as protective as they are in the U.S. Our trade secrets or
confidentiality agreements may not provide meaningful protection of our
proprietary information. We are aware of competitors which offer similar
functionality in their products. We can provide no assurance that others will
not independently develop similar technologies or duplicate any technology
developed by us.

We rely on outside licensors for technology that is incorporated into and
is necessary for the operation of our products. Our success will depend in part
on our continued ability to have access to such technologies that are or may
become important to the functionality of our products.

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<PAGE> 15

OTHERS MAY CLAIM THAT WE INFRINGE ON THEIR INTELLECTUAL PROPERTY RIGHTS, WHICH
MAY LIMIT OUR ABILITY TO CONDUCT OUR BUSINESS

As the number of software products in the energy industry increases and the
functionality of products from different software developers further overlaps,
software developers and publishers may increasingly become subject to claims of
infringement or misappropriation of the intellectual property or proprietary
rights of others. Although we are not currently subject to any claims of
infringement, third parties may assert infringement or misappropriation claims
against us in the future with respect to current or future products. Further, we
may be subject to additional risks as we enter into transactions in countries
where intellectual property laws are not well developed or are poorly enforced.
Legal protections of our rights may be ineffective in such countries, and
technology developed in such countries may not be protectable in jurisdictions
where protection is ordinarily available. In addition, we are obligated to
indemnify customers against claims that we infringe the intellectual property
rights of third parties. The results of any intellectual property litigation to
which we might become a party may force us to do one or more of the following:

- cease selling or using products or services that incorporate the
challenged intellectual property

- obtain a license, which may not be available on reasonable terms or at
all, to sell or use the relevant technology

- redesign those products or services to avoid infringement

- refund license fees that we have previously received

OUR BUSINESS MAY BE HARMED IF WE LOSE THE SERVICES OF DAVID STONER, BRIAN
SCANLAN, NIGEL EVANS, RICHARD COURON OR OTHER KEY EMPLOYEES

Our success depends largely on the skills, experience and performance of
key employees, particularly David Stoner, our chief executive officer, Brian
Scanlan and Nigel Evans, two of our founders, and Richard Couron, the founder of
DC Systems. These employees have significant expertise in the energy industry
and would be difficult to replace. Our employment agreements with Messrs. Stoner
and Scanlan and Dr. Evans expire in 2001. If we lose one or more of our key
employees, our business could be harmed.

IF WE FAIL TO CONTINUE TO ATTRACT AND RETAIN PERSONNEL WITH SALES EXPERIENCE,
SOFTWARE DEVELOPMENT SKILLS AND SUBJECT MATTER EXPERTISE IN THE ENERGY MARKET,
OUR BUSINESS MAY BE HARMED

Our future success will depend in large part on our ability to continue
attracting and retaining highly skilled personnel, particularly salespeople,
software developers and consultants who are both experts in their particular
fields and have strong customer relationship skills. In particular, the number
of people with significant knowledge about evolving energy markets is limited.
Newly hired employees will require training and it will take time for them to
achieve full productivity. We face intense competition in recruiting and may not
be able to hire enough qualified individuals in the future, and newly hired
employees may not achieve necessary levels of productivity.

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<PAGE> 16

WE MAY NEED ADDITIONAL FINANCING WHICH COULD BE DIFFICULT TO OBTAIN AND WHICH
COULD DILUTE YOUR OWNERSHIP INTEREST OR THE VALUE OF YOUR SHARES

We intend to grow our business rapidly and may require significant external
financing in the future. Obtaining additional financing will be subject to a
number of factors, including:

- market conditions

- our operating performance

- investor sentiment, particularly with respect to the emerging energy
market

These factors may make the timing, amount, terms and conditions of
additional financing unattractive for us. If we are unable to raise capital to
fund our operations, we may not be able to successfully grow our business.

If we raise additional funds through the sale of equity or convertible debt
securities, your percentage ownership will be reduced. In addition, these
transactions may dilute the value of our outstanding stock. We may have to issue
securities that have rights, preferences and privileges senior to our common
stock.

WE MAY BE ADVERSELY AFFECTED BY THE YEAR 2000 ISSUE

The "Year 2000 Issue" refers generally to the problems that software may
have in determining the correct century for the year. For example, software with
date-sensitive functions that are not Year 2000 compliant may not be able to
distinguish whether "00" means 1900 or 2000, which may result in failures or the
creation of erroneous results. We are subject to potential Year 2000 problems
affecting our products, our internal systems and the systems of our suppliers
and customers, any of which could disrupt our business and adversely affect our
results of operations.

Although we are not currently aware of any Year 2000 problems relating to
our products, we may discover Year 2000 problems in our products that will
require substantial revision and could subject us to liability claims. Our
products operate in complex network environments and directly or indirectly
interact with a number of other hardware and software systems that we cannot
adequately evaluate for Year 2000 problems. In addition, technology developed by
others and incorporated in our products could have Year 2000 problems. We may
face claims based on Year 2000 problems in other companies' products, or issues
arising from the integration of multiple products within an overall system even
if our products are otherwise year 2000 compliant.

Our failure to fix or replace our internally developed proprietary software
or third-party software, hardware or services on a timely basis could result in
lost revenues, increased operating costs, the loss of customers and other
business interruptions, any of which could seriously harm our business. Even if
we do not face Year 2000 problems, customers may delay new purchases of our
products until they have assessed their own Year 2000 exposure, which could
adversely affect our results of operations. Moreover, our failure to adequately
address Year 2000 compliance issues in our internally developed proprietary
software could result in claims of mismanagement, misrepresentation or breach of
contract and related litigation, which could be costly and time-consuming to
defend.

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<PAGE> 17

RISKS RELATED TO THE ENERGY INDUSTRY

OUR PERFORMANCE WILL DEPEND ON THE CONTINUED GROWTH IN DEMAND FOR ENERGY
PRODUCTS AND SERVICES

Our future success depends heavily on the continued growth in demand for
energy products and services, which is difficult to predict. If demand for
energy products and services does not continue to grow or grows more slowly than
expected, demand for our products and services will be reduced. Because a
substantial portion of our operating expenses is fixed in the short term, any
unanticipated reduction in demand for our products and services would negatively
impact our operating results. Utilities and other businesses may be slow to
adapt to changes in the energy marketplace or be satisfied with existing
services and solutions. This would cause there to be less demand for our
products and services than we currently expect. The market for energy trading
software and solutions that address the deregulating energy industry is
relatively new, and potential customers may wait for widespread adoption of
products before making purchase commitments. Even if there is significant market
acceptance of products and services for the energy industry, we may incur
substantial expenses adapting our solutions to changing or emerging
technologies.

THE GLOBAL ENERGY INDUSTRY IS SUBJECT TO EXTENSIVE AND VARIED GOVERNMENTAL
REGULATIONS, AND OUR BUSINESS MAY BE ADVERSELY AFFECTED IF WE ARE UNABLE TO
SUCCESSFULLY DEVELOP PRODUCTS AND SERVICES THAT ADDRESS NUMEROUS AND RAPIDLY
CHANGING REGULATORY REGIMES

Although the global energy industry is becoming increasingly deregulated,
the energy industry, which includes utilities, producers, energy marketers,
processors, storage operators, distributors, marketers, pipelines and others, is
still subject to extensive and varied local, national and regional regulation.
If we are unable to design and develop software solutions and strategic
consulting services that address the numerous and changing regulatory
requirements, or fail to alter our products and services rapidly enough, our
customers or potential customers may not purchase our products and services.

OUR FINANCIAL SUCCESS IS CLOSELY LINKED TO THE HEALTH OF THE ENERGY INDUSTRY

We currently derive substantially all of our revenues from licensing our
software and providing strategic consulting services to participants in the
energy industry. Our customers include a number of organizations in the energy
industry, and the success of these customers is linked to the health of the
energy market. In addition, because of the capital expenditures required in
connection with investing in our products and services, we believe that demand
for our products and services could be disproportionately affected by
fluctuations, disruptions, instability or downturns in the energy market, which
may cause customers and potential customers to leave the industry or delay,
cancel or reduce any planned expenditures for our software products and related
strategic consulting services.

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<PAGE> 18

PROJECTIONS INCLUDED IN THIS PROSPECTUS RELATING TO THE GROWTH OF THE ENERGY
INDUSTRY ARE BASED ON ASSUMPTIONS THAT COULD TURN OUT TO BE INCORRECT AND ACTUAL
RESULTS COULD BE MATERIALLY DIFFERENT FROM THE PROJECTIONS

This prospectus contains various data and projections related to revenues
generated by the market for products and services to the energy industry. These
projections include assumptions regarding the expected growth in information
technology spending by energy market participants. Actual results or
circumstances may be materially different from the projections. This could
reduce our revenues and adversely affect anticipated demand for our products and
services. These data and projections are inherently imprecise, and you should
not place undue reliance on them.

RISKS RELATED TO THIS OFFERING

OUR MANAGEMENT WILL HAVE DISCRETION OVER USING THE NET UNALLOCATED PROCEEDS OF
THIS OFFERING

Our board of directors and management will have significant flexibility in
applying the unallocated net proceeds of this offering. As of the date of this
prospectus, we do not have plans for use of most of the proceeds from this
offering. You will be relying on the judgment of our management about these
uses. See "Use of Proceeds."

OUR STOCK PRICE MAY BE VOLATILE

Prior to this offering, investors could not buy or sell our common stock
publicly. An active public market for our common stock may not develop or be
sustained after the offering and the market price might fall below the initial
public offering price. We will be negotiating the initial public offering price
with the representatives of the underwriters based on several factors. This
price may vary from the market price of the common stock after this offering.
Fluctuations in market price and volume are particularly common among technology
companies.

The market price of our common stock may fluctuate significantly in
response to the following factors, some of which are beyond our control:

- variations in quarterly operating results

- announcements, by us or our competitors, of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments

- additions or departures of key personnel

- future sales of common stock

- changes in financial estimates by securities analysts

- loss of a major customer

WE MAY INCUR SIGNIFICANT COSTS FROM CLASS ACTION LITIGATION

In the past, securities class action litigation has often been brought
against a company following periods of volatility in the market price of its
stock. Such volatility has been particularly common in technology companies. We
may in the

17
<PAGE> 19

future be the target of securities litigation. Securities litigation could
result in substantial costs and divert management's attention and resources.

SUBSTANTIAL SALES OF OUR COMMON STOCK COULD CAUSE OUR STOCK PRICE TO DECLINE

If our existing stockholders sell a large number of shares of our common
stock or the public market perceives that existing stockholders might sell
shares of common stock, the market price of the common stock could significantly
decline. All of the shares offered under this prospectus will be freely tradable
without restriction or further registration under the federal securities laws
unless purchased by our "affiliates" as that term is defined in Rule 144 under
the Securities Act of 1933. Of the remaining 10,237,212 shares outstanding at
the time of this offering:

- 27,356 shares may be sold 90 days after the effective date of this
offering

- 8,484,720 additional shares may be sold upon the expiration of 180-day
lock-up agreements

Deutsche Bank Securities Inc., as lead manager of the underwriters, may
release any or all shares from the lock-up agreements at any time and without
notice.

Existing stockholders holding an aggregate of 10,237,212 shares of common
stock have the right to require us to register their shares of common stock with
the Securities and Exchange Commission. If we register their shares of common
stock, they can sell those shares in the public market.

After this offering, we intend to register approximately 1,523,808 shares
of our common stock that we have issued or may issue under our stock plans. Once
we register these shares, they can be freely sold in the public market upon
issuance, subject to the "lock-up" agreements described above and the
restrictions imposed on our affiliates under Rule 144.

OUR EXECUTIVE OFFICERS AND DIRECTORS AND THEIR AFFILIATES WILL BE ABLE TO
EXERCISE CONTROL OVER ALL MATTERS REQUIRING STOCKHOLDER APPROVAL AND COULD MAKE
DECISIONS ABOUT OUR BUSINESS THAT CONFLICT WITH OTHER STOCKHOLDERS' INTERESTS

On completion of this offering, our executive officers and directors and
their affiliates will beneficially own approximately 53.7% of our outstanding
common stock. As a result, these stockholders will be able to exercise control
over all matters requiring stockholder approval even if other stockholders
oppose them. These matters include the election of directors, certain amendments
to our charter and bylaws and approval of significant corporate transactions,
such as a merger or a sale of our assets. This could delay or prevent someone
from acquiring or merging with us on terms that other stockholders may find
favorable.

ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW COULD PREVENT
OR DELAY A CHANGE IN CONTROL OF US

Certain provisions of our certificate of incorporation and by-laws may
discourage, delay or prevent a merger, acquisition or other change in control,
even if the change in control would be beneficial to stockholders. Any of these
provisions could reduce the market price of our common stock. These provisions
include:

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<PAGE> 20

- providing for a classified board of directors with staggered, three-year
terms

- limiting the persons who may call special meetings of stockholders

- prohibiting stockholder action by written consent

- establishing advance notice requirements for nominations for election to
the board of directors or for proposing matters that can be acted on by
stockholders at stockholder meetings

We are subject to the provisions of Section 203 of the General Corporation
Law of Delaware. Section 203 will prohibit us from engaging in certain business
combinations, unless the business combination is approved in a prescribed
manner. Accordingly, Section 203 may discourage, delay or prevent someone from
acquiring or merging with us.

YOU WILL EXPERIENCE IMMEDIATE DILUTION IN THE BOOK VALUE PER SHARE OF YOUR
COMMON STOCK

The initial public offering price is substantially higher than the book
value per share of the outstanding common stock immediately after this offering.
Accordingly, if you purchase common stock in the offering, you will:

- pay a price per share that substantially exceeds the value of your assets
after subtracting your liabilities; and

- contribute 49.0% of the total amount to fund Caminus Corporation, but
will own only 24.5% of the shares outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and elsewhere in this prospectus constitute forward-
looking statements. In some cases, you can identify forward-looking statements
by terminology such as "may," "will," "should," "could," "expects," "plans,"
"intends," "anticipates," "believes," "estimates," "predicts," "potential" or
"continue" or other comparable expressions. These statements involve known and
unknown risks and uncertainties that may cause our actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by
such forward-looking statements. These important factors include, among other
things, those listed under "Risk Factors" and elsewhere in this prospectus.

We cannot guarantee any future results, levels of activity, performance or
achievements. We undertake no obligation to update any of the forward-looking
statements after the date of this prospectus.

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<PAGE> 21

CAMINUS CORPORATION

On April 29, 1998, we were organized as a Delaware limited liability
company under the name "GFI Caminus LLC." We subsequently acquired the assets
and operations of our business through the acquisition of a number of companies
in the energy industry.

On May 12, 1998, we purchased a 1% general partnership interest and a 70%
limited partnership interest in Zai*Net Software, L.P., whose predecessor was
founded in 1987 and was one of the leading providers of electric power and risk
management software in North America and Europe. On December 31, 1998, we
acquired the remaining 29% limited partnership interest in Zai*Net Software,
L.P., and in March 1999, we merged Zai*Net Software, L.P. into us.

On May 12, 1998, we also purchased 100% of the shares of capital stock of
Cambridge, England-based Caminus Energy Limited, which is now known as Caminus
Limited. Founded in 1985, Caminus Limited is one of the leading European
strategic consultants to energy companies.

On November 13, 1998, we acquired substantially all of the business and
assets of Positron Energy Consulting, a leading risk analytics company founded
in Houston, Texas in 1996.

On July 31, 1999, we acquired 100% of the outstanding capital stock of DC
Systems, Inc., a Dallas-based software and services company specializing in
physical gas systems.

GFI Caminus LLC changed its name to "Caminus Energy Ventures LLC" on
September 21, 1998 and to "Caminus LLC" on January 12, 1999. On September 30,
1999, Caminus Corporation was formed as a Delaware corporation and wholly owned
subsidiary of Caminus LLC. Immediately prior to this offering, Caminus LLC will
merge with and into Caminus Corporation, which will be the surviving entity and
which is the registrant in connection with this initial public offering. Each
outstanding share of membership interest in Caminus LLC will convert into
.095238 of one share of common stock of Caminus Corporation in connection with
the merger.

All of the acquisitions described above have been accounted for under the
purchase method of accounting and, except as otherwise noted herein, all of the
financial information of the acquired companies has been included in this
prospectus since the respective dates of acquisition. For more information
regarding our initial formation and subsequent acquisitions, please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Certain Transactions" and note 3 of the Caminus Corporation
financial statements.

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<PAGE> 22

USE OF PROCEEDS

We estimate that the net proceeds from our sale of 3,572,235 shares of
common stock will be approximately $45,200,000 ($51,900,000 if the underwriters'
over-allotment option is exercised in full), assuming an initial public offering
price of $14.00 per share and after deducting estimated underwriting discounts
and our estimated offering expenses. We will not receive any of the net proceeds
from the sale of shares by the selling stockholders. See "Principal and Selling
Stockholders."

The principal purposes of this offering are:

- to enhance our ability to use our common stock as a means of attracting
and retaining key employees;

- to raise capital in order to repay bank debt;

- to pay a termination fee for consulting and advisory services;

- to provide increased visibility and credibility in the marketplace;

- to enhance our ability to use our common stock as consideration for
acquisitions;

- to increase our equity capital;

- to facilitate our future access to public capital markets; and

- to provide liquidity to our existing stockholders.

We expect to use the net proceeds received from this offering for the
repayment of bank debt to Fleet Bank, which totaled $2,000,000 at September 30,
1999. The credit agreement with Fleet Bank consists of a revolving loan that
expires on May 31, 2001 and a working capital loan that expires on May 31, 2000
but may be extended to May 31, 2001. The interest rate under the loans was
8 1/4% at September 30, 1999. $2,187,500 of the proceeds of the Fleet Bank loans
were used to pay an earnout provision in connection with the acquisition of
Zai*Net Software, L.P. For a description of the bank debt and the acquisition of
Zai*Net, see notes 8 and 3 of the Caminus Corporation financial statements. We
intend to use $1,300,000 of the net proceeds to pay GFI as consideration for
terminating its consulting and advisory arrangements with us. Additionally, we
expect to use approximately $476,000 for a special bonus payment to the former
shareholders of Caminus Limited. We intend to use the remainder of the net
proceeds for working capital and other general corporate purposes, including
possible acquisitions of businesses, products and technologies. See "Certain
Transactions."

From time to time we engage in discussions with potential acquisition
candidates. However, we have no current plans, commitments or agreements with
respect to any acquisitions, and we may not make any acquisitions.

Except as described above, we have not identified specific uses for the net
proceeds of this offering, and we will have discretion over their use and
investment. Pending use of the net proceeds, we intend to invest these proceeds
in short-term, investment grade, interest-bearing instruments.

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<PAGE> 23

DIVIDEND POLICY

We have never declared or paid any cash dividends on our capital stock. We
intend to retain future earnings, if any, to finance our growth strategy. We do
not anticipate paying cash dividends on our common stock in the foreseeable
future. Payment of future dividends, if any, will be at the discretion of our
board of directors after taking into account various factors, including:

- our financial condition;

- our operating results;

- our current and anticipated cash needs;

- restrictions in our financing agreements; and

- our plans for expansion.

Our existing line of credit prohibits the declaration or payment of cash
dividends to our stockholders so long as any loan amount is outstanding and
until we have paid in full all amounts payable by us under the terms of the
agreement and the related promissory notes. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" and note 8 of the Caminus Corporation financial statements.

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<PAGE> 24

CAPITALIZATION

The following table sets forth our cash and cash equivalents and
capitalization as of September 30, 1999:

- On an actual basis, assuming our reorganization as a corporation
immediately prior to this offering, including the issuance of an
aggregate of 9,238,088 shares of common stock to our stockholders in
exchange for their membership interests in the limited liability company;

- On a pro forma basis to give effect to:

(1) the issuance of an aggregate of 57,486 shares of common stock in
November 1999 to three employees in connection with our acquisition of
Positron;

(2) the issuance upon the closing of this offering of 160,209 shares of
common stock to David M. Stoner as a bonus for his services and, in
addition, the forgiveness of his $1,000,000 loan, which was previously
recorded; and

(3) the issuance of an aggregate of 1,581,194 shares of common stock upon
the expected exercise prior to or in connection with this offering of
options to purchase common stock issued to GFI, Nigel L. Evans,
Michael Morrison and SS&C Technologies, Inc., which, in the case of
the options held by Messrs. Evans and Morrison and SS&C Technologies,
would otherwise expire in connection with this offering; and

- On a pro forma as adjusted basis to give effect to the issuance and sale
by us of 3,572,235 shares of common stock in this offering at an assumed
initial public offering price of $14.00 per share and after deducting the
estimated underwriting discounts and our estimated offering expenses and
applying a portion of the net proceeds to pay a special one-time bonus to
Nigel L. Evans and Michael Morrison, pay GFI a termination fee for its
consulting and advisory services, and repay borrowings under our credit
facility.

The number of shares outstanding is based on the number of shares of our
common stock outstanding (pro forma) on September 30, 1999. It excludes 926,258
shares subject to options outstanding under our 1998 stock incentive plan at a
weighted average exercise price of $4.48 per share and 597,550 additional shares
available for issuance under our stock plans. You should read this table
together with "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and our financial statements and related notes included
elsewhere in this prospectus.

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<PAGE> 25

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1999
------------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
------------ ------------ ------------
<S> <C> <C> <C>
Cash and cash equivalents............. $ 801,351 $ 2,125,329 $ 44,010,829
============ ============ ============

Borrowings under credit facility,
including current portion........... $ 2,000,000 $ 2,000,000 $ --
============ ============ ============
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value per
share; 50,000,000 shares authorized;
11,000,389 shares issued and
9,238,088 shares outstanding,
actual; 12,799,278 shares issued and
11,036,977 shares outstanding, pro
forma; and 16,371,513 shares issued
and 14,609,212 shares outstanding,
pro forma as adjusted............... $ 110,004 $ 127,993 $ 163,715
Additional paid-in-capital............ 51,655,763 61,703,724 106,853,501
Treasury stock 1,762,301 shares, at
cost................................ (4,911,205) (4,911,205) (4,911,205)
Subscription receivable............... (2,907,065) (1,907,065) (1,907,065)
Accumulated deficit................... (16,613,938) (27,067,690) (28,367,690)
Unearned compensation................. (287,086) (287,086) (287,086)
Cumulative translation adjustment..... 3,800 3,800 3,800
------------ ------------ ------------
Total stockholders' equity....... 27,050,273 27,662,471 71,547,971
------------ ------------ ------------
Total capitalization, including
current portion of
borrowings..................... $ 29,050,273 $ 29,662,471 $ 71,547,971
============ ============ ============
</TABLE>

24
<PAGE> 26

DILUTION

Our pro forma net tangible book value at September 30, 1999 was
approximately $(3,677,253), or $(0.33) per share of common stock. Pro forma net
tangible book value per share represents the amount of our total tangible assets
(total assets less intangible assets) reduced by our total liabilities, divided
by the number of shares of common stock outstanding, after giving effect to our
reorganization as a corporation immediately prior to this offering and the
issuance of shares of common stock to David M. Stoner as a bonus for his
services, to three employees in connection with the Positron acquisition and
upon the expected exercise of options by GFI, Nigel L. Evans, Michael Morrison
and SS&C Technologies prior to or in connection with this offering. After giving
effect to our sale of 3,572,235 shares of common stock in this offering at an
assumed initial public offering price of $14.00 per share and our receipt of the
net proceeds, after deducting the estimated underwriting discounts and estimated
offering expenses and after applying a portion of the net proceeds towards the
payment of a termination fee to GFI, the payment of certain one-time bonuses and
the repayment of outstanding bank debt, our pro forma net tangible book value as
of September 30, 1999 would have been approximately $40,208,247, or $2.75 per
share. This represents an immediate increase in pro forma net tangible book
value of $3.08 per share to existing stockholders and an immediate dilution in
pro forma net tangible book value of $11.25 per share to new investors
purchasing shares in this offering. If the initial public offering price is
higher or lower, the dilution to new investors will be greater or less,
respectively. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $14.00
Pro forma net tangible book value per share as of September
30, 1999.................................................... $(0.33)
Increase per share attributable to this offering.......... 3.08
------
Pro forma net tangible book value per share after this
offering.................................................. 2.75
------
Dilution per share to new investors......................... $11.25
======
</TABLE>

The following table summarizes, on a pro forma basis as of September 30,
1999, the total number of shares of common stock purchased from us, the total
consideration paid and the average consideration paid per share by our existing
stockholders and by the new investors (at an assumed initial public offering
price of $14.00 per share for shares purchased in this offering, before
deducting underwriting discounts and our estimated offering expenses).

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------- ----------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- ------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C>
Existing
stockholders....... 11,036,977 75.5% $ 52,080,952 51.0% $ 4.72
New investors........ 3,572,235 24.5 50,011,290 49.0 $14.00
---------- ----- ------------ -----
Total........... 14,609,212 100.0% $102,092,242 100.0%
========== ===== ============ =====
</TABLE>

25
<PAGE> 27

Shares owned by existing stockholders will be reduced by the number of
shares sold by them in this offering. As a result, the number of shares owned by
existing stockholders will be reduced to 70.1% of the shares of common stock
after this offering (66.8% if the underwriters' over-allotment option is
exercised in full). As of September 30, 1999, there were outstanding stock
options to purchase 926,258 shares of common stock under our 1998 stock
incentive plan at a weighted average exercise price of $4.48 per share. To the
extent that any of these stock options are exercised, there will be further
dilution to new investors. See "Capitalization," "Management -- Benefit Plans"
and "Description of Capital Stock."

26
<PAGE> 28

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data should be read together
with the consolidated financial statements and related notes and "Management's
Discussion and Analysis of Financial Condition and Results of Operations," which
are included elsewhere in this prospectus. The statement of operations data for
the years ended December 31, 1994 and 1995 and the balance sheet data at
December 31, 1994 and 1995 are derived from, and are qualified by reference to,
the audited financial statements of Zai*Net Software, Inc., our predecessor, not
included in this prospectus. The statement of operations data for the years
ended December 31, 1996 and 1997 and for the four-month period ended April 30,
1998 and the balance sheet data at December 31, 1996 and 1997 are derived from,
and are qualified by reference to, the audited financial statements of Zai*Net
Software, Inc. included elsewhere in this prospectus, which have been audited by
PricewaterhouseCoopers LLP, independent accountants. The consolidated statement
of operations data for the period from our inception (April 29, 1998) through
December 31, 1998 and the consolidated balance sheet data at December 31, 1998
are derived from, and qualified by reference to, the audited financial
statements of Caminus LLC, included elsewhere in this prospectus, which have
been audited by PricewaterhouseCoopers LLP, independent accountants. The
consolidated statement of operations data for the period from our inception
(April 29, 1998) through September 30, 1998 and for the nine months ended
September 30, 1999 and the consolidated balance sheet data at September 30, 1999
are derived from, and are qualified by reference to, the unaudited financial
statements of Caminus Corporation and include, in the opinion of management, all
adjustments, consisting only of normal recurring adjustments, that are necessary
for the fair presentation of our financial position and results of operations.

In the following table, "Adjusted EBITDA" is defined as earnings before
interest and other income, income taxes, depreciation, amortization, acquired
in-process research and development, non-cash compensation expense and
terminated acquisition costs. Terminated acquisition costs represent costs
associated with a potential acquisition that we ultimately decided not to
pursue. EBITDA is a non-GAAP measure commonly used by investors and analysts to
analyze companies on the basis of operating performance, leverage and liquidity.
We present Adjusted EBITDA, which is also a non-GAAP measure, to enhance the
understanding of our operating results. We believe Adjusted EBITDA is an
indicator of our operating profitability since it excludes items which are not
directly attributable to our ongoing business operations. However, Adjusted
EBITDA relies upon management's judgement to determine which items are directly
attributable to our ongoing business operations and as such is subjective in
nature. Neither EBITDA nor Adjusted EBITDA should be construed as an alternative
to net income as an indicator of a company's operating performance or as an
alternative to cash flow from operations as a measure of a company's liquidity.
For information about cash flows or results of operations in accordance with
generally accepted accounting principles, please see the audited consolidated
financial statements included elsewhere in this prospectus.

27
<PAGE> 29

The pro forma statement of operations data give effect to the acquisitions
of Zai*Net, Caminus Limited and DC Systems, Inc. as if the acquisitions occurred
at the beginning of the respective periods presented. The pro forma balance
sheet data as of September 30, 1999 below give effect to the issuance of an
aggregate of 57,486 shares of common stock in November 1999 to three employees
in connection with our acquisition of Positron, the issuance upon the closing of
this offering of 160,209 shares of common stock to David M. Stoner as a bonus
for his services, the forgiveness of Mr. Stoner's $1,000,000 loan, which was
previously recorded, and the issuance of an aggregate of 1,583,035 shares of
common stock upon the expected exercise prior to or in connection with this
offering of options to purchase common stock issued to GFI, Nigel L. Evans,
Michael Morrisson and SS&C Technologies, Inc. The pro forma as adjusted balance
sheet data give effect to our sale of 3,572,235 shares of common stock in this
offering, at an assumed initial public offering price of $14.00 per share, after
deducting estimated underwriting discounts and our estimated offering expenses
and after the application of a portion of the proceeds to pay a special one-time
bonus to Nigel L. Evans and Michael Morrison, pay GFI a termination fee for its
consulting and advisory services and repay borrowings under our credit facility.

<TABLE>
<CAPTION>
ZAI*NET
(PREDECESSOR)
--------------------------------------------------------------
FOUR
MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------------------------------- APRIL 30,
1994 1995 1996 1997 1998
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Revenues:
Licenses...................... $ 633,750 $1,575,104 $1,291,427 $1,521,447 $1,495,221
Software services............. 781,819 973,235 1,429,860 2,667,807 1,334,473
---------- ---------- ---------- ---------- ----------
Total revenues.............. 1,415,569 2,548,339 2,721,287 4,189,254 2,829,694
---------- ---------- ---------- ---------- ----------
Gross profit.................... 728,201 1,583,758 1,722,145 2,857,772 2,095,452
Operating expenses.............. 1,093,144 1,444,477 1,619,084 2,862,008 1,659,422
---------- ---------- ---------- ---------- ----------
Operating income (loss)......... (364,943) 139,281 103,061 (4,236) 436,030
Other income (expense), net..... 10,327 9,511 (2,197) 17,591 8,294
Provision for income taxes...... -- -- -- -- 23,816
---------- ---------- ---------- ---------- ----------
Net income (loss)............... $ (354,616) $ 148,792 $ 100,864 $ 13,355 $ 420,508
========== ========== ========== ========== ==========

OTHER DATA:
Cash provided by operating
activities.................... $ 96,344 $ 146,142 $ 131,110 $ 401,048 $1,053,662
Cash used in investing
activities.................... 71,197 167,158 100,112 206,245 99,881
Cash provided by (used in)
financing activities.......... (7,373) 22,687 54,450 (290,050) (3,000)
Adjusted EBITDA................. (310,163) 217,426 204,179 118,854 482,171
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------
1994 1995 1996 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents...... $ 155,089 $ 156,760 $ 242,208 $ 146,961
Total assets................... 541,410 834,257 1,274,792 2,193,379
Long-term debt................. -- 17,000 3,000 --
Stockholders' equity
(deficit).................... (28,782) 120,010 220,874 234,229
</TABLE>

28
<PAGE> 30

<TABLE>
<CAPTION>
CAMINUS
----------------------------------------------------------------------------------
PRO FORMA PRO FORMA
INCEPTION TWELVE INCEPTION NINE NINE
(APRIL 29, 1998) MONTHS (APRIL 29, 1998) MONTHS MONTHS
THROUGH ENDED THROUGH ENDED ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1998 1998 1998 1999 1999
---------------- ------------ ---------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS:
Revenues:
Licenses............. $ 3,639,143 $ 5,455,014 $ 1,925,858 $ 8,088,621 $ 8,129,621
Software services.... 3,090,758 4,947,199 1,881,417 5,679,513 5,981,134
Strategic
consulting......... 2,896,102 4,354,096 1,720,550 4,757,425 4,757,425
------------ ------------ ----------- ----------- ------------
Total revenues..... 9,626,003 14,756,309 5,527,825 18,525,559 18,868,180
------------ ------------ ----------- ----------- ------------
Gross profit........... 4,940,985 8,126,983 2,855,235 12,673,116 12,733,815
Operating expenses..... 15,074,351 21,399,761 7,345,002 18,454,716 24,577,779
------------ ------------ ----------- ----------- ------------
Operating loss......... (10,133,366) (13,272,778) (4,489,767) (5,781,600) (11,843,964)
Other income (expense),
net.................. 96,909 120,109 56,535 (126,856) (130,333)
Provision for income
taxes................ 35,735 167,015 57,288 334,294 334,294
Minority interest...... (298,996) -- (189,920) -- --
------------ ------------ ----------- ----------- ------------
Net loss............... $(10,371,188) $(13,319,684) $(4,680,440) $(6,242,750) $(12,308,591)
============ ============ =========== =========== ============
Basic and diluted net
loss per share....... $ (1.41) $ (1.76) $ (0.65) $ (0.76) $ (1.46)
Weighted average common
shares -- basic and
diluted.............. 7,360,634 7,578,987 7,215,030 8,264,075 8,405,529
OTHER DATA:
Cash provided by (used
in) operating
activities........... $ 951,676 $ 456,381 $ (932,513)
Cash used in investing
activities........... 10,892,906 10,264,424 10,719,054
Cash provided by
financing
activities........... 12,699,637 12,874,999 9,693,866
Adjusted EBITDA........ 355,155 $ 397,280 382,350 2,079,747 $ 1,738,853
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
---------------------------------------
DECEMBER 31, PRO FORMA
1998 ACTUAL PRO FORMA AS ADJUSTED
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash
equivalents............. $ 2,770,538 $ 801,351 $ 2,125,329 $44,010,829
Total assets............ 31,069,002 40,868,631 42,192,609 84,078,109
Borrowings under credit
facility, net of
current portion....... -- 1,000,000 1,000,000 --
Current portion of
credit facility....... -- 1,000,000 1,000,000 --
Stockholders' equity.... 17,159,782 27,050,273 27,662,471 71,547,971
</TABLE>

29
<PAGE> 31

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with "Selected Consolidated
Financial Data" and our financial statements and related notes thereto appearing
elsewhere in this prospectus. This discussion and analysis contains
forward-looking statements that involve risks, uncertainties and assumptions.
The actual results may differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including but not
limited to those set forth under "Risk Factors" and elsewhere in this
prospectus.

OVERVIEW

We are a leading provider of software solutions and strategic consulting
services to participants in energy markets throughout North America and Europe.
We were organized as a limited liability company on April 29, 1998 and acquired
Zai*Net Software, L.P. and Caminus Limited in May 1998, Positron Energy
Consulting in November 1998 and DC Systems in July 1999. Since the completion of
these acquisitions, we expanded our organization by hiring personnel in key
areas, particularly marketing, sales and research and development. Our full-time
employees increased from 116 at December 31, 1998 to 174 at September 30, 1999,
and we intend to continue to increase our number of employees throughout 1999
and 2000.

We generate revenues from licensing our Zai*Net software products,
providing related services for implementation consulting and support and
providing strategic consulting services. We generally license one or more
Zai*Net products to our customers, who typically receive perpetual licenses to
use our products for a specified number of servers and concurrent users. After
the initial license, they may purchase licenses for additional products, servers
and users as needed. In addition, customers often purchase professional services
from us, including implementation and training services, and enter into
automatically renewable maintenance contracts that provide for software upgrades
and technical support over a stated term, typically 12 months. We also provide
strategic advice on deregulation and the restructuring of the energy industry
through our strategic consulting group. Implementation consulting and strategic
consulting are typically billed on a time and materials basis.

Our software license agreements are non-refundable. Payment terms require
that a significant portion of the license fee is payable on delivery of the
licensed product with the balance due in installments over a relatively short
period, generally four months or less.

We follow the provisions of Statement of Position ("SOP") No. 97-2,
"Software Revenue Recognition," as amended by SOP No. 98-4, "Deferral of the
Effective Date of Certain Provisions of SOP No. 97-2 and SOP 98-9, "Modification
of SOP 97-2, Software Revenue Recognition with Respect to Certain Transactions."
Under SOP No. 97-2, we recognize license revenues when a license is executed,
the product has been delivered, all significant company obligations are
fulfilled, the fee is fixed or determinable and collectibility is probable.
Under our current standard license agreement, we generally recognize license
revenues upon the execution of a license and delivery of the software. For those
license agreements where customer acceptance is required or the licensee
requires significant

30
<PAGE> 32

enhancements, we recognize license revenues only when our obligations under the
license agreement are completed and the software has been accepted. Accordingly,
for these contracts, payments received are deferred until our obligations under
the license agreement are completed. Maintenance and support revenues associated
with new product licenses and renewals are deferred and recognized ratably over
the contract period. Software services revenues and strategic consulting
revenues are recognized as such services are performed.

We also provide software to customers under long-term development contracts
that can require significant modification to adapt the software to the unique
specifications of the customer. If the service elements are considered essential
to the functionality of the software products, both the software product
revenues and service revenues are recognized using the completed contract method
as prescribed in accordance with the provisions of SOP 81-1, "Accounting for
Performance of Construction Type and Certain Production Type Contracts."
Accordingly, license and software enhancement revenues are recognized under the
completed contract method when all development, testing and installation is
completed and the purchaser formally accepts the software. Revenues and costs
are recognized upon completion of the contract and are based on the labor hours
incurred. Costs of software enhancements include the direct labor component of
programmer and consultant cost to perform the software enhancement or service as
well as the prorated share of technical support and overhead costs associated
with the enhancement and services. Anticipated losses, if any, on uncompleted
contracts are recognized in the period in which such losses are determined.

We sell our products through our direct sales forces in North America and
Europe. Our strategic relationships with third parties assist in generating
sales leads and provide cooperative marketing support. In addition, our
strategic consulting group not only develops its own client base but assists in
generating software sales leads.

Revenues from customers outside the United States represented 46% of our
total revenues for the nine months ended September 30, 1999. A significant
portion of our international revenues have been derived from sales of our
strategic consulting services and software products in the United Kingdom. We
intend to continue to expand our international operations and commit significant
management time and financial resources to developing our direct international
sales channels. International revenues may not, however, increase as a
percentage of total revenues.

We were formed as a limited liability company in April 1998. Accordingly,
we have not been subject to federal and state income taxes, except for certain
New York income taxes on limited liability companies. Immediately prior this
offering, the limited liability company will merge with and into Caminus
Corporation, a Delaware C corporation formed in September 1999. The adjustments
to the income tax provision reflect the additional tax provision we would have
recorded had we been a C corporation for the periods presented. See "Caminus
Corporation" for a description of our corporate history and acquisitions.

Due to our acquisitions and the respective dates of acquisition, and the
significant changes in our operations, the fluctuation of financial results,
including financial data expressed as a percentage of revenues for all periods,
did not necessarily provide a meaningful understanding of the expected future
results of our operations.

31
<PAGE> 33

RESULTS OF OPERATIONS

COMPARISON OF THE PERIOD FROM INCEPTION (APRIL 29, 1998) THROUGH SEPTEMBER 30,
1998 TO THE NINE MONTHS ENDED SEPTEMBER 30, 1999

The following table sets forth the consolidated financial information
expressed as a percentage of revenues for the period from inception (April 29,
1998) through September 30, 1998 and for the nine months ended September 30,
1999. The consolidated financial information for the period from inception
through September 30, 1998 and the nine months ended September 30, 1999 is
derived from the unaudited consolidated financial statements and includes, in
the opinion of our management, all adjustments, consisting only of normal
recurring adjustments, that are necessary for the fair presentation of our
financial position and results of operations. The period from inception through
September 30, 1998, which is approximately five months, is being compared to the
nine months ended September 30, 1999. Accordingly, increases in revenues and
expenses are primarily attributable to the comparison of periods containing
different numbers of months. The discussion below outlines other trends in the
business.

<TABLE>
<CAPTION>
INCEPTION THROUGH NINE MONTHS ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1999
------------------ ------------------
<S> <C> <C>
Revenues:
Licenses....................................... 35% 44%
Software services............................ 34 31
Strategic consulting......................... 31 26
--- ---
Total revenues............................ 100 100
Cost of revenues:
Cost of licenses............................. 1 4
Cost of software services.................... 22 18
Cost of strategic consulting................. 25 10
--- ---
Gross profit.............................. 52 68
Operating expenses:
Sales and marketing.......................... 5 14
Research and development..................... 12 14
General and administrative................... 30 33
Acquired in-process research and
development............................... 55 5
Amortization of intangible assets............ 31 33
--- ---
Total operating expenses.................. 133 99
--- ---
Loss from operations........................... (81) (31)
Other income (expense)......................... (1) (1)
Provision for income taxes..................... (1) (2)
Minority interest.............................. (3) --
--- ---
Net loss....................................... (85)% (34)%
=== ===
</TABLE>

Revenues

LICENSES. License revenues represented 35% and 44% of the total revenues
for the 1998 and 1999 periods, respectively, and increased $6.2 million, or
320%, from $1.9 million in the 1998 period to $8.1 million in 1999. This
increase was primarily attributable to sales to new customers, additional sales
to existing customers and, to a lesser extent, from an increase in the number of
our sales personnel. See "-- Liquidity and Capital Resources" for a discussion
of deferred revenues.

32
<PAGE> 34

SOFTWARE SERVICES. Software services revenues represented 34% and 31% of
the total revenues for the 1998 and 1999 periods, respectively, and increased by
$3.8 million, or 202%, from $1.9 million in the 1998 period to $5.7 million in
1999. This increase was primarily attributable to the increased licensing
activity described above, which resulted in increased revenues from customer
implementations and maintenance contracts. The greater increase in license
revenues as compared to the increase in software services revenues was
attributable to the increase in sales of licenses whereby the revenues were
recognized upon the execution of the license agreement and delivery of the
software to the client. Typically, software services are provided subsequent to
the recognition of the license revenues.

STRATEGIC CONSULTING. Strategic consulting revenues represented 31% and
26% of the total revenues for the 1998 and 1999 periods, respectively, and
increased $3.0 million, or 177%, from $1.7 million in the 1998 period to $4.8
million in 1999 and are derived from the Caminus Limited subsidiary acquired in
May 1998. This increase was primarily attributable to an increased number of
engagements, which was partially attributable to an increase in the number of
our consultants.

Cost of Revenues

COST OF LICENSES. Cost of licenses primarily consists of the personnel
costs associated with completing product enhancements and the software license
costs associated with third-party software that is integrated into our products.
Cost of licenses as a percentage of revenues was 1% and 4% for the 1998 and 1999
periods, respectively, and increased $0.6 million, or 679%, from $0.1 million in
the 1998 period to $0.7 million in 1999. The increase was primarily attributable
to the costs of product enhancements performed by DC Systems subsequent to our
July 1999 acquisition of DC Systems.

COST OF SOFTWARE SERVICES. Cost of software services consists primarily of
personnel costs associated with providing implementations, support under
maintenance contracts and training through our professional service group. Cost
of software services as a percentage of revenues was 22% and 18% for the 1998
and 1999 periods, respectively, and increased $2.0 million, or 166%, from $1.2
million in the 1998 period to $3.2 million in 1999. This increase was primarily
attributable to the increase in the number of implementations, training and
technical support personnel, and related recruiting expenses, to support the
growth of the implementations and the installed customer base. During 1999, we
established a dedicated customer support desk, which also required additional
personnel. We plan to continue expanding our implementation and support services
group and, accordingly, expect the dollar amount of our cost of software
implementation and support services to increase.

COST OF STRATEGIC CONSULTING. Cost of strategic consulting consists of
personnel costs incurred in providing professional consulting services. Cost of
strategic consulting as a percentage of revenues was 25% and 10% for the 1998
and 1999 periods, respectively, and increased $0.6 million, or 41%, from $1.4
million in the 1998 period to $1.9 million in 1999. This increase was
principally attributable to an increase in the number of our consultants, and
related recruiting expenses, to support the growth in revenues. We plan to
continue expanding our strategic consulting organization and expect these
expenses to increase.

33
<PAGE> 35

Operating Expenses

SALES AND MARKETING. Sales and marketing expenses consist primarily of
sales and marketing personnel costs, promotional and travel expenses and
commissions. Sales and marketing expenses as a percentage of revenues was 5% and
14% for the 1998 and 1999 periods, respectively, and increased $2.3 million, or
860%, from $0.3 million in the 1998 period to $2.5 million in 1999. This
increase was primarily due to an increase in headcount, recruiting expenses and
promotional and travel expenses associated with the hiring of additional sales
and marketing personnel to support the expansion of our domestic and
international sales organizations. We plan to continue expanding our sales and
marketing organization and expect our sales and marketing expenses to increase.

RESEARCH AND DEVELOPMENT. Research and development expenses consist
primarily of personnel costs for product development personnel and other related
direct costs associated with the development of new products, the enhancement of
existing products, quality assurance and testing. Research and development
expenses as a percentage of revenues was 12% and 14% for the 1998 and 1999
periods, respectively, and increased $2.0 million, or 320%, from $0.6 million in
the 1998 period to $2.7 million in 1999. This increase was primarily due to an
increased hiring of personnel and to other expenses associated with the
development of new products and enhancements of existing products. We plan to
continue expanding our research and development organization and expect our
research and development expenses to increase.

GENERAL AND ADMINISTRATIVE. General and administrative expenses consist
primarily of personnel costs of executive, financial, human resource and
information services personnel as well as facility costs and related office
expenses, management fees and outside professional fees. General and
administrative expenses as a percentage of revenues was 30% and 33% for the 1998
and 1999 periods, respectively, and increased $4.5 million, or 269%, from $1.7
million in the 1998 period to $6.2 million in 1999. This increase was primarily
due to increased staffing required to support our expanded operations in the
United States and internationally and, to a lesser extent, increased costs of
outside professional services and management fees, which include $0.4 million of
professional fees associated with a 1999 acquisition that was never consummated.

ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT. Acquired in-process research
and development as a percentage of revenues was 55% and 5% for the 1998 and 1999
periods, respectively, and was $3.1 million in the 1998 period and $1.0 million
in 1999. Acquired in-process research and development represents the fair value
of the in-process research and development acquired during the 1998 purchase of
Zai*Net and the 1999 purchase of DC Systems, respectively. In the opinion of
management, the acquired in-process research and development had not yet reached
technological feasibility and had no alternative future uses. Accordingly, such
amount was expensed on the date of acquisition. Zai*Net had two major projects
in progress at the time of the acquisition: power trading and scheduling; and
gas trading and scheduling. Development of power trading and scheduling
proceeded as anticipated in our year end appraisal and began generating revenues
this year consistent with our appraisal. Gas trading and scheduling projects
were more complex than anticipated. Therefore, we revised the original estimated
completion date of April 1999 to mid-1999 and further revised this estimate in
conjunction with the DC Systems acquisition in July 1999. In conjunction with
the acquisition of DC Systems, we postponed this project in

34
<PAGE> 36

order to evaluate comparable products of DC Systems. DC Systems had one major
project in progress at the time of the acquisition. This project added
functionality to Plant Master, and we estimate to complete this project in 2000.
We believe there have been no significant changes to these estimates as of
September 30, 1999. See note 3 of the Caminus Corporation financial statements
for a discussion of the calculation of acquired in-process research and
development.

Loss From Operations

As a result of the variances described above, operating loss increased by
$1.3 million, or 29%, from $4.5 million in the 1998 period to $5.8 million in
1999. Operating expenses as a percentage of revenues was 133% and 99% for the
1998 and 1999 periods, respectively.

Adjusted EBITDA

Adjusted EBITDA as a percentage of revenues was 7% and 11% for the 1998 and
1999 periods, respectively. Adjusted EBITDA increased $1.7 million, or 444%,
from $0.4 million in the 1998 period to $2.1 million in 1999.

Provision for Income Taxes

Our provision for income taxes for 1999 was $0.3 million and related
primarily to foreign income taxes. Our provision for income taxes for the 1998
period related to state and local taxes and was not significant. If we had been
a C-corporation, our provision for income taxes would have been $0.4 million and
$0.5 million for the 1998 and 1999 periods, respectively.

Minority Interest

Minority interest represents the earnings attributable to the 29% of
Zai*Net that we did not own during the 1998 period.

Contingent IPO expenses

As a result of our initial public offering, certain events will occur which
will require us to record significant charges. These transactions include the
earning of an option granted to the former shareholders of Caminus Energy
Limited, which will result in a charge of approximately $6.4 million including
taxes, a payment of approximately $0.5 million for a special one-time bonus to
the former shareholders of Caminus Energy Limited, a payment of $1.3 million for
a termination fee to GFI to cancel its consulting and advisory agreement and the
granting of shares and the forgiveness of a loan to our President and Chief
Executive Officer, which will result in a charge of approximately $3.2 million.
The charges related to the granting of equity are based on the mid-point of the
initial public offering filing range.

35
<PAGE> 37

COMPARISON OF THE ZAI*NET (PREDECESSOR) YEAR ENDED DECEMBER 31, 1997 TO THE
PERIOD FROM INCEPTION THROUGH DECEMBER 31, 1998

The following table sets forth the consolidated financial information as a
percentage of revenues for the year ended December 31, 1997 of Zai*Net, our
predecessor, and for the period from our inception through December 31, 1998.
The consolidated financial information for us and Zai*Net is derived from the
audited consolidated financial statements included elsewhere in this prospectus.
The period from inception though December 31, 1998 is approximately eight months
and includes the consolidated results of operations of Zai*Net and Caminus
Limited, which is being compared to Zai*Net for the year ended December 31,
1997. Accordingly, there are fluctuations within the revenues and expenses which
are primarily attributable to the disparity between the periods and the bases of
the companies. The discussion below outlines other trends in our business.

<TABLE>
<CAPTION>
CAMINUS
----------------
ZAI*NET INCEPTION
(PREDECESSOR) (APRIL 29, 1998)
----------------- THROUGH
YEAR ENDED DECEMBER 31,
DECEMBER 31, 1997 1998
----------------- ----------------
<S> <C> <C>
Revenues:
Licenses........................................ 36% 38 %
Software services............................. 64 32
Strategic consulting.......................... -- 30
--- -----
Total revenues............................. 100 100
Cost of revenues:
Cost of licenses.............................. -- 2
Cost of software services..................... 32 24
Cost of strategic consulting.................. -- 23
--- -----
Gross profit............................... 68 51
Operating expenses:
Research and development...................... 29 12
Selling, general and administrative........... 39 38
Acquired in-process research and development.. -- 50
Amortization of intangible assets............. -- 57
--- -----
Total operating expenses................... 68 157
--- -----
Loss from operations............................ -- (106)
--- -----
Other income.................................... -- 1
Provision for income taxes...................... -- --
Minority interest............................... -- (3)
--- -----
Net income (loss)............................... --% (108)%
=== =====
</TABLE>

Revenues

LICENSE. License revenues represented 36% and 38% of the total revenues
for the 1997 and 1998 periods, respectively, and increased $2.1 million, or
139%, from $1.5 million in 1997 to $3.6 million in 1998. This increase was
primarily

36
<PAGE> 38

attributable to sales to new customers, additional sales to existing customers
and, to a lesser extent, from an increase in the number of our sales personnel.

SOFTWARE SERVICES. Software services revenues represented 64% and 32% of
the total revenues for the 1997 and 1998 periods, respectively, and increased
$0.4 million, or 16%, from $2.7 million in 1997 to $3.1 million in 1998. This
increase was primarily attributable to the increased licensing activity
described above, which resulted in increased revenues from customer
implementations and maintenance contracts. The greater increase in license
revenues as compared to the increase in software services revenues was
attributable to the disproportional timing of the recognition of the respective
revenues. During 1997 many of our sales of licenses had acceptance criteria and,
accordingly, license revenues were deferred and the recognition of such revenues
occurred during 1998 when we completed our obligations under the license
agreement and the software had been accepted. Software services revenues were
recognized ratably over the implementation as such services were performed.

STRATEGIC CONSULTING. Strategic consulting revenues represented 0% and 30%
of the total revenues for the 1997 and 1998 periods, respectively, and were $2.9
million in 1998. There were no strategic consulting revenues in 1997 as the
predecessor company was not in that business.

Cost of Revenues

COST OF REVENUES. Cost of revenues during 1998 consisted primarily of
personnel costs associated with providing implementations, strategic consulting,
support under maintenance contracts and training through our professional
service group and the cost of licensing third-party software. Cost of revenues
during 1997 consisted primarily of personnel costs associated with providing
implementations, support under maintenance contracts and training through our
professional service group. Cost of licenses was insignificant for the
respective periods ended 1997. Cost of revenues as a percentage of revenues was
32% and 49% for the 1997 and 1998 periods, respectively, and increased $3.4
million, or 252%, from $1.3 million in 1997 to $4.7 million in 1998. This
increase was primarily attributable to the increase in the number of
implementation, training and technical support personnel, and related recruiting
expenses, to support the growth of the implementations and the installed
customer base. Additionally, there was no cost associated with the strategic
consulting business during 1997.

Operating Expenses

RESEARCH AND DEVELOPMENT. Research and development expenses as a
percentage of revenues were 29% and 12% for the 1997 and 1998 periods,
respectively, and was approximately $1.2 million in each of 1997 and 1998.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses as a percentage of revenues were 39% and 38% for the 1997 and 1998
periods, respectively, and increased $2.0 million, or 120%, from $1.6 million in
1997 to $3.6 million in 1998. This increase was primarily due to increased
staffing required to support our expanded operations in the United States and
internationally and, to a lesser extent, increased costs of outside professional
services and management fees.

37
<PAGE> 39

ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT. Acquired in-process research
and development expenses as a percentage of revenues were 0% and 50% for the
1997 and 1998 periods, respectively, and $4.8 million during 1998 represented
the in-process research and development costs related to the acquisition of
Zai*Net. In the opinion of management and the third-party appraiser, the
acquired in-process research and development had not yet reached technological
feasibility and had no alternative future uses. See note 3 of the Caminus LLC
financial statements for a discussion of the calculation of acquired in-process
research and development.

AMORTIZATION OF INTANGIBLE ASSETS. The amortization of the intangible
assets represents the amortization of goodwill, which is the excess of the
purchase price over the net assets acquired from the acquisitions of Zai*Net,
Caminus Limited and Positron, the amortization of intangible assets and the
write-off of the value of the SS&C Technologies, Inc. distribution agreement. As
of December 31, 1998, we had not sold any of the SS&C products acquired under
the distribution agreement. Further, we do not have an active plan to sell the
software, which was acquired pursuant to the terms of the distribution
agreement. Because we have not resold any SS&C software, nor do we have a formal
plan in place to resell this software, the total guaranteed minimum payments to
SS&C as stipulated in the distribution agreement have been recorded as a charge
in the statement of operations. For a discussion of the SS&C distribution
agreement, see note 13 of the Caminus Corporation financial statements.
Amortization of intangible assets as a percentage of revenues was 0% and 57% for
the 1997 and 1998 periods, respectively, and was $5.5 million in 1998. There was
no intangible asset amortization in 1997.

Loss From Operations

As a result of the write-off of the acquired in-process research and
development and the amortization of intangible assets during 1998, operating
loss increased from $0.0 million in 1997 to $10.1 million in 1998. Operating
expenses as a percentage of revenues were 68% and 157% for the 1997 and 1998
periods, respectively.

Adjusted EBITDA

Adjusted EBITDA as a percentage of revenues was 3% and 4% for the 1997 and
1998 periods, respectively. Adjusted EBITDA increased $0.2 million, or 199%, to
$0.4 million in 1998.

Minority Interest

Minority interest in 1998 represents the earnings attributable to the 29%
of Zai*Net that we did not own.

38
<PAGE> 40

COMPARISON OF THE ZAI*NET SOFTWARE YEAR ENDED DECEMBER 31, 1996 TO THE ZAI*NET
SOFTWARE YEAR ENDED DECEMBER 31, 1997

The following table sets forth the consolidated financial information as a
percentage of revenues of Zai*Net, our predecessor company, for the years ended
December 31, 1996 and 1997, which are derived from the audited financial
statements of Zai*Net.

<TABLE>
<CAPTION>
ZAI*NET (PREDECESSOR)
--------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
Revenues:
Licenses...................................... 47% 36%
Software services........................... 53 64
Strategic consulting........................ -- --
--- ---
Total revenues........................... 100 100
Costs of revenues............................. 37 32
--- ---
Gross profit............................. 63 68

Operating expenses:
Research and development.................... 23 29
Selling, general and administrative......... 36 39
--- ---
Total operating expenses................. 59 68
--- ---
Income (loss) from operations................. 4 --
Other income.................................. -- --
--- ---
Net income.................................... 4% --%
=== ===
</TABLE>

Revenues

LICENSE. License revenues represented 47% and 36% of the total revenues
for the 1996 and 1997 periods, respectively, and increased $0.2 million, or 18%,
from $1.3 million in 1996 to $1.5 million in 1997. This increase was primarily
attributable to sales to new customers and additional sales to existing
customers.

SOFTWARE SERVICES. Software services represented 53% and 64% of the total
revenues for the 1996 and 1997 periods, respectively, and revenues increased
$1.2 million, or 87%, from $1.4 million in 1996 to $2.7 million in 1997. This
increase was primarily attributable to the increased licensing activity
described above, which resulted in increased revenues from customer
implementations and maintenance contracts. The greater increase in software
services revenues as compared to the increase in license revenues was
attributable to the disproportional timing of the recognition of the respective
revenues. During 1997, many of our sales of licenses had acceptance criteria and
accordingly, license revenues were deferred into 1998. Software service revenues
were recognized ratably over the implementation as such services were performed.

39
<PAGE> 41

Cost of Revenues

COST OF REVENUES. Cost of revenues consists primarily of personnel costs
associated with providing implementations, support under maintenance contracts
and training through our professional service group. Cost of licenses was
insignificant for 1996 and 1997. Cost of revenues as a percentage of revenues
was 37% and 32% for the 1996 and 1997 periods, respectively, and increased $0.3
million, or 33%, from $1.0 million in 1996 to $1.3 million in 1997. This
increase was primarily attributable to the increase in the number of
implementation, training and technical support personnel to support the growth
of the implementations and the installed customer base.

Operating Expenses

RESEARCH AND DEVELOPMENT. Research and development expenses as a
percentage of revenues were 23% and 29% for the 1996 and 1997 periods,
respectively, and increased $0.6 million, or 95%, from $0.6 million in 1996 to
$1.2 million in 1997. This increase was primarily due to an increased hiring of
personnel and to other expenses associated with the development of new products
and enhancements of existing products.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses as a percentage of revenues were 36% and 39% for the 1996 and 1997
periods, respectively, and increased $0.6 million, or 65%, from $1.0 million in
1996 to $1.6 million in 1997. This increase was primarily due to increased
staffing required to support our expanded operations in the United States and
abroad.

SELECTED QUARTERLY RESULTS OF OPERATIONS

The following tables represent certain unaudited consolidated statement of
operations information for each quarter in the eleven quarters ended September
30, 1999, as well as such information expressed as a percentage of total
revenues for the periods indicated. The information for the six quarters ended
September 30, 1999 was derived from unaudited financial statements and has been
prepared on the same basis as our audited consolidated financial statements and,
in the opinion of management, includes all adjustments, which consist of normal
recurring adjustments, that we consider necessary for the fair presentation of
such information when read in conjunction with our audited consolidated
financial statements and notes thereto, appearing elsewhere in this prospectus.
The information for the five quarters ended March 31, 1998 was derived from the
unaudited financial statements of Zai*Net, our predecessor company, and has been
prepared on the same basis as the audited financial statements of Zai*Net and,
in the opinion of management, includes all adjustments, which consist of normal
recurring adjustments, that we consider necessary for the fair presentation of
such information when read in conjunction with the audited financial statements
of Zai*Net and notes thereto, appearing elsewhere in this prospectus. Due to the
acquisitions completed during 1998 and the significant changes in our
operations, the comparison of fluctuations for these time periods would not
provide a meaningful understanding of our on-going operations. We believe
quarter-to-quarter comparisons of financial results should not be relied upon as
an indication of future performance, and operating results may fluctuate from
quarter to quarter

40
<PAGE> 42

in the future. See "Risk Factors" and the financial statements contained
elsewhere in this prospectus. We expect our results of operations will fluctuate
and the price of our common stock could fall if quarterly results are lower than
the expectation of securities analysts.

From the date of our formation as a limited liability company through
September 30, 1999, we were not subject to federal and state income taxes,
except for certain New York income taxes on limited liability companies. The
amounts in the line item of the statement of operations and other data table
below titled "Pro forma net income (loss)" reflect the additional tax provision
that we would have recorded had we been a C corporation for the periods
presented.

<TABLE>
<CAPTION>
ZAI*NET
(PREDECESSOR)
----------------------------------------------------------------
QUARTER ENDED
----------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31,
1997 1997 1997 1997 1998
--------- -------- ------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Licenses................... $293,263 $249,489 $ 401,481 $ 577,214 $1,100,344
Software services.......... 674,583 614,484 649,120 729,620 819,386
-------- -------- ---------- ---------- ----------
Total revenues........... 967,846 863,973 1,050,601 1,306,834 1,919,730
-------- -------- ---------- ---------- ----------
Gross profit................. 639,428 550,376 716,280 951,688 1,419,274
Operating expenses........... 556,593 593,425 672,340 1,039,650 1,223,799
-------- -------- ---------- ---------- ----------
Operating income (loss)...... 82,835 (43,049) 43,940 (87,962) 195,475
Other income (expense), net.. 1,200 9,295 (4,441) 11,537 10,966
Provision for income taxes... -- -- -- -- (90,948)
-------- -------- ---------- ---------- ----------
Net income (loss)............ $ 84,035 $(33,754) $ 39,499 $ (76,425) $ 115,493
======== ======== ========== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
ZAI*NET
(PREDECESSOR)
---------------------------------------------------------------
QUARTER ENDED
---------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31,
1997 1997 1997 1997 1998
--------- -------- ------------- ------------ ---------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Licenses..................... 30% 29% 38% 44% 57%
Software services............ 70 71 62 56 43
--- --- --- --- ---
Total revenues............. 100 100 100 100 100
--- --- --- --- ---
Gross profit................... 66 64 68 73 74
Operating expenses............. 57 69 64 80 64
--- --- --- --- ---
Operating income (loss)........ 9 (5) 4 (7) 10
Other income (expense), net.... -- 1 -- 1 1
Provision for income taxes..... -- -- -- -- (5)
--- --- --- --- ---
Net income (loss).............. 9% (4)% 4% (6)% 6%
=== === === === ===
</TABLE>

41
<PAGE> 43

<TABLE>
<CAPTION>
CAMINUS
--------------------------------------------------------------------------------------
QUARTER ENDED
--------------------------------------------------------------------------------------
JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30,
1998 1998 1998 1999 1999 1999
----------- ------------- ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues:
Licenses............... $ 916,015 $ 1,009,842 $ 1,713,286 $ 1,776,579 $ 2,518,746 $ 3,793,296
Software services...... 676,000 1,205,417 1,209,341 1,949,373 2,057,217 1,672,923
Strategic consulting... 855,768 864,782 1,175,552 1,509,504 1,430,558 1,817,363
----------- ----------- ----------- ----------- ----------- -----------
Total revenues....... 2,447,783 3,080,041 4,098,179 5,235,456 6,006,521 7,283,582
----------- ----------- ----------- ----------- ----------- -----------
Gross profit............. 1,369,971 1,485,264 2,085,750 3,654,117 4,052,222 4,966,777
Operating expenses....... 4,760,914 2,584,088 7,729,349 4,810,067 5,369,897 8,274,752
----------- ----------- ----------- ----------- ----------- -----------
Operating loss........... (3,390,943) (1,098,824) (5,643,599) (1,155,950) (1,317,675) (3,307,975)
Other income (expense),
net.................... 25,438 31,097 40,374 3,247 (54,949) (75,154)
Provision (benefit) for
income taxes........... 44,511 12,778 (21,554) 73,245 66,323 194,726
Minority interest........ (98,917) (91,002) (109,077) -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Net loss................. $(3,508,933) $(1,171,507) $(5,690,748) $(1,225,948) $(1,438,947) $(3,577,855)
=========== =========== =========== =========== =========== ===========
Pro forma net loss....... $(3,405,511) $(1,139,160) $(5,614,558) $(1,442,079) $(1,470,668) $(3,468,018)
=========== =========== =========== =========== =========== ===========
Basic and diluted net
loss per common
share.................. $(0.50) $(0.16) $(0.75) $(0.15) $(0.18) $(0.43)
Pro forma basic and
diluted net loss per
common share........... $(0.48) $(0.16) $(0.74) $(0.18) $(0.18) $(0.42)
Weighted average
shares -- basic and
diluted................ 7,074,526 7,309,717 7,604,362 7,966,928 7,993,157 8,296,539
</TABLE>

<TABLE>
<CAPTION>
CAMINUS
-------------------------------------------------------------------------------
QUARTER ENDED
-------------------------------------------------------------------------------
JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30,
1998 1998 1998 1999 1999 1999
-------- ------------- ------------ --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues:
Licenses............... 37% 33% 42% 34% 42% 52%
Software services...... 28 39 29 37 34 23
Strategic consulting... 35 28 29 29 24 25
---- --- ---- --- --- ---
Total revenues....... 100 100 100 100 100 100
---- --- ---- --- --- ---
Gross profit............. 56 48 51 70 67 68
Operating expenses....... 194 84 189 92 89 114
---- --- ---- --- --- ---
Operating income
(loss)................. (138) (36) (138) (22) (22) (45)
Other income (expense),
net.................... 1 1 1 -- (1) (1)
Provision (benefit) for
income taxes........... 2 -- (1) 1 1 3
Minority interest........ (4) (3) (3) -- -- --
---- --- ---- --- --- ---
Net loss................. (143)% (38)% (139)% (23)% (24)% (49)%
==== === ==== === === ===
Pro forma net loss....... (139)% (37)% (137)% (28)% (24)% (48)%
==== === ==== === === ===
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents as of September 30, 1999 were approximately $0.8
million, a decrease of approximately $2.0 million from December 31, 1998. Our
cash flow used in operating activities is primarily affected by, but not limited
to, cash received from customers, cash paid to compensate employees, cash paid
for professional fees, cash paid for the leasing of real estate and equipment
and cash

42
<PAGE> 44

paid to third party software licensors. We prepare our cash flow statement using
the indirect method which reconciles net income to cash used in operating
activities. Therefore, the following discussion explains the significant items
which impact the reconciliation of net income to cash flow from operating
activities. The explanations should be read in conjunction with our consolidated
statements of cash flow appearing elsewhere in this prospectus. Net cash used in
operating activities for the nine months ended September 30, 1999 was
approximately $0.9 million. Net cash used in operating activities primarily
resulted from our net loss of $6.2 million, which was offset by depreciation and
amortization and acquired in-process research and development write-offs, a $2.2
million increase in accounts receivable and a $1.1 million decrease in accounts
payable, partially offset by increases of $3.0 million in accrued liabilities
and $2.1 million in deferred revenues. The increase in accounts receivable and
accrued liabilities was primarily attributable to the growth of our business.
The increase in accrued liabilities was primarily related to professional fees
associated with an acquisition that we ultimately decided not to pursue and
certain costs of this offering. The decrease in accounts payable was primarily
due to the payment of professional fees and recruiting costs associated with the
1998 acquisitions and the recruitment of additional personnel, respectively.
Deferred revenues decreased approximately $2.1 million during the nine months
ended September 30, 1999 primarily due to a decrease in deferred license
revenues, partially offset by an increase in deferred maintenance revenues.
Deferred license revenues decreased primarily due to completion of our
obligations under certain license agreements and the acceptance of the software
by the customers. Accordingly, certain license revenues, which were deferred at
December 31, 1998, were recognized during the nine months ended September 30,
1999. During 1999, we modified our standard license agreement by removing all
acceptance criteria. As a result, our current license agreements generally allow
for the recognition of revenues upon the execution and delivery of the software
to the customer. Deferred maintenance revenues increased primarily due to a
change in billing practice, where most customers are now invoiced on an annual
or quarterly basis instead of a monthly basis.

Our cash flow used in investing activities is primarily affected by, but
not limited to, net cash paid to acquire businesses and cash paid for capital
expenditures. The discussions appearing below should be read in conjunction with
our consolidated statements of cash flow appearing elsewhere in this prospectus.
Net cash used in investing activities during the nine months ended September 30,
1999 was approximately $10.7 million and resulted primarily from the purchase of
DC Systems for $9.9 million, net of cash acquired, and $0.8 million in capital
expenditures for computer and communications equipment, purchased software,
office equipment, furniture, fixtures and leasehold improvements.

Our cash flow provided by financing activities is primarily affected by,
but not limited to, net cash received from investors, net cash received under
borrowings from a credit facility, cash paid to affiliates and stockholders
under contractual obligations, and cash distributions paid to stockholders. The
discussions appearing below should be read in conjunction with our consolidated
statements of cash flow appearing elsewhere in this prospectus. Net cash
provided by financing activities during the nine months ended September 30, 1999
was approximately $9.7 million. During the nine months ended September 30, 1999,
financing activities provided cash of approximately $12.3 million from the sale
of equity,

43
<PAGE> 45

$2.0 million from borrowings under a credit agreement entered into in June with
Fleet Bank and approximately $1.8 million in subscriptions received. These funds
were used for the payment of the purchase price for DC Systems, an earnout to
the former owners of Zai*Net of $2.2 million, to repurchase an equity interest
in us held by SS&C Technologies, Inc. for $0.3 million and to pay the $1.7
million due under the distributor agreement with SS&C and $0.3 million
distribution to members for taxes.

On June 23, 1999, we entered into a credit agreement with Fleet Bank which
provides for total borrowings of up to $5.0 million under two facilities, a
revolving loan and a working capital loan. The revolving loan expires on May 31,
2001 and provides for borrowings of up to $2.5 million. The working capital loan
expires on May 31, 2000, which may be extended to May 31, 2001, and provides for
borrowings that are limited to 85% of eligible accounts receivable, less $0.5
million, which in the aggregate can not exceed $2.5 million. The loans under
this agreement bear interest either at the bank's reference rate, which is
generally equivalent to the published prime rate, or LIBOR plus an applicable
margin between 2.5% and 3.0%. The credit agreement requires maintenance of
customary financial ratios. We intend to use approximately $2,000,000 of the net
proceeds of this offering to repay the outstanding balance under the loans.
After repaying the outstanding balance, we intend to terminate our existing
credit agreement.

We have funded our operations and acquisitions primarily from the proceeds
of equity sales and borrowings under our credit facility. We expect that our
working capital needs will continue to grow as we execute our growth strategy.
We believe, in the absence of this offering, that our ability to borrow under
our credit facility, the receipt of subscriptions receivable from certain of our
original limited liability company investors and cash to be generated from
operations would be sufficient to meet our expenditure requirements for at least
the next twelve months. Additionally, we intend to obtain additional equity
financing from an initial public offering of common stock during 1999.

YEAR 2000 COMPLIANCE

Many currently installed computer systems and software products
electronically store dates using only the last two digits of the calendar year.
As a result, these systems may not be able to distinguish whether "00" means
1900 or 2000, which may cause system failures or erroneous results. This problem
is generally referred to as the "Year 2000 issue."

STATE OF READINESS. We have identified the information technology, or IT,
and non-IT systems, software and products that could be affected by Year 2000
issues, and have completed our assessment of the potential overall impact of the
impending century change on our business.

Based on our current assessment, we believe current and prior versions of
our software products are Year 2000 compliant. By Year 2000 compliant, we mean
that the use or occurrence of dates on or after January 1, 2000 will not
materially affect the performance of our software products or the ability of our
products to correctly create, store, process and output data involving dates,
provided that all other products, such as hardware and software used with our
products, are also Year 2000 compliant. However, our products are generally
integrated into, and

44
<PAGE> 46

process data extracted from, other enterprise systems involving sophisticated
hardware and complex software products that we cannot adequately evaluate for
Year 2000 compliance.

We have completed a Year 2000 assessment of our internal management
information systems and other computer systems. As part of this effort, we have
communicated with the vendors that supply us with our software and information
systems and with our significant suppliers to determine whether their products
and organizations are Year 2000 compliant. We received a written response from a
small percentage of the external vendors, and the significant suppliers that we
contacted indicated that their systems are Year 2000 compliant. Those who have
not responded have statements on their web sites indicating that their systems
are Year 2000 compliant.

The results of these readiness assessment initiatives indicate that
substantially all of our internal information technology systems and other
internal operating systems are currently Year 2000 compliant.

COSTS. To date, costs directly associated with our Year 2000 compliance
efforts have not been material. In addition, we have incurred immaterial
expenses associated with our salaried employees who have devoted some of their
time to our Year 2000 assessment and compliance efforts. We do not expect the
total cost of Year 2000 problems to be material to our business. Despite our
current assessment, we may not identify and correct all significant Year 2000
problems on a timely basis. Year 2000 compliance efforts may involve significant
time and expense and uncured problems could seriously harm our business.

RISKS. We are not currently aware of any Year 2000 compliance problems
relating to our products that would seriously harm our business. We may discover
Year 2000 compliance problems in our products that will require substantial
revision and could subject us to liability claims. Our products operate in
complex network environments and directly or indirectly interact with a number
of other hardware and software systems that we cannot adequately evaluate for
Year 2000 compliance. In addition, technology developed by others and
incorporated into our products could have Year 2000 problems. We may face claims
based on Year 2000 problems in the products of other companies, or issues
arising from the integration of multiple products within an overall system even
if our products are otherwise Year 2000 compliant. Our failure to fix or replace
our internally developed proprietary software or third-party software, hardware
or services on a timely basis could result in lost revenues, increased operating
costs, the loss of customers and other business interruptions, any of which
could seriously harm our business. Moreover, our failure to adequately address
Year 2000 compliance issues in our internally developed proprietary software
could result in claims of mismanagement, misrepresentation or breach of contract
and related litigation, which could be costly and time-consuming to defend.

CONTINGENCY PLAN. As discussed above, we have conducted a Year 2000
assessment and have not found it necessary to implement any contingency plans.
Contingency plans will be implemented if it appears that we or any of our
vendors will not be Year 2000 compliant and such noncompliance is expected to
have a material adverse impact on our operations. The cost of developing and
implementing such plans may itself be material.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Our exposure to market risk for changes in interest rates relates primarily
to our long-term debt obligations. We primarily use proceeds from these debt
obligations to support general corporate requirements, including capital
expenditures and working capital needs. We have interest rate exposure on
borrowings under our revolving line of credit which bear interest at variable
rates based on LIBOR or the prime interest rate.

We have no derivative financial instruments in our cash and cash
equivalents. We invest our cash and cash equivalents in investment-grade, highly
liquid investments, consisting of money market instruments and bank certificates
of deposit. We anticipate investing our net proceeds from this offering in
similar investment-grade and highly liquid investments pending their use as
described in this prospectus.

For the nine months ended September 30, 1999, approximately 38% of our
revenues and 29% of our expenses was denominated in British pounds.
Historically, the effect of fluctuations in currency exchange rates has not had
a material impact on our operations. As we expand our operations outside the
United States, our exposure to fluctuations in currency exchange rates could
increase.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Financial
Accounting Standards Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities," which is effective for the Company beginning in 2001.
FAS 133 establishes accounting and reporting standards for derivative financial
instruments and hedging activities related to those instruments, as well as
other hedging activities. Because we do not currently hold any derivative
financial instruments and do not engage in hedging activities, we expect the
adoption of FAS 133 will not have a material impact on our consolidated
financial condition, results of operations or cash flows.

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BUSINESS

OVERVIEW

We are a leading provider of software solutions and strategic consulting
services to participants in energy markets throughout North America and Europe,
including utilities, electrical power generating companies, energy marketers
electric power pools, gas producers, processors and pipelines. We offer a suite
of software solutions and associated services to enable energy market
participants to manage complex risk scenarios and effectively trade and manage
energy transactions, addressing multiple types of risk and energy commodities,
such as electric power, natural gas, crude oil and coal, across varied
geographies. In addition, our strategic consulting practice, which is one of the
leading consulting organizations in the European energy industry, provides
energy market participants with strategic advice regarding where to compete and
how to compete. Our team of subject matter experts provides strategic advice on
long-term energy investment decisions, including decisions relating to the
appropriate use of energy assets and the most effective operating strategies in
deregulating energy markets. We currently have approximately 100 energy
enterprise customers of our software solutions and strategic consulting
services. Many of our customers are leaders in the energy industry, including
American Electric Power, Consolidated Edison, Conoco, PG&E Energy Trading,
Preussen Elektra and TXU Electric and Gas. For a discussion of our two business
segments, software solutions and strategic consulting, as well as geographic
information about us, please see the Caminus Corporation financial statements.

INDUSTRY BACKGROUND

The energy industry, which includes the electric power, natural gas and
energy trading markets, is currently one of the five largest vertical markets in
the United States, with 1998 revenues of approximately $300 billion. We believe
the global energy market, excluding the United States, is approximately twice as
large as the U.S. market. Energy market participants have historically been
single, highly integrated organizations undertaking all activities of the energy
value chain, from exploration and generation to distribution and end-user
support. In order to introduce and stimulate competition in the energy industry,
governments in the United States, the United Kingdom and continental Europe have
dramatically reduced or eliminated their regulation of natural gas and electric
power markets.

In the United States, the deregulation of the natural gas industry began in
the early 1990s, while electric power deregulation began in the mid 1990s.
Deregulation is currently underway in more than half of the states, being
undertaken on a statewide basis in some jurisdictions and on a
provider-by-provider basis in others. The pace of this deregulation, both
nationally and on a statewide basis, is accelerating. Deregulation in the United
Kingdom and the Nordic region of Europe began in the late 1980s and early 1990s.

As a result of this deregulation:

- Vertically integrated suppliers are breaking up, energy trading is
becoming more complex and opportunities are being created for new market
entrants;

- Trading volumes are growing rapidly, and price volatility and risk
exposure are increasing significantly;

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- Energy market participants must find information technology solutions and
services that enable them to compete effectively in deregulating energy
markets; and

- Few solutions exist that are specifically targeted to address the buying,
selling and trading of energy in deregulating environments.

Vertically integrated suppliers are breaking up, energy trading is becoming more
complex and opportunities are being created for new market entrants

Traditional, vertically integrated utilities are breaking up on their own
initiative in order to remain competitive and in response to deregulation. This
is creating substantial opportunities for new entrants in the changing energy
marketplace. Vertically integrated monopoly control of wholesale and retail
energy transactions has weakened, creating the necessity for traditional
utilities and new entrants to buy, sell and hedge energy in a rapidly
deregulating wholesale market. For example, in some regions, electric power is
being sold by generators into electric power pools and then purchased from the
pool by electric power marketers and end users. In other cases, competing
suppliers are negotiating contracts directly with end users. Often the market is
a hybrid of these approaches. Today, energy purchase and sale agreements contain
different durations, terms, delivery points and volumes. In addition, the
definition of the product increasingly varies from contract to contract in terms
of power quality, reliability and other measurable attributes.

These factors have increased the range and number of participants in the
electric power, natural gas and energy trading markets. They include the
following:

<TABLE>
<CAPTION>
MARKET PARTICIPANTS
- ------ ------------
<S> <C>
ELECTRIC POWER Power generating companies
Independent power producers
Independent system operators
Power pools
Transmission companies
Distributors
Marketers
Retailers
End users
NATURAL GAS Producers
Gatherers
Processors
Storage operators
Pipelines
Local distribution companies
Marketers
Retailers
End users

ENERGY TRADING Commodity exchanges
Over-the-counter traders
Brokers
Financial institutions
</TABLE>

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Trading volumes are growing rapidly, and price volatility and risk exposure are
increasing significantly

The increase in the number of market participants has in turn greatly
increased the number and complexity of energy transactions that must be managed
and associated trading risks that must be controlled. According to Enron Corp.,
the world's largest electric power trader, global wholesale electric power
trading volume increased tenfold from 1996 to 1998. In 1998, over 70% of
wholesale electric power trading was among energy marketers who neither produce,
transport nor consume electric power. This growth in market participants has
resulted in increased trading velocity, which is the number of times power is
traded before it is ultimately consumed.

The nature of energy commodities also adds to the complexity of the market.
For example, electric power has distinctive attributes that create more price
volatility than other commodities. Electric power, which is worth different
amounts in different locations, cannot be stored in significant quantities or
transported long distances at economic costs, and costs of generation and
transmission vary significantly. Demand and price in turn can vary dramatically,
with variations dependent upon time of day, day of the week and weather
conditions. All of these factors contribute to substantial price volatility and
thus growing risk exposure.

For example, during the summer of 1998, the electricity market in the
midwestern U.S. witnessed significant increases in wholesale spot market prices.
On June 25 and 26, 1998, prices for electric energy rose from $25 per megawatt
hour to as much as $2,600 per megawatt hour, with at least one hourly price
reaching $7,500 per megawatt hour. One month later, more abnormally large price
increases occurred. Several factors occurred simultaneously to cause these price
"spikes." Above average temperatures increased demand to near record levels, and
generating capacity could not keep pace. Transmission constraints also reduced
the ability of utilities to transport electric power. In addition, the overall
lack of accurate information and market experience among various market
participants contributed to the surge in prices, and several parties defaulted
on large electric power sales contracts, thereby forcing their customers to buy
electric power on short notice at substantial prices. In addition, during the
summer of 1999 there were similar spikes in spot market prices. These incidents
are indicative of the significant price volatility of electric power.

Energy market participants must find information technology solutions and
services that enable them to compete effectively in deregulating energy markets

Deregulation of the energy industry is forcing market participants to:

- better understand their current roles in the energy value chain;

- assess their long-term energy strategies, including where to compete and
how to compete; and

- invest in the right information technology solutions to analyze,
implement and support their energy strategies.

To compete in this rapidly changing market, energy market participants need
advice on how to make the transition from participating in a non-competitive,

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regulated market to a highly complex, competitive market. For example, they need
to understand their role in interacting with multiple and diverse market
participants, trading multiple energy commodities and competing in several
markets.

The deregulating energy environment has created an immediate and growing
need for the same operational, trading and risk management infrastructure that
has supported other long-standing markets but, until recently, has been handled
in a rudimentary way in the energy sector. A study conducted by ABB Energy
Information Systems estimates that global energy information technology spending
will grow from $14 billion in 1999 to $24 billion in 2005. To successfully
compete in an environment of greater competition and price volatility, and
significant risk exposure, energy market participants require systems that
provide:

- transaction confirmation;

- portfolio management;

- risk management;

- trading system controls;

- demand, supply and price forecasting;

- decision support; and

- transaction management tools.

Few solutions exist that are specifically targeted to address the buying,
selling and trading of energy in deregulating environments

In response to deregulation in the natural gas industry in the U.S.,
software systems have been developed to manage the physical flow and trading of
natural gas. However, many of these systems are not capable of supporting the
requirements of energy participants in today's deregulating energy markets
because they do not adequately support electric power trading or multiple types
of risk and cannot be integrated with other segments of the energy value chain.
A number of existing solutions, including most internal solutions, are point
solutions that are designed to address costs in the energy market but cannot
conduct trades, manage risks or record and analyze the numerous market-based
variables affecting multiple energy assets across different geographies. These
point solutions, which may consist of little more than off-the-shelf software
applications, first-generation portfolio management tools and spreadsheets, are
often not integrated with the operational and analytical functions of the
enterprise and may be unable to interface with other participants in the energy
industry, such as the emerging energy power pools.

In addition, energy participants have been analyzing energy assets with
traditional analytical models from the financial services industry, such as the
industry-standard Black-Scholes option pricing model, which may be appropriate
for financial instruments but does not account for all the variables relevant to
energy trading, such as volume risk. We believe that over the next several years
energy market participants will require new energy trading systems in order to
effectively compete in the continually changing energy marketplace.

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CAMINUS SOLUTION

We are a leading provider of software solutions and strategic consulting
services to participants in energy markets throughout North America and Europe.
We provide participants in the energy industry with sophisticated software
solutions to manage complex risk scenarios and effectively trade and manage
energy transactions. We also provide our customers with strategic advice
regarding where to compete, both by geographic region and position within the
energy value chain, and how to compete.

We provide energy market participants with sophisticated software systems
to compete in deregulated markets. Our Zai*Net suite of software features:

- AN INTEGRATED, MULTI-FUNCTIONAL SOLUTION TO TRADE AND MANAGE ENERGY
TRANSACTIONS THROUGHOUT THE ENERGY VALUE CHAIN. Our Zai*Net suite of
software products provides decision support for trading, corporate-wide
risk and credit management and complete tracking and invoicing of energy
as it flows through the energy value chain. We offer a solution with
modules ranging from sophisticated analytical tools for understanding and
measuring the unique opportunities and risks in the energy industry to
tools designed to electronically confirm energy flows with gas pipelines,
electric power pools and independent system operators.

- THE ABILITY TO SUPPORT MULTIPLE COMMODITIES AND TYPES OF RISKS ACROSS
VARIED GEOGRAPHIES. Our Zai*Net suite of integrated software products
supports multiple traded energy commodities, including electric power and
natural gas via various energy trading instruments. Our software includes
not only U.S. and European gas and electric power functionality, but also
specific geographic business capabilities, including functions tailored
for the North Sea and Asian crude oil markets.

We also have one of the leading strategic consulting practices in the
European energy industry. Based in Cambridge, England, our team of subject
matter experts provides strategic advice on long-term energy investment
decisions, including decisions relating to the appropriate use of energy assets
and the most effective operating strategies in deregulating energy markets. Our
26 strategic consultants are among Europe's most respected energy experts and,
through their extensive consulting work with regulators, understand what
deregulated market participants require to be effective competitors.

Our customers seek solutions that enable them to compete globally in
rapidly changing energy markets. We believe that our strong presence in the
United States and Europe gives us a significant advantage over our competitors
and positions us for strong penetration of these and other markets. We have
three offices in the United States and two in the United Kingdom. Our 100
customers represent some of the world's largest energy enterprises. We are the
leading consultants on energy policy to regulators in the United Kingdom, one of
Europe's most deregulated energy markets.

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STRATEGY

Our objective is to become the leading provider of software solutions and
strategic consulting services to participants in energy markets throughout the
world. Key elements of our strategy include:

Extending our product leadership

We offer a sophisticated suite of software solutions for the energy
industry and plan to continue to introduce new products that bring added value
to energy market participants. We intend to expand our product offerings by
taking advantage of the flexible structure of our existing software solutions,
which allows us to integrate new product offerings easily. Leveraging the
significant subject matter expertise of our strategic consultants, we continue
to develop software solutions responsive to the evolving needs of our current
and potential customers. For example, during 2000 we plan to introduce our
Zai*Net Weather Delta product, which we believe will significantly improve the
ability of our customers to manage weather risk. We are also continuing to
systematically configure our products to be Web-enabled. We have also
established Web-based hosting of some of our applications to make our products
available cost-effectively to smaller market participants, and improve the
effectiveness of larger enterprises. We plan to invest heavily in the growth of
our global development capability and hire additional product development
personnel in both the United States and Europe.

Maintaining and expanding our strategic consulting leadership

Our experience and in-depth understanding of competitive energy markets has
enabled our team of strategic consultants to be at the forefront of changes in
the U.K. and continental European energy sectors. This leadership provides us
with a special understanding of the needs of our energy clients. We intend to
build on this leadership position by expanding our strategic consulting services
in deregulating energy markets, including Germany, Spain and Italy. During 1998,
we increased our number of consultants in Europe from 23 to 28 in anticipation
of expanding our consulting services and we are planning a significant increase
in personnel in 2000. We also plan to begin building strategic consulting
operations in the United States in 2000.

Continuing to build a global distribution channel

The selling and marketing of sophisticated software solutions to address
the needs of global energy markets requires a highly trained sales channel with
comprehensive subject matter expertise. We have hired a significant number of
experts who can bring added value to the sales and marketing process. We plan to
double the size of our sales channel by the end of 2000 and to expand its scope
beyond the larger energy enterprises to target mid and small market
participants. We also intend to actively pursue opportunities to sell our
software solutions to our installed base of strategic consulting customers as
well as provide strategic consulting services to our software customers.

Expanding global presence

We currently have three offices in the United States and two in the United
Kingdom. As of September 30, 1999, we had 104 employees in the United States and
70 employees in Europe. We believe that our strong international presence

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provides us with a competitive advantage in providing solutions to energy market
participants that are seeking to compete globally in rapidly changing energy
markets. We intend to continue to expand in the foreseeable future to pursue
market opportunities in other markets experiencing energy deregulation,
particularly markets in Europe.

Developing strategic alliances to address the evolving needs of energy market
participants

We are seeking to form relationships with leading providers of products and
services that complement our software solutions. In July 1999, we formed a
strategic alliance with ABB Energy Information Systems, a unit of the ABB Group,
which is one of the world's largest vendors serving the energy industry.
Together with ABB Energy Information Systems, we are developing a comprehensive
end-to-end software solution designed to enable vertically integrated energy
suppliers to manage transactions and risks along the entire energy value chain,
from generation and wholesale acquisition of energy through retail sales. We
believe our combined solution will be one of the first end-to-end solutions in
the energy industry and will strengthen our leadership position in the industry.
We have also entered into strategic marketing arrangements with other companies,
including Siemens, Financial Engineering Associates, PH Energy Analysis and SS&C
Technologies, Inc. We plan to develop additional strategic relationships that
will assist our sales and marketing efforts in new geographic markets.

Continuing to grow through acquisitions

We have achieved a leadership position through acquisitions that have
helped us implement our business strategy. We were formed as a limited liability
company in April 1998 for the purpose of acquiring Zai*Net Software, L.P. and
Caminus Limited. In November 1998, we acquired Positron Energy Consulting. We
have successfully integrated the operations of these companies. In July 1999, we
acquired DC Systems, Inc., a software and services company specializing in
physical gas systems. We plan to pursue acquisitions that continue to add to our
subject matter expertise, bring us new products and services and help us
aggressively grow our market share throughout the world. We currently have no
commitments or agreements with respect to any acquisition. We intend to analyze
potential acquisitions and pursue those opportunities that complement or
supplement our business strategy.

PRODUCTS AND SERVICES

Software Products

Our suite of software products is one of the most comprehensive in the
energy industry. Branded under the "Zai*Net" name, our product suite provides an
integrated energy trading, risk management, scheduling and analytics system to
support multiple functional areas of the energy enterprise. It also allows
energy professionals to model physical assets so they can be effectively
employed in conjunction with a firm's trading and marketing operations.

The Zai*Net product suite offers a software solution covering a range of
functions, including trading, transaction management, risk management, analytics

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and physical scheduling across front, middle and back office operations. Full
integration among the Zai*Net product suite enables energy market participants
to trade, process transactions and manage risk from the wholesale acquisition of
energy through its sale and scheduling. Key benefits of our product suite
include the ability to:

- Manage risk among multiple energy commodities on an enterprise-wide
basis;

- Provide and track operational results from a trader level to a business
unit or enterprise level;

- Maintain trading data in a centralized database with a single,
consolidated, auditable solution;

- Integrate energy trading, risk/control, credit, back office,
treasury/finance and management reporting on a single system;

- Analyze the financial risk and potential impact of long-term energy
investment decisions; and

- Simulate the behavior of deregulating energy markets to forecast future
market prices.

Our software solutions consist of the following three tightly integrated
product groups:

- Zai*Net Manager, our core product, supports energy trading operations and
records and manages transactions and risks of energy commodities;

- Zai*Net Risk Analytics provides advanced risk assessment and management
tools for competitive energy markets; and

- Zai*Net Physicals manages physical energy scheduling operations and
invoicing.

We also offer a fourth product group, Zai*Net Models, to analyze
competitive electric power and natural gas markets, and value energy assets.

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[ZAINET PRODUCT SUITE FLOWCHART]

The omitted graphic is a visual model of our Zai*Net product suite. There
are two boxes. The upper box contains the Zai*Net Models product group:
PowerMarkets, PowerOptions, GasOptions, and ProjectFinance. Below that, there is
a bullet-point list of their functions: long term energy investment analysis,
asset valuation and option valuation.

Below the Zai*Net Models box lies a second, larger box, containing three
smaller boxes within, each representing one of three tightly integrated product
groups. The first box is labeled "Zai*Net Risk Analytics." Inside the box is a
description of its purpose, Corporate Risk Management and a bullet-point list of
its functions: basis exposure, profit & loss attribution, Monte Carlo
Value-at-Risk and potential credit exposure.

The second box is labeled "Zai*Net Manager." Inside the box is a
description of its purpose, Trading, Transaction & Risk Management and a
three-column list of its functions. The first column, "Front Office", lists
trade capture, position/ portfolio management, and pricing & profit & loss. The
second column, "Middle Office", lists Value-at-Risk, credit exposure, portfolio
stress analysis, and audit trail. The third column, "Back Office" lists
reporting confirmations and invoicing.

The third box is labeled "ZaiNet Physicals". This box is divided-side into
three software subgroups. The first subgroup is titled Power*Master. Its listed
functions are: hourly power schedules, curtailments & actualization, pathing
information, and tagging. The second software subgroup is titled Gas*Master and
lists as its functions: gas schedules, pipeline rate schedules, interconnect
movements, and storage. The third software subgroup is Plant*Master, which lists
its functions as: gas plants and processing management.

Zai*Net Manager Product Group

The Zai*Net Manager software is designed to increase the efficiency of a
customer's daily trading operations by recording and managing transactions and
associated risks of energy related commodities. It is used by energy traders and
marketers, risk managers, credit officers and others involved in trading energy
commodities and managing energy risk exposure. The Zai*Net Manager software
serves as the core system and integrates front, middle and back office trading
functionality for multiple traded energy commodities, including:

- electric power

- natural gas

- crude oil

- refined products

- natural gas liquids

- coal

- emission allowances

- weather derivatives

- foreign exchange transactions

The software also provides pricing and back office support for all traded
instruments, including multiple types of physicals, swaps, over-the-counter
options, listed options and futures.

The Zai*Net Manager software's real-time risk management capability
provides aggregated portfolio numbers that instantaneously reflect position and
price changes. The software is designed to handle enterprise-wide, high-level
risk
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management and is also capable of detailed energy commodity position tracking,
analysis and accounting for diverse local trading requirements.

The Value-at-Risk, or VaR, functionality computes corporate-wide VaR, a
widely accepted method for evaluating and measuring market risk, by a number of
categories. The VaR software analyzes information about the risk, or likely gain
or loss, in a given portfolio. The software also provides credit risk analysis
on a real-time basis to minimize current exposure. Portfolio stress analysis
enables risk managers to monitor the impact of price and volatility movements,
and the passage of time on a specified portfolio's position and profit and loss.
Full system audit capability tracks "who did what when" in the system, and "as
of" reporting -- the ability to recreate a previous day's profit and loss
position -- is integrated throughout the system.

Zai*Net Risk Analytics Product Group

Zai*Net Risk Analytics software provides an advanced set of risk assessment
and management tools designed specifically for competitive energy markets. It is
used by energy traders and marketers, risk managers, credit officers and others
involved in managing energy risk exposure. The software utilizes sophisticated
modeling, analysis and simulation methods to help understand business risks.
Zai*Net Risk Analytics software complements and is integrated with Zai*Net
Manager and Zai*Net Physicals software to facilitate the accurate valuation and
management of energy portfolios.

The Zai*Net Risk Analytics software allows users to track portfolio
performance versus projected risks so they can better understand the behavior of
the portfolio under a range of possible price movements, enabling them to more
effectively manage trading and risk.

Zai*Net Risk Analytics software provides capabilities that allow energy
market participants to carefully monitor their risk profiles and credit
positions to manage, analyze and isolate specific risks. It includes the
following modules:

- BASIS BREAKDOWN REPORTING breaks down the risk factors of a single
transaction or group of transactions according to varying price
movements, which are commonly referred to as fixed, basis and index
prices. This enables more detailed analysis of each element of portfolio
risk.

- PROFIT & LOSS (P&L) ATTRIBUTION REPORTING analyzes profit and loss
changes over specified time periods, and attributes such changes to (1)
variations in a commodity's price and volatility, (2) the passage of time
in the specified period and (3) new, changed or voided transactions
during the period.

- MONTE CARLO VALUE-AT-RISK (VaR) ANALYSIS uses the industry-standard Monte
Carlo VaR methodology optimized specifically for energy portfolios. This
analysis runs a portfolio through thousands of simulated market price and
volatility movements and reports a distribution for VaR, which is the
likely gain or loss.

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- POTENTIAL CREDIT EXPOSURE ANALYSIS provides close monitoring of credit
risk by capturing volatility in credit exposure calculation to help
contain potential losses.

Zai*Net Physicals Product Group

The Zai*Net Physicals software allows electric power and natural gas
traders and schedulers as well as management and back office staff to manage
physical energy scheduling operations and invoicing. The Zai*Net Physicals group
consists of three major products: Gas*Master, Power*Master and Plant*Master
software.

-GAS*MASTER software supports all aspects of physical natural gas
transportation, including scheduling, pipeline nominations and wellhead -- or
production-level -- accounting. Gas*Master software includes the following
modules:

-- GAS SCHEDULING assists users in planning and scheduling natural gas
transportation by pipelines, in and out of storage facilities, and to
and from gas pipeline interconnect and storage points.

-- GAS NOMINATIONS manages natural gas scheduling information and formats
the information to the specific requirements of various gas pipeline
systems, enabling bids and confirmations of complex physical gas
transactions. A Web-based electronic data interface, or EDI, allows
automatic transfer of all information exchange with the pipelines,
without requiring user intervention or data re-entry.

-- WELLHEAD ACCOUNTING enables companies with interest at the wellhead
level -- or production site -- to manage the division of interest and
royalty payments.

-POWER*MASTER allows users to schedule electric power across the various
transmission systems and electric power markets worldwide. It includes the
following modules:

-- LONG-TERM POWER SCHEDULING tracks power curtailments, actual electric
power flow and physical and financial transmission line losses by
transaction. The user-friendly interface matches energy transactions
(buys with sells), tracks the "paths" that the energy has flowed
through on the power grid and creates daily and monthly schedules of
planned power flows down to a minute level.

-- REAL-TIME POWER SCHEDULING captures and schedules purchases and sales
of power and transmission capacity, which is the flow of power between
points on the electrical grid networks, on a convenient, single-entry
screen. We designed this module in conjunction with traders and
schedulers to support hourly and real-time trading in the deregulating
power markets.

-PLANT*MASTER enables natural gas processing plant operators to track the
physical flows of gas through the facility and to manage title and allocation
throughout the process.

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Zai*Net Models Product Group

Zai*Net Models provide support for long-term energy decisions with a
comprehensive suite of software solutions to analyze competitive electric power
and natural gas markets. Using sophisticated techniques, the models allow
accurate appraisals, capturing the embedded risk prevalent in many energy
assets. These models also perform sensitivity analysis, which involves valuation
testing against varying assumptions relating to fuel costs, price volatility,
operating costs and characteristics, and discount rates. The models use advanced
methods for valuing physical options -- options that reflect the risks of the
physical energy market -- and can be used for mark-to-market valuation and risk
reporting. The Zai*Net Models include:

- POWERMARKETS is a model that simulates the dynamics of competitive
electricity markets, including forward prices, operating performance of
generators and trading flows between markets and regions.

- POWEROPTIONS is a set of models that uses sophisticated analyses to value
energy assets.

- GASOPTIONS is a set of models that uses sophisticated analyses to value
storage assets and complex purchase and sale transactions.

- PROJECTFINANCE is a financial model that values new and existing assets
using a number of analytical techniques.

Product Pricing

We license our software for a one-time license fee, which typically
consists of a base fee plus charges for optional modules and system users. The
one-time license fee for base packages can range from $200,000 to $400,000 for a
system with basic functionality and a small number of users. Adding additional
functionality through optional modules, which are priced from $20,000 to over
$100,000, and additional users can increase system license fees to a range of
$500,000 to over $1 million. Customers also typically enter into an annual
maintenance agreement providing them with regular software upgrades and help
desk support. Customers pay an annual maintenance fee that is typically equal to
20% of the customer's license fee. A majority of our customers start with a
software solution providing basic functionality to a limited number of users and
add functionality and users as they expand their operations.

Software Services

We offer a broad range of professional services to assist our customers in
implementing our software products to meet their business needs. Our philosophy
is to focus on the needs of each specific customer and to tailor our services
accordingly. We provide the following services, primarily on a time and
materials basis:

- IMPLEMENTATION CONSULTING SERVICES to assist customers with the initial
installation of the software or newly licensed modules, conversion of the
customer's historical data, setting the operational parameters of the
system and ongoing training and support.

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- APPLICATION CONSULTING SERVICES to help our customers gain the maximum
benefit from our systems and implement best practices in their trading
and risk management operations.

- POST-IMPLEMENTATION CUSTOMER SUPPORT to answer customer questions and
resolve problems through remote diagnosis and telephone hotline support.

These services and the professionals that deliver them contribute to a
strong relationship with our customers, enabling us to assess the future
requirements of our customers and sell them additional products and services. As
of September 30, 1999, our software consulting staff consisted of 41 employees
located in the U.S. and Europe.

STRATEGIC CONSULTING SERVICES

Based in Cambridge, England, our 26 strategic consultants provide European
governments with strategic advice on the deregulation and restructuring of the
energy industry and assist energy companies with global operations in choosing
and implementing strategies to remain competitive in deregulating energy
markets. Our reputation in strategic consulting is based on our experience and
in-depth understanding of competitive energy markets. We have significant
expertise in economics, regulation and strategy, and have been at the forefront
of changes in the United Kingdom energy sector, which has one of the most
deregulated natural gas and electric power markets in the world. Our knowledge
and information base covers the entire energy value chain from fuel production
through generation, transmission, distribution and trading, and we have a
detailed understanding of competitive wholesale trading arrangements in
international gas and electricity markets.

Our strategic consulting expertise, which is billed primarily on a time and
materials basis, is diverse and includes specialization in the following areas:

ACQUISITIONS. New entrants and existing players in deregulating markets
may choose to strengthen their market position through acquisitions of assets or
businesses. We have significant experience in the economic evaluation of new and
existing energy projects and have provided advice on more than 20 power projects
in the U.K., as well as a number of projects in Europe.

QUANTITATIVE ANALYSIS. We are experts in analyzing complex issues in
competitive energy markets. Our quantitative approach encompasses, among other
things, the effect of changing market structures on the key price drivers. Our
strategic consulting group first developed our suite of analytical models of the
England and Wales energy power pool in the late 1980s to assist our clients in
their negotiations with the U.K. government over the structure of the energy
power pool. Since then, we have refined these models into our comprehensive
suite of analytical Zai*Net Models that support strategic energy decisions.

RISK MANAGEMENT. Throughout Europe, competition is forcing natural gas and
electric utilities to re-evaluate their strategies for managing the risks in
their businesses. We offer a complete range of risk management consultancy
services, independently or in conjunction with our Zai*Net software suite. We
have developed electricity trading and risk management training courses for a
number of U.K., continental European and North American power companies. We have
also

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<PAGE> 61

run several successful electricity trading and risk management workshops at
major European power conferences.

POLICY FORMULATION. Over the years, we have worked very closely with
British gas and electricity regulators to help design and establish the world's
first fully competitive gas and electricity markets. We are currently lead
economic advisors to the U.K. gas and electricity regulatory body, OFGEM, on the
Reform of Electricity Trading Arrangements. We have also developed a leading
advisory position on the transition to competition in other European energy
markets.

SALES AND MARKETING

We sell our products and services through a direct sales channel. We
believe the product and market expertise necessary to sell our highly
sophisticated products cannot be delegated successfully to third parties, and we
seek to hire subject matter experts who can bring added value to the sales
process. We do believe, however, that third parties can provide us with valuable
assistance in our marketing efforts, especially in new geographic regions.

Direct Sales Model

As of September 30, 1999, our direct sales force consisted of 21 employees
selling from our U.S. and European offices. We have a single sales organization
in each region that is responsible for selling our entire suite of products and
services in that region. Each of the U.S. and European sales organizations is
led by a highly experienced vice president with a strong background in building
and leading large enterprise sales teams.

We use a team sales approach in which professional account representatives
work with pre-sales product and service experts. The account representative
generates and qualifies leads, manages the sales process and is responsible for
closing the sale. Most new customer sales cycles typically range from six to
nine months from lead generation to contract execution. Territories are assigned
to account representatives on a geographic and named-account basis. Pre-sales
consultants support the sales process by assessing the prospect's business needs
and creating and delivering technical sales information and demonstrations.
Subject matter experts from strategic consulting and product development
supplement the sales team as the sales situation dictates. In addition, our
strategic and software consultants work closely with the sales team to identify
additional sales opportunities with existing customers. We have closely
coordinated team selling between the U.S. and European channels on global
enterprise opportunities.

Marketing Communications

To support our growing direct sales channel, we have devoted significant
resources to building strong marketing support. Our main marketing objectives
are to generate sales leads and increase the market's awareness and accurate
perception of us and our products and services. These efforts are focused on
industry advertising, public relations, trade shows, direct mailings, the
Internet and

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platform participation in major industry seminars. As of September 30, 1999, we
had four marketing personnel.

STRATEGIC RELATIONSHIPS

We continue to develop relationships, most of which are informal, with
third parties that can assist us in generating sales leads and provide us with
cooperative marketing support. We formed the most significant of our formal
marketing relationships in July 1999 with ABB Energy Information Systems, a unit
of ABB Group. ABB Group is one of the world's largest vendors serving the energy
industry. Together with ABB Energy Information Systems, we are developing a
comprehensive end-to-end solution to provide vertically integrated energy
suppliers with the ability to manage risk along the entire energy value chain,
from wholesale acquisition of energy through retail sales. We also have joint
marketing arrangements with Siemens, Financial Engineering Associates, PH Energy
Analysis, Unified Information and SS&C Technologies.

RESEARCH AND DEVELOPMENT

A strong development capability is essential to delivering responsive
products to an emerging market, continually improving the quality and
functionality of our current products and enhancing our core technology. As of
September 30, 1999, we had 41 employees in our research and development area. We
spent approximately $0.6 million, $1.2 million, $1.2 million and $2.7 million on
research and development during the years ended December 31, 1996 and 1997, the
period from inception (April 29, 1998) through December 31, 1998 and the nine
months ended September 30, 1999, respectively.

We believe the best way to maximize our development capability is to have
small, entrepreneurial development teams, each of which is focused on a specific
product group. Our teams operate under a structure that provides an "umbrella"
of common strategy, plans, technology, standards, methodologies, processes and
culture. Our product teams consist of product mangers, programmers and
documentation and quality assurance specialists, and overall development
management consists of the leaders of each development team, led by the chief
technology officer. The leaders ensure that the teams operate under the common
umbrella and that they work closely with product marketing in a process designed
to ensure that we develop products that the market requires. The team leaders
manage the integration between products and coordinate overall product suite
quality assurance.

We are developing a variety of new products and product enhancements. One
product that we are developing is our Zai*Net Weather Delta product, which we
are designing to provide tools for energy risk professionals to integrate
weather data, one of the key factors in energy demand, into energy load
forecasts. We are designing Zai*Net Weather Delta to analyze the relationships
among load, price and weather. We are also designing the software to deliver
comprehensive reports showing financial volume-at-risk with the traditional
rigor of utility load forecasting. The product is in the design phase, and we
currently plan to release Zai*Net Weather Delta during 2000.

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TECHNOLOGY

Written primarily in C/C++ with standard graphical user interfaces, the
Zai*Net software suite has an open, three-tier client/server architecture and
runs on Unix and NT servers with Windows95 and WindowsNT clients on Oracle,
Microsoft or Sybase database platforms. We typically store business logic in
objects that reside on the client or server side of the application. Objects are
usually coded in C++ using object-oriented programming techniques for improved
scalability.

The ability to integrate easily with other systems is a key competitive
advantage. To facilitate integration with a variety of architectures, the
Zai*Net suite of solutions provides standard interfaces to accept trades and
prices from other systems and sources. The suite processes trades and prices
into standard formats, easily processed by the risk system. It performs this
activity in random access memory-based server objects keeping slow disk access
to a minimum. The integrated result is an object-oriented, high-performance
system that will run on a variety of servers and databases.

CUSTOMERS

Our customers include a wide range of entities in the energy market,
including utilities, natural gas and electric power marketers, energy retailers,
natural gas and oil producers, local distribution companies, pipelines,
independent power producers, financial institutions and regulatory agencies. We
currently have approximately 100 energy enterprise customers located primarily
in the U.S., Canada, the U.K., Germany, Austria, Belgium, the Netherlands, Spain
and Venezuela. Our customers include:

UTILITIES
American Electric Power
Austin Energy (City of Austin, TX)
Bayernwerk
BC Hydro/Powerex
Consolidated Edison
Electrabel
GPU Energy
Ontario Power Generation
Pennsylvania Power & Light
Preussen Elektra
Public Service Electric & Gas
TXU Electric and Gas
SEP

NATURAL GAS AND ELECTRIC POWER MARKETERS
Bord Gais
Eastern Electricity plc
Merchant Energy Group of the Americas
PG&E Energy Trading
Valero Refining and Marketing
AES Electric Limited

ENERGY RETAILERS
DukeSolutions
NewEnergy

FINANCIAL INSTITUTIONS
Credit Suisse First Boston
GE Capital

REGULATORY AGENCIES
OFGEM

GAS AND OIL PRODUCERS
Amerada Hess
Anadarko Petroleum
Conoco
Ocean Energy/Seagull Energy
Petroleos de Venezuela S.A.
Phillips Petroleum Company
Ultramar Diamond Shamrock
Unocal Corporation

LOCAL DISTRIBUTION COMPANIES
Southwestern Energy
TXU Lone Star Gas

PIPELINES
Coastal Gas Services
Colorado Interstate Gas
Transok, Inc.

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<PAGE> 64

INDEPENDENT POWER PRODUCERS
AES Electric

TRANSMISSION COMPANIES
TenneT
National Grid Company plc

COMPETITION

We compete in a market that is new, rapidly evolving and very competitive.
We expect competition to persist and intensify. We currently face competition
from a number of sources.

The companies that compete against us in the provision of software
solutions to the energy industry include:

- a number of smaller companies that offer point solutions exclusively to
the energy market but do not provide the full range of products and
services required by market participants and do not have a significant
international presence;

- a small number of companies that provide a wide range of products and
services exclusively to the energy market but currently do not have a
strong international presence;

- internal development departments of a number of energy participants
developing systems for internal use or for sale to other market
participants; and

- large multi-product/market software companies or financial institutions
that offer or, in the future, may offer financial risk management and
other software addressing the energy market.

We believe that the principal competitive factors with respect to our
software solutions include:

- knowledge of market needs, product performance, scope, functionality,
ease of use and scalability;

- the existence of an international presence;

- the ability to integrate external data sources;

- product and company reputation;

- the existence of a referencable customer base;

- customer service and support; and

- price.

The principal competitors for our strategic consulting services are
customers who have internal expertise as well as large international consulting
and strategy firms. We believe that the principal competitive factors with
respect to our strategic consulting services include:

- subject matter expertise;

- responsiveness to customer needs;

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- reputation;

- comprehensive delivery methodologies; and

- price.

We believe that we have a leadership position in the energy marketplace
because of our international presence, our subject matter expertise and our
ability to provide both software solutions and strategic consulting services to
our customers. See "Risk Factors -- The market for products and services in the
energy industry is competitive, and we expect competition to intensify in the
future; we may not be able to compete successfully" for a description of risks
relating to our competition.

INTELLECTUAL PROPERTY

We rely on a combination of copyright, trademark and trade secret laws,
nondisclosure agreements and other contractual provisions to establish, maintain
and protect our proprietary rights. We have copyright and trade secret rights
for our products, consisting mainly of source code and product documentation. We
attempt to protect our trade secrets and other proprietary information through
agreements with suppliers, non-disclosure agreements with employees and
consultants and other security measures.

We rely on outside licensors for technology that is incorporated into and
is sometimes necessary for the operation of our products. However, we believe we
can obtain replacements from other vendors and we are in the process of
developing replacement products ourselves. For example, the core technology we
acquired from Positron has allowed us to develop similar technology into an
analytical tool that prices options that we license for resale.

EMPLOYEES

As of September 30, 1999, we had 174 full-time employees, consisting of 67
employees in consulting and services, 41 employees in research and development,
32 employees in finance and administration, 25 employees in sales and marketing
and nine employees in customer support. Of such employees, 104 were located in
the United States and 70 were employed in Europe. None of these employees is
covered by any collective bargaining agreements, and to date, we have not
experienced a work stoppage. We believe our relationship with our employees is
good.

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PROPERTIES

Our principal administrative, sales, marketing, services and research and
development facility occupies approximately 17,000 square feet of office space
in New York, New York. The leases expire in September 2004. In addition, we
lease sales, services and research and development offices in the following
cities;

<TABLE>
<CAPTION>
CITY SQUARE FOOTAGE
- ---- --------------
<S> <C>
Dallas, Texas.................................. 5,300
Houston, Texas................................. 4,800
London, England................................ 3,600
Cambridge, England............................. 6,000
</TABLE>

Other than our Cambridge office, which is the headquarters of our strategic
consulting business, each of our offices houses personnel for both our software
and strategic consulting business segments. We believe that our facilities are
adequate for our current needs and that suitable additional or substitute space
will be available as needed to accommodate expansion of our operations.

LEGAL PROCEEDINGS

From time to time we may be subject to legal proceedings and claims in the
ordinary course of our business. We are not aware of any legal proceedings or
claims that are believed will have, individually or in the aggregate, a material
adverse effect on our business, financial condition or results of operations.

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<PAGE> 67

MANAGEMENT

EXECUTIVE OFFICERS, KEY EMPLOYEES AND DIRECTORS

Our executive officers, key employees and directors, and their respective
ages and positions as of September 30, 1999, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ---- --- -----------
<S> <C> <C>
David M. Stoner...................... 58 President, Chief Executive Officer and
Director
Nigel L. Evans....................... 45 Senior Vice President, Director of European
Operations and Director
Brian J. Scanlan..................... 37 Senior Vice President, Chief Technology
Officer and Director
Mark A. Herman....................... 39 Vice President, Chief Financial Officer,
Secretary and Treasurer
Michael B. Morrison.................. 42 Managing Director of Strategic Consulting
Simon Young.......................... 34 Vice President
Lawrence D. Gilson................... 50 Chairman of the Board of Directors
Christopher S. Brothers*............. 33 Director
Anthony H. Bloom*.................... 60 Director
Richard K. Landers*.................. 51 Director
</TABLE>

- -------------------------
* Member of audit and compensation committees.

DAVID M. STONER has served as our President and Chief Executive Officer and
as a director since October 1998. From April 1997 to October 1998, Mr. Stoner
served as President and Chief Operating Officer at SS&C Technologies, Inc., a
provider of asset management software to the financial services industry. From
August 1995 to February 1997, Mr. Stoner was President and Chief Operating
Officer of The Dodge Group, Inc., a software company providing PC-based general
ledger systems. From December 1987 to August 1995, Mr. Stoner served as
Executive Vice President, Worldwide Operations at Marcam Corporation, an
international provider of enterprise applications and services.

NIGEL L. EVANS has served as our Senior Vice President and Director of
European Operations and as a director since May 1998. From 1985 to May 1998, Dr.
Evans served as Chairman and Chief Executive Officer of Caminus Limited,
formerly known as Caminus Energy Limited.

BRIAN J. SCANLAN has served as our Senior Vice President and Chief
Technology Officer since January 1999 and as a director since May 1998. From May
1998 to December 1998, Mr. Scanlan served as President of Zai*Net Software, L.P.
and from 1987 to May 1998 served as President of Zai*Net Software, Inc. See
"Certain Transactions."

MARK A. HERMAN has served as our Chief Financial Officer since February
1999. Mr. Herman worked at GT Interactive Software Corp., a publicly held
software company, as Corporate Controller from November 1994 to March 1996

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<PAGE> 68

and as Vice President and Corporate Controller from March 1996 to February 1999.
Prior to 1994, Mr. Herman held various management positions at companies such as
Grand Union, Deloitte & Touche LLP and PricewaterhouseCoopers LLP.

MICHAEL B. MORRISON has served as our Managing Director of Strategic
Consulting since May 1998 and has worked at Caminus Limited since 1988. Mr.
Morrison has prime responsibility for managing the growth of our strategic
consulting business as it continues to expand throughout Europe. Prior to
joining Caminus, Mr. Morrison served in strategic planning and research
positions at Shell International, the World Bank and Carnegie-Mellon University.

SIMON YOUNG has served as Vice President in our development area since May
1998. From 1988 to May 1998, Mr. Young served as Executive Vice President of
Zai*Net Software, Inc., where he designed and developed high performance online
transaction processing systems for the energy and foreign exchange markets.

LAWRENCE D. GILSON has served as chairman of our board of directors since
May 1998. Mr. Gilson is President of GFI and a founder of each GFI entity
beginning in 1995. He previously founded and was President of Venture
Associates, a leading energy industry consulting firm from 1985 to 1995. When he
and his partners sold Venture Associates to Arthur Andersen & Co. in a two-stage
transaction in 1990 and 1992, Mr. Gilson also became Worldwide Head of Arthur
Andersen's Utility Consulting Practice. Prior to founding Venture Associates,
Mr. Gilson served as Vice President for Corporate Development and Government
Affairs of Amtrak from 1979 to 1983. He is the board chair of Power Measurement
Ltd. and Statordyne LLC and a member of the board of Trace Holdings, LLC.

CHRISTOPHER S. BROTHERS has served as a director since May 1998. Mr.
Brothers is a Senior Vice President of Oaktree Capital Management, LLC. Prior to
joining Oaktree in 1996, Mr. Brothers worked at the New York headquarters of
Salomon Brothers Inc., where he served as a Vice President in the Mergers and
Acquisitions group. Prior to 1992, Mr. Brothers was a Manager in the Valuation
Services group of PricewaterhouseCoopers LLP. Mr. Brothers serves on the boards
of directors of Cherokee International LLC, National Mobile Television, Inc.,
Power Measurement, Ltd. and Trace Holdings, LLC.

ANTHONY H. BLOOM has served as a director since May 1998. Mr. Bloom is an
international investor now based in London. Prior to his relocation to London in
July 1988, he lived in South Africa where he was the Chairman and Chief
Executive of The Premier Group, a multi-billion dollar conglomerate involved in
agribusiness, retail and consumer products, and a member of the boards of
directors of Barclays Bank, Liberty Life Assurance and South African Breweries.
Since moving to the United Kingdom, he has been a member of the board of
directors of RIT Capital Partners plc, the publicly traded, London-based
investment company chaired by Lord Rothschild. He is also currently Deputy
Chairman of Sketchley plc and is Chairman of Cine-UK Ltd.

RICHARD K. LANDERS has served as a director since May 1998. Mr. Landers is
a principal of GFI and a founder of each GFI entity beginning in 1995. From 1986
to 1995, he was a partner of Venture Associates and of Arthur Andersen & Co.
following that firm's acquisition of Venture Associates. From 1979 to 1986, Mr.
Landers held senior planning and strategy positions in Los Angeles and

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Washington, D.C. with Southern California Gas Company and its holding company,
Pacific Enterprises. Before joining Southern California Gas, Mr. Landers served
as a foreign service officer in the U.S. State Department with special
responsibilities for international energy matters.

EXECUTIVE OFFICERS

Each executive officer serves at the discretion of our board of directors
and holds office until his successor is elected and qualified or until his
earlier resignation or removal. There are no family relationships among any of
our directors or executive officers, except that Messrs. Gilson and Stoner are
brothers-in-law.

ELECTION OF DIRECTORS

Our board of directors is divided into three classes, with the members of
each class serving for a staggered three-year term. Our board currently consists
of two Class I directors (Anthony H. Bloom and Richard K. Landers), three Class
II directors (Nigel L. Evans, Lawrence D. Gilson and Brian J. Scanlan) and two
Class III directors (Christopher S. Brothers and David M. Stoner). At each
annual meeting of stockholders, a class of directors will be elected for a
three-year term to succeed the directors of the same class whose terms are then
expiring. The terms of the Class I directors expire upon the election and
qualification of successor directors at the annual meeting of stockholders to be
held in 2000. The terms of the Class II directors expire upon the election and
qualification of successor directors at the annual meeting of stockholders to be
held in 2001. The terms of the Class III directors expire upon the election and
qualification of successor directors at the annual meeting of stockholders to be
held in 2002.

BOARD COMMITTEES

Our board of directors has an audit committee and a compensation committee.
The audit committee reviews the results and scope of the audit and other
services provided by our independent public accountant. The compensation
committee establishes the compensation policies applicable to our executive
officers and administers and grants stock options pursuant to our stock plans.
The current members of the audit and compensation committees are Messrs. Bloom,
Brothers and Landers.

DIRECTOR COMPENSATION

We reimburse directors for reasonable out-of-pocket expenses incurred in
attending meetings of the board of directors and any meetings of its committees.
Each non-employee director is paid $1,500 for attendance at each meeting of the
board of directors or for each telephonic meeting of the board in which he
participates. Each non-employee director is further entitled to $1,500 for each
meeting of a committee of the board attended by the director which is held on a
day other than the day of, or the day before or after, the date of any meeting
of the full board of directors. Other directors are not entitled to compensation
in their capacities as directors. We may, in our discretion, grant stock options
and other

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<PAGE> 70

equity awards to our non-employee directors from time to time under our stock
plans.

As of the date of this prospectus, each of our non-employee directors will
receive an option under our 1999 stock incentive plan to purchase 7,143 shares
of common stock at the initial public offering price. Each option cumulatively
vests as to 25% of the underlying shares on the first anniversary of the date of
grant and monthly thereafter for an additional three years. See "-- Benefit
Plans -- 1999 Stock Incentive Plan" for a description of our 1999 stock
incentive plan.

EXECUTIVE COMPENSATION

The following table sets forth the total compensation paid or accrued for
the years ended December 31, 1998 and 1999 to our:

- president and chief executive officer; and

- our three other executive officers at year-end.

We refer to all of these officers collectively as our Named Executive Officers.

The total compensation paid or accrued below includes compensation paid or
accrued by Caminus LLC, as well as Zai*Net and Caminus Limited. In accordance
with the rules of the Securities and Exchange Commission, the compensation set
forth in the table below does not include medical, group life or other benefits
which are available to all of our salaried employees, and perquisites and other
benefits, securities or property which do not exceed the lesser of $50,000 or
10% of the person's salary and bonus shown in the table. In the table below,
columns required by the regulations of the Securities and Exchange Commission
have been omitted where no information was required to be disclosed under those
columns. The compensation listed below in the "All Other Compensation" column
represents Caminus Limited's contribution to Dr. Evans' personal pension plan.
Dr. Evans' compensation in U.S. dollars is based on an exchange ratio of
approximately $1.65 and $1.62 per L1 as of December 31, 1998 and 1999,
respectively.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------- AWARDS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS SECURITIES UNDERLYING OPTIONS COMPENSATION
- --------------------------- ---- --------- --------- ----------------------------- ------------
<S> <C> <C> <C> <C> <C>
David M. Stoner............ 1999 $250,000 $125,000 -- --
President and Chief 1998 42,242 25,000 -- --
Executive Officer
Nigel L. Evans............. 1999 330,000 162,000 -- --
Senior Vice President and 1998 307,450 124,278 -- 21,522
Director of European
Operations
Brian J. Scanlan........... 1999 162,500 32,542 -- --
Senior Vice President and 1998 150,000 46,042 -- --
Chief Technology Officer
Mark A. Herman............. 1999 140,674 42,202 54,040 --
Vice President and Chief
Financial Officer
</TABLE>

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OPTION GRANTS IN LAST FISCAL YEAR. The following table sets forth grants
of stock options to our Named Executive Officers for the year ended December 31,
1999. During the periods for which financial information is presented in this
prospectus, we have granted no stock appreciation rights. The exercise price per
share was below the fair market value of the common stock on the date of grant
as determined by the board of directors. The potential realizable value is
calculated based on the ten-year term of the option. It is calculated assuming
that the fair market value of common stock on the date of grant appreciates at
the indicated rate compounded annually for the entire term of the option and
that the option is exercised and sold on the last day of its term for the
appreciated stock price. These numbers are calculated based on the requirements
of the Securities and Exchange Commission and do not reflect our estimate of
future stock price growth. Mr. Herman's option vests and becomes exercisable as
to 25% of the shares on February 8, 2000 and as to 75% of the shares in 36 equal
monthly installments on the 8th of each month commencing in March 2000.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS EXERCISE ANNUAL RATES OF STOCK PRICE
SECURITIES GRANTED TO PRICE APPRECIATION FOR OPTION
UNDERLYING EMPLOYEES IN PER MARKET VALUE TERM
OPTIONS FISCAL YEAR SHARE PER SHARE EXPIRATION -----------------------------
NAME GRANTED(#) (%) ($/SH) ($/SH) DATE 0% ($) 5%($) 10%($)
---- ---------- ------------ -------- ------------ ---------- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David M. Stoner...... -- -- -- -- -- -- -- --
Nigel L. Evans....... -- -- -- -- -- -- -- --
Brian J. Scanlan..... -- -- -- -- -- -- -- --
Mark A. Herman....... 54,040 14.3% $5.46 $6.72 2/8/09 $68,090 $296,743 $646,856
</TABLE>

FISCAL YEAR-END OPTION VALUES. The following table provides certain
summary information concerning stock options held as of December 31, 1999 by our
Named Executive Officers. No options were exercised during fiscal 1999 by any of
the Named Executive Officers. The value of unexercised in-the-money options at
fiscal year-end is based on $14.00 per share, the assumed initial public
offering price, less the exercise price per share.

FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY
FISCAL YEAR-END(#) OPTIONS AT FISCAL YEAR-END
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
David M. Stoner.......... -- -- -- --
Nigel L. Evans........... -- -- -- --
Brian J. Scanlan......... -- -- -- --
Mark A. Herman........... -- 54,040 -- $461,498
</TABLE>

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BENEFIT PLANS

1998 STOCK INCENTIVE PLAN. Our 1998 stock incentive plan was adopted by
our former management committee and approved by our former members in February
1999. The 1998 plan authorizes the issuance of up to 947,886 shares of our
common stock. As of September 30, 1999, options to purchase an aggregate of
926,258 shares of our common stock at a weighted average exercise price of $4.48
per share were outstanding under the 1998 plan. Upon the closing of this
offering, no additional grants of stock options or other awards will be made
under the 1998 plan.

1999 STOCK INCENTIVE PLAN. Our 1999 stock incentive plan was adopted by
our board of directors and approved by our stockholders in September 1999. The
1999 plan is intended to replace our 1998 plan. Up to 502,312 shares of our
common stock (subject to adjustment in the event of stock splits and other
similar events) may be issued pursuant to awards granted under the 1999 plan.

The 1999 plan provides for the grant of incentive stock options intended to
qualify under Section 422 of the Internal Revenue Code, nonstatutory stock
options, restricted stock awards and other stock-based awards.

Our officers, employees, directors, consultants and advisors and those of
our subsidiaries are eligible to receive awards under the 1999 plan. Under
present law, however, incentive stock options may only be granted to employees.
No participant may receive any award for more than 450,000 shares in any
calendar year. As of the date of this prospectus, options to purchase an
aggregate of 28,572 shares of our common stock at an exercise price per share
equal to the initial public offering price will be outstanding under the 1999
plan.

Optionees receive the right to purchase a specified number of shares of our
common stock at a specified option price and subject to such other terms and
conditions as are specified in connection with the option grant. We may grant
options at an exercise price less than, equal to or greater than the fair market
value of our common stock on the date of grant. Under present law, incentive
stock options and options intended to qualify as performance-based compensation
under Section 162(m) of the Internal Revenue Code may not be granted at an
exercise price less than the fair market value of the common stock on the date
of grant or less than 110% of the fair market value in the case of incentive
stock options granted to optionees holding more than 10% of our voting power.
The 1999 plan permits our board of directors to determine how optionees may pay
the exercise price of their options, including by cash, check or in connection
with a "cashless exercise" through a broker, by surrender to us of shares of
common stock, by delivery to us of a promissory note, or by any combination of
the permitted forms of payment.

As of September 30, 1999, approximately 178 persons would have been
eligible to receive awards under the 1999 plan, including our four executive
officers and our four non-employee directors. The granting of awards under the
1999 plan is discretionary.

Our board of directors administers the 1999 plan. Our board of directors
has the authority to adopt, amend and repeal the administrative rules,
guidelines and practices relating to the plan and to interpret its provisions.
It may delegate

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authority under the 1999 plan to one or more committees of the board of
directors and, subject to certain limitations, to one or more of our executive
officers. Subject to any applicable limitations contained in the 1999 plan, our
board of directors or a committee of the board of directors or executive officer
to whom our board of directors delegates authority, as the case may be, selects
the recipients of awards and determines:

- the number of shares of common stock covered by options and the dates
upon which such options become exercisable;

- the exercise price of options;

- the duration of options; and

- the number of shares of common stock subject to any restricted stock or
other stock-based awards and the terms and conditions of such awards,
including the conditions for repurchase, issue price and repurchase
price.

In the event of a merger, liquidation or other acquisition event, our board
of directors is authorized to provide for outstanding options or other
stock-based awards to be assumed or substituted for by the acquiror. If the
acquiror refuses to assume or substitute for outstanding options, they will
accelerate, becoming fully exercisable and free of restrictions, prior to
consummation of the acquisition event. In addition, following an acquisition
event, under some circumstances, an assumed or substituted award will accelerate
if the employment of its holder with the acquiror is terminated within one year
of the acquisition event.

No award may be granted under the 1999 plan after September 2009, but the
vesting and effectiveness of awards previously granted may extend beyond that
date. Our board of directors may at any time amend, suspend or terminate the
1999 plan, except that no award granted after an amendment of the 1999 plan and
designated as subject to Section 162(m) of the Internal Revenue Code by our
board of directors shall become exercisable, realizable or vested, to the extent
the amendment was required to grant such award, unless and until such amendment
is approved by our stockholders.

1999 EMPLOYEE STOCK PURCHASE PLAN. Our 1999 employee stock purchase plan
was adopted by our board of directors and approved by our stockholders in
September 1999. The purchase plan authorizes the issuance of up to a total of
95,238 shares of our common stock to participating employees.

The following employees, including our directors who are employees and
employees of any participating subsidiaries, are eligible to participate in the
purchase plan:

- Employees who are customarily employed for more than 20 hours per week
and for more than five months per year; and

- Employees employed for at least three months prior to enrolling in the
purchase plan.

Employees who would immediately after the grant own 5% or more of the total
combined voting power or value of our stock or any subsidiary are not eligible
to participate.

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On the first day of a designated payroll deduction period, or "offering
period," we will grant to each eligible employee who has elected to participate
in the purchase plan an option to purchase shares of our common stock as
follows: the employee may authorize between 1% to 10% of his or her base pay to
be deducted by us from his or her base pay during the offering period. On the
last day of the offering period, the employee is deemed to have exercised the
option, at the option exercise price, to the extent of accumulated payroll
deductions. Under the terms of the purchase plan, the option price is an amount
equal to 85% of the per share closing price of our common stock on either the
first day or the last day of the offering period, whichever is lower. In no
event may an employee purchase under the purchase plan in any year a number of
shares which exceeds the number of shares determined by dividing $25,000 by the
average market price of a share of common stock on the commencement date of the
offering period. Our board of directors will choose the timing and length of
each offering periods.

An employee who is not a participant on the last day of the offering period
is not entitled to exercise any option, and the employee's accumulated payroll
deductions will be refunded. An employee's rights under the purchase plan
terminate upon voluntary withdrawal from the purchase plan at any time, or when
the employee ceases employment for any reason.

401(k) PLAN. We have adopted an employee savings and retirement plan
qualified under Section 401 of the Internal Revenue Code and covering all of our
employees. Pursuant to the 401(k) plan, employees may elect to reduce their
current compensation by up to the statutorily prescribed annual limit and have
the amount of such reduction contributed to the 401(k) plan. We may make
matching or additional contributions to the 401(k) plan in amounts to be
determined annually by our board of directors.

EMPLOYMENT AGREEMENTS

On October 21, 1998, we entered into an employment agreement with David M.
Stoner. Under the terms of his agreement, Mr. Stoner's employment as president
and chief executive officer will continue until October 21, 2001, unless sooner
terminated. Mr. Stoner receives a base salary of $250,000 per year and is
eligible to receive a bonus for service during 1999 of up to $125,000. Mr.
Stoner's eligibility for bonuses for years after 1999 will be determined by our
board of directors.

In connection with Mr. Stoner's employment agreement, we have provided Mr.
Stoner with two loans. The first loan is for $100,000 at an annual interest rate
of 9% and is evidenced by a one-year demand recourse promissory note, dated
October 30, 1998. The second loan is for $1,000,000 at an annual interest rate
of 9% and is evidenced by a ten-year secured recourse promissory note dated
October 21, 1998. The second loan is secured by Mr. Stoner's equity, profits and
ownership of us pursuant to a pledge and security agreement. The purpose of the
second loan was to provide Mr. Stoner with the entire purchase price for
3,364,396 shares of Series A membership interest in Caminus LLC, which will
convert into 320,418 shares of common stock prior to this offering.

Upon the closing of this offering, Mr. Stoner will receive a bonus payment
equal to (1) the then outstanding principal balance of the second loan, which
was

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approximately $1,083,500 as of September 30, 1999, and (2) an award of 160,209
shares of common stock.

If we terminate Mr. Stoner's employment with cause or if Mr. Stoner resigns
for no good reason, he will receive all accrued compensation and vested
benefits, excluding any bonus amounts. If we terminate his employment without
cause or if Mr. Stoner resigns for good reason, Mr. Stoner will receive all
unpaid accrued compensation, vested benefits -- including any unpaid minimum
bonus with respect to the first twelve months of his employment -- and a
severance benefit equal to his base salary until the earlier of October 21, 2001
or twelve months following the date of termination. Upon Mr. Stoner's
termination, we have the right to purchase all Caminus securities then owned by
Mr. Stoner. In most cases, the purchase price paid by us will be the fair market
value of the securities on the date of termination.

Mr. Stoner's agreement contains a confidentiality provision and further
provides that Mr. Stoner may not work for, or hold 5% or more of the outstanding
capital stock of a publicly traded corporation, which is a competing business
anywhere in the world for one year after the conclusion of his employment. A
competing business is one that develops and markets (1) software or consulting
advisory services used to analyze or influence client and industry decisions
regarding energy pricing, investments, regulatory policy and financial and
strategic planning for clients in the natural gas, crude oil, refined products,
electric power and utility industries and (2) software or related products or
services which otherwise facilitate transactions or other participation in
competitive energy markets.

On May 12, 1998, Caminus Energy Limited, our wholly owned subsidiary,
entered into a service agreement with Dr. Nigel L. Evans, which was amended on
January 14, 2000. Under the terms of his agreement, Dr. Evans' employment as
chief executive officer of Caminus Limited will continue until May 5, 2001,
renewing annually for successive one-year terms unless sooner terminated. From
May 12, 1998 through the fiscal period ending December 31, 1999, Dr. Evans will
have received a base salary of L200,000 ($329,218 as of September 30, 1999) per
year, subject to annual review and increases, and will have been eligible to
receive an annual performance bonus, targeted at L100,000 ($164,609 as of
September 30, 1999). For fiscal year 1999, Dr. Evans will be paid a bonus of
$162,000. Commencing January 31, 2000, Dr. Evans' base salary will be L163,500
per year and Dr. Evans will no longer be eligible to receive an annual bonus.
Ten days after the closing of this offering, Dr. Evans will receive a one-time
bonus of L158,723. Dr. Evans is also eligible to participate in Caminus
Limited's profit sharing plan for key employees. If we terminate Dr. Evans'
employment without cause or Dr. Evans terminates his employment due to a
constructive dismissal, he will receive his current salary, bonus and other
benefits for twelve months from the date of termination. If Dr. Evans resigns,
he will receive all salary, bonus and other benefits that have accrued as of the
date of termination.

Dr. Evans' agreement contains a confidentiality provision and further
provides that he may not directly or indirectly act as an employee or
consultant, or hold more than a 5% investment in any class of securities quoted
on a stock exchange, in a competing business for one year after the date of
termination. A competing business has the same meaning in Dr. Evans' agreement
as in Mr. Stoner's agreement, as described above. On May 12, 1998, Dr. Evans
also entered into a

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covenant not to compete with Caminus Energy Limited, which extends his
obligations not to compete for two years after termination in certain
circumstances.

On May 12, 1998, Zai*Net Software, L.P., which was our majority-owned
subsidiary at the time, entered into an employment agreement with Brian J.
Scanlan, which was amended November 8, 1999. In March 1999, we assumed the
employment agreement when Zai*Net Software, L.P. was merged into us. Under the
terms of his agreement, Mr. Scanlan's employment as Senior Vice President, Chief
Technology Officer will continue until May 12, 2001, unless sooner terminated.
Mr. Scanlan currently receives a base salary of $175,000 per year, subject to
annual review and increases, and is eligible to participate in our annual profit
sharing plan for key employees. For fiscal year 1999, Mr. Scanlan will be paid a
bonus of $32,542. If we terminate Mr. Scanlan's employment with cause or if he
resigns for no good reason, Mr. Scanlan will receive all accrued compensation
and vested benefits as of the termination date. If we terminate Mr. Scanlan's
employment without cause or if he resigns for good reason, Mr. Scanlan will
receive all accrued compensation and vested benefits as of the termination date
and a severance benefit of his base salary for the remainder of the term of his
agreement.

Mr. Scanlan is also a party to a covenant not to compete, dated May 12,
1998, which contains a confidentiality provision and further provides that he
may not perform services, or hold 5% or more of the outstanding capital stock of
a publicly traded corporation, in a competing business other than on behalf of
us or our affiliates anywhere in the world for the greater of (1) three and
one-half years from the date of the agreement or (2) two years after the date of
termination. A competing business includes developing, licensing, installing and
maintaining commodities trading and risk management software and providing
consulting and support services related to such software activities to the
foreign exchange, natural gas, crude oil, refined products and electric power
industries and software or related products or services which otherwise
facilitate transactions or other participation in competitive energy markets.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No executive officer has served as a director or member of the compensation
committee or other committee serving an equivalent function of any other entity
whose executive officers served as a director or member of the compensation
committee of our board of directors. During 1999, our board of directors,
including our chief executive officer, determined the compensation of our
executive officers.

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CERTAIN TRANSACTIONS

ZAI*NET SOFTWARE, L.P.

On May 12, 1998, we entered into a purchase agreement with Zai*Net
Software, Inc., Zai*Net Software, L.P. and Brian Scanlan, our Chief Technology
Officer and a director. At the time of the transaction, Mr. Scanlan was
unaffiliated with us. Pursuant to the agreement, we purchased a 1% general
partnership interest and a 70% limited partnership interest in Zai*Net Software,
L.P. from Mr. Scanlan and Zai*Net Software, Inc., respectively. We paid
$7,740,000 to Zai*Net Software, Inc., an entity wholly owned by Mr. Scanlan, for
such interests. Lawrence D. Gilson, Richard K. Landers and Christopher S.
Brothers, three of our original management committee members and affiliates of
either GFI or Oaktree Capital Management, were primarily responsible for
negotiating the terms of the purchase agreement on our behalf, and Mr. Scanlan
was primarily responsible for negotiating on behalf of Zai*Net Software, L.P. In
determining the purchase price for our interest in Zai*Net Software, L.P., we
examined the financial results and market values of comparable publicly traded
software companies. We also considered the expected synergies from the
acquisition of Zai*Net Software, L.P. and Caminus Limited, including geographic
reach, product development expertise, the ability to cross-sell software and
services, improved administration and recruiting and increased market
differentiation. On May 12, 1998, Mr. Scanlan entered into a three-year
employment agreement with Zai*Net Software L.P. For details in connection with
Mr. Scanlan's employment agreement, see "Management -- Employment Agreements."

As part of a closing adjustment in connection with our purchase of the
membership interest in Zai*Net Software, L.P., we loaned Zai*Net Software, L.P.
$400,000 to be paid to Zai*Net Software, Inc. as a cash distribution. Zai*Net
Software, L.P. issued us a one-year note payable for the principal amount plus
8% interest, due May 12, 1999. Zai*Net Software, Inc. used the proceeds for
working capital purposes. Zak Associates, Inc., an entity controlled by Mr.
Scanlan, repaid approximately $121,000 of the $400,000 on behalf of Zai*Net
Software, L.P. pursuant to the conversion agreement dated December 31, 1998 and
the balance of the note from Zai*Net Software, L.P. to us, in the amount of
$283,155, was cancelled.

In connection with our acquisition of partnership interests in Zai*Net
Software, L.P., we and certain of our original limited liability company
investors paid an additional $2,187,500 to Zak Associates, Inc., the successor
to Zai*Net Software, Inc., in June 1999 and will pay an additional $2,187,500 to
Zak Associates, Inc. on April 15, 2000. These investors include GFI, OCM Caminus
Investment, Inc. and RIT Capital Partners plc, which entities are each principal
stockholders of us.

Subsequent to the closing of the Zai*Net acquisition, Zai*Net Software,
Inc. transferred and assigned its remaining 29% partnership interest in Zai*Net
Software, L.P. to Rooney Software, L.L.C. On December 31, 1998, Rooney entered
into a conversion agreement with us, Zak Associates, Inc., Zai*Net Software,
L.P. and Brian Scanlan whereby the remaining 29% partnership interest in Zai*Net
Software, L.P. was converted into 21,579,728 shares of Series A membership
interest of Caminus LLC, which will convert into 2,055,210 shares of our common
stock prior to this offering. Upon the closing of the December 1998 transaction,
we owned 100% of the membership interest in Zai*Net Software, L.P., thereby
creating

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a wholly owned subsidiary. In March 1999, Zai*Net Software, L.P. was merged with
and into us.

CAMINUS LIMITED

On May 12, 1998, we entered into a stock purchase agreement with Caminus
Energy Limited, an English corporation currently known as Caminus Limited, and
its two stockholders, Dr. Nigel L. Evans and Dr. Michael B. Morrison. Dr. Evans
is our Director of European Operations and a director and Dr. Morrison is a
principal stockholder of us. At the time of the acquisition, Drs. Evans and
Morrison were unaffiliated with us. Pursuant to the agreement, we paid
$3,022,924 cash for all of the issued and outstanding shares, an aggregate of
950 ordinary shares, of Caminus Limited held by Drs. Evans and Morrison. Drs.
Evans and Morrison also received 6,055,912 and 4,037,275 shares of Series A
membership interest in us, respectively, which will convert into 576,753 and
384,502 shares of our common stock, respectively, prior to this offering. As
additional consideration, Drs. Evans and Morrison received an option to purchase
3,030,000 and 2,020,000 shares of Series B membership interest in us,
respectively, at an exercise price per share of $.30 per share ($3.12 per share
of common stock on an as-converted basis) which will convert into options to
purchase 288,571 and 192,381 shares of our common stock, respectively, prior to
this offering. Messrs. Evans and Morrison plan to exercise their options on a
cashless basis immediately prior to the closing of this offering for a net total
of 223,638 and 149,092 shares of our common stock, respectively. The options
will vest in full upon the closing of this offering. Messrs. Gilson, Landers and
Brothers were primarily responsible for negotiating the terms of the stock
purchase agreement on our behalf, and Drs. Evans and Morrison were primarily
responsible for negotiating on behalf of Caminus Limited. In determining the
purchase price for Caminus Limited, we examined the financial results and market
values of comparable publicly traded companies and considered the expected
synergies from the acquisition of Caminus Limited and Zai*Net Software, L.P., as
described above. On May 12, 1998, each of Drs. Evans and Morrison also entered
into a three-year employment agreement with Caminus Limited. For details in
connection with Dr. Evans' employment agreement, see "Management -- Employment
Agreements."

On May 12, 1998, Caminus Limited, our wholly owned subsidiary, entered into
a service agreement with Dr. Michael B. Morrison. Under the terms of his
agreement, Dr. Morrison's employment as managing director of Caminus Limited
will continue until May 5, 2001, renewing annually for successive one-year terms
unless sooner terminated. Dr. Morrison receives a base salary of L167,000
($274,897 as of September 30, 1999) per year, subject to annual review and
increases, and is eligible to receive an annual performance bonus, targeted at
L83,000 ($136,626 as of September 30, 1999). Dr. Morrison is also eligible to
participate in our profit sharing plan for key employees. If we terminate Dr.
Morrison's employment without cause, he will receive his current salary, bonus
and other benefits for twelve months from the date of termination. If Dr.
Morrison resigns, he will receive all salary, bonus and other benefits that have
accrued as of the date of termination.

Dr. Morrison's agreement contains a confidentiality provision and further
provides that he may not directly or indirectly act as an employee or
consultant, or hold more than a 5% investment in any class of securities quoted
on a stock exchange, in a competing business for one year after the date of
termination. A

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competing business has the same meaning in Dr. Morrison's agreement as in
Mr. Stoner's agreement, as described above. On May 12, 1998, Dr. Morrison also
entered into a covenant not to compete with Caminus Limited, which extends his
obligations not to compete for two years after termination in certain
circumstances.

GFI

In April 1998, GFI purchased 1,682,198 shares of Series A membership
interest at a purchase price of $0.297 per share. These shares will convert into
an aggregate of 160,209 shares of our common stock prior to this offering.

Two members of our board of directors, Lawrence D. Gilson and Richard K.
Landers, are GFI principals. As part of our ongoing relationship with GFI, we
entered into an arrangement pursuant to our operating agreement whereby GFI
provides substantial ongoing strategic advice, as well as financial, tax and
general administrative services for us and, in return, we pay GFI an annual fee,
payable in monthly installments. During the period from our inception (April 29,
1998) through December 31, 1998 and the nine months ended September 30, 1999,
such fees were $160,000 and $293,310, respectively. We and GFI have agreed to
terminate GFI's advisory arrangement effective as of our reorganization from a
limited liability company to a corporation. As consideration for GFI's agreement
to terminate the formal advisory arrangement, we have agreed to pay GFI a
$1,300,000 fee from the net proceeds of the initial public offering.

Additionally, as consideration for its investment in us, we granted an
option to GFI to acquire a 10% membership interest in us. This percentage
interest is protected from any dilution which would result from the issuance of
additional membership interests in us; however, the anti-dilution provision does
not extend to common stock to be issued upon the conversion of the membership
interest. The exercise price of the option is the sum of $1,837,500 less 10% of
any distributions of cash or property from us to our membership interest
holders, plus 10% of any additional cash or property paid to us from our
membership interest holders. GFI will exercise its option immediately prior to
this offering on a cashless basis.

SS&C TECHNOLOGIES, INC.

Prior to assuming his position as our president and chief executive officer
in October 1998, David M. Stoner was president and chief operating officer and a
director of SS&C Technologies, Inc., a founding investor in Caminus LLC. On May
12, 1998, SS&C invested $5,500,000 in us and received 18,504,176 shares of our
Series A membership interest and an option to purchase 8,410,000 shares of our
Series B membership interest. We also entered into two distributor agreements
with SS&C -- one in which we appointed SS&C as a non-exclusive distributor and
marketer of certain of our products, and another in which SS&C appointed us as
the exclusive distributor and marketer of certain of its products. The first
agreement provided that the option to purchase membership interests would vest
incrementally according to the sales of our products by SS&C. Such agreement was
effectively terminated when we purchased the option from SS&C, as described in
the immediately following paragraph. The second agreement was terminated and
replaced with a new distributor agreement on December 31, 1998. The new
distribution agreement, as amended, provides that we must purchase licenses to
distribute SS&C products on a quarterly basis through the fourth quarter of the
year 2000, for a total aggregate license distribution fee of not less than
$2,750,000. We

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have not licensed SS&C products nor do we currently intend to license any SS&C
products. If, however, we determine in the future to license SS&C products, fees
collected by us would be applied as an offset against the aggregate license
distribution fees we owe SS&C.

On December 31, 1998, we repurchased all of SS&C's shares of Series A
membership interest and its option to purchase shares of Series B membership
interest for a total consideration of $2,250,000. At this time we granted SS&C a
new option to purchase 3,636,309 shares of Series B membership interest, which
became fully vested and exercisable on the same day for an aggregate exercise
price of $2,250,000. On March 29, 1999, we entered into an agreement with SS&C
to reduce the size of its option to purchase shares of Series B membership
interest to 2,909,047 and the exercise price was proportionately reduced to
$1,800,000. In consideration for this reduction we will pay SS&C $250,000 on
December 31, 1999. The option to purchase 2,909,047 shares of Series B
membership interest at an exercise price of $0.62 per share will be exercised in
connection with this offering for 277,052 shares of our common stock ($6.50 per
share of common stock on an as-converted basis).

OCM CAMINUS INVESTMENT, INC.

OCM Caminus Investment, Inc. is a founding investor in Caminus LLC and a
principal stockholder. In March 1999, we borrowed $1,250,000 from OCM Principal
Opportunities Fund, L.P., an affiliate of OCM Caminus Investment, Inc. On March
31, 1999 we issued a promissory note in the principal amount of such loan to OCM
Principal Opportunities Fund at an annual interest rate of 10%. The promissory
note required us to pay a 1% origination fee upon funding of the loan. We paid
the loan in full on its due date of June 30, 1999.

FLEET BANK PLEDGE AGREEMENTS

On June 23, 1999, we entered into a credit agreement with Fleet Bank, which
provides for revolving loans and working capital loans in an aggregate principal
amount of up to $5,000,000. Pursuant to the agreement, Fleet Bank maintains a
first and prior security interest in and lien on at least 75% of our capital
stock. To meet this demand, three of our stockholders pledged their capital
stock as collateral for the loan in pledge agreements with Fleet Bank, dated
June 23, 1999:

- Brian J. Scanlan granted a security interest to the bank with respect to
12,555,478 shares of Series A membership interest, which will convert
into 1,195,759 shares of our common stock prior to this offering.

- GFI granted a security interest to the bank with respect to 1,682,198
shares of Series A membership interest, which will convert into 160,209
shares of our common stock prior to this offering, and 11,392,731 shares
of Series C membership interest which were subject to the exercise of an
option at the time, which will convert into 1,085,021 shares of our
common stock. GFI will exercise this option prior to this offering.

- OCM Caminus Investment, Inc., a principal stockholder of our company,
granted a security interest to the bank with respect to 37,176,571 shares
of Series A membership interest, which will convert into 3,540,622 shares
of our common stock prior to this offering.

As of September 30, 1999, there was $2,000,000 outstanding under our credit
agreement with Fleet Bank. We intend to use a portion of the proceeds from this

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offering to repay all amounts outstanding under the credit agreement and to
terminate the credit agreement upon the closing of this offering.

EMPLOYMENT ARRANGEMENTS

On May 12, 1998, Zai*Net Software, L.P., which was our majority owned
subsidiary at the time, entered into an employment agreement with Simon Young,
who owns more than 5% of our outstanding stock. The agreement was later amended
on November 8, 1999. Under the terms of his agreement, Mr. Young's employment as
Vice President will continue until May 12, 2001, unless sooner terminated. Mr.
Young currently receives a base salary of $164,286 per year, subject to annual
review and increases. If we terminate Mr. Young's employment with cause or if he
resigns for no good reason, Mr. Young will receive all accrued compensation and
vested benefits as of the termination date. If we terminate Mr. Young's
employment without cause or if he resigns for good reason, Mr. Young will
receive all accrued compensation and vested benefits as of the termination date
and a severance benefit of his base salary for the remainder to the term of his
agreement.

Mr. Young is also a party to a covenant not to compete, dated May 12, 1998,
which contains a confidentiality provision and further provides that he may not
perform services, or hold 5% or more of the outstanding capital stock of a
publicly traded corporation, in a competing business, other than on behalf of us
or our affiliates, anywhere in the world for the greater of (1) three and
one-half years from the date of the agreement or (2) two years after the date of
termination of his employment. A competing business includes a business which
develops, licenses, installs and maintains commodities trading and risk
management software and provides consulting and support services related to such
software activities to the foreign exchange, natural gas, crude oil, refined
products and electric power industries.

On May 12, 1998, Caminus Energy Limited, our wholly owned subsidiary,
entered into a service agreement with Dr. Michael Morrison, which was amended on
November 8, 1999 and on January 14, 2000. Under the terms of his agreement, Dr.
Morrison's employment as Managing Director of Caminus Limited will continue
until May 5, 2001, renewing annually for successive one-year terms unless sooner
terminated. From May 12, 1998 through the fiscal period ending December 31,
1999, Dr. Morrison will have received a base salary of L167,000 ($274,897 as of
September 30, 1999) per year, subject to annual review and increases, and will
have been eligible to receive an annual performance bonus, targeted at L83,000
($136,625 as of September 30, 1999). Commencing January 31, 2000, Dr. Morrison's
base salary will be L136,500 per year and Dr. Morrison will no longer be
eligible to receive an annual bonus. Ten days after the closing of this
offering, Dr. Morrison will receive a one-time bonus of L131,977. Dr. Morrison
is also eligible to participate in Caminus Limited's profit sharing plan for key
employees. If we terminate Dr. Morrison's employment without cause or Dr.
Morrison terminates his employment due to a constructive dismissal, he will
receive his current salary, bonus and other benefits for twelve months from the
date of termination. If Dr. Morrison resigns, he will receive all salary, bonus
and other benefits that have accrued as of the date of termination.

Dr. Morrison's agreement contains a confidentiality provision and further
provides that he may not directly or indirectly act as an employee or
consultant, or

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hold more than a 5% investment in any class of securities quoted on a stock
exchange, in a competing business for one year after the date of termination. A
competing business includes a business which develops and markets consulting
advisory services and supports models used to analyze or influence client and
industry decisions regarding energy pricing, investments, regulatory policy and
provides financial and strategic planning for clients in the natural gas, crude
oil, refined products, electric power and utility industries. On May 12, 1998
Dr. Morrison also entered into a covenant not to compete with Caminus Energy
Limited, which extends his obligations not to compete for two years after
termination in certain circumstances.

For a description of certain employment and other arrangements between our
Named Executive Officers and us, see "Management -- Employment Agreements."

RIGHTS OFFERING

In July 1999, we conducted a rights offering whereby existing holders of
shares of our Series A membership interest were given the opportunity to
purchase additional Series A shares on a pro rata basis of the total $12 million
offering. We used the proceeds from the rights offering to purchase DC Systems,
pay the related transaction fees and for working capital. In connection with the
rights offering, the following directors, executive officers and 5% stockholders
purchased from us the stated number of shares of Series A membership interest:

- David Stoner purchased 254,618 shares, which will convert into 24,249
shares of our common stock prior to this offering;

- Nigel Evans purchased 212,182 shares, which will convert into 20,208
shares of our common stock prior to this offering;

- Brian Scanlan purchased 212,182 shares, which will convert into 20,208
shares of our common stock prior to this offering;

- OCM Caminus Investment, Inc. purchased 4,493,143 shares, which will
convert into 427,918 shares of our common stock prior to this offering;

- RIT Capital Partners plc purchased 3,394,909 shares, which will convert
into 323,324 shares of our common stock prior to this offering; and

- Michael Morrison purchased 127,309 shares, which will convert into 12,125
shares of our common stock prior to this offering.

CONFLICT-OF-INTEREST POLICY

We have adopted a policy providing that all material transactions between
us and our officers, directors and other affiliates must be:

- Approved by a majority of the members of our board of directors and by a
majority of the disinterested members of our board of directors; and

- On terms no less favorable to us than could be obtained from unaffiliated
third parties.

81
<PAGE> 83

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial
ownership of our common stock as of September 30, 1999, and as adjusted to
reflect the sale of the shares of common stock in this offering, by:

- each person or entity we know to own beneficially more than 5% of our
common stock;

- each of our directors;

- each of the Named Executive Officers;

- all directors and executive officers as a group; and

- each of the other selling stockholders.

Except as indicated below, none of these persons or entities has a
relationship with us or, to our knowledge, any of the underwriters or their
respective affiliates. Unless otherwise indicated, each person or entity named
in the table has sole voting power and investment power, or shares such power
with his or her spouse, with respect to all shares of capital stock listed as
owned by such person or entity.

As of September 30, 1999, there were 11,036,977 shares of common stock
outstanding. The number of shares beneficially owned by each stockholder is
determined under rules promulgated by the Securities and Exchange Commission and
assumes the underwriters do not exercise their over-allotment option. The
information is not necessarily indicative of beneficial ownership for any other
purpose. Under these rules, beneficial ownership includes any shares as to which
the stockholder has sole or shared voting power or investment power and any
shares as to which the stockholder has the right to acquire beneficial ownership
within 60 days after September 30, 1999 through the exercise of any stock
option, warrant or other right. The inclusion in the following table of those
shares, however, does not constitute an admission that the named stockholder is
a direct or indirect beneficial owner of those shares.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO THE OFFERING NUMBER OF THE OFFERING
------------------- SHARES --------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------------ --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
5% STOCKHOLDERS
OCM Principal Opportunities
Fund, L.P.(1)................... 4,387,636 39.8% 434,657 3,952,979 27.1%
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071
Brian J. Scanlan(2)............... 1,222,470 11.1 0 1,222,470 8.4
747 Third Avenue
New York, NY 10017
Nigel L. Evans.................... 820,599 7.4 89,455 731,144 5.0
Caminus Energy Limited
Caminus House, Castle Park
Cambridge CB3 0RA
United Kingdom
RIT Capital Partners plc(3)....... 1,140,147 10.3 114,015 1,026,132 7.0
Spencer House
27 St. James's Place
London SWIA 1NR
United Kingdom
</TABLE>

82
<PAGE> 84

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO THE OFFERING NUMBER OF THE OFFERING
------------------- SHARES --------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT OFFERED NUMBER PERCENT
- ------------------------ --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
Simon Young(4).................... 647,257 5.8% 0 647,257 4.4%
Caminus LLC
3 America Square
London EC3N 2LR
United Kingdom
OTHER DIRECTORS AND EXECUTIVE
OFFICERS
David M. Stoner................... 504,877 4.6 0 504,877 3.5
Lawrence D. Gilson(5)............. 459,348 4.2 45,935 413,413 2.8
Christopher S. Brothers(1)........ 4,387,636 39.8 434,657 3,952,979 27.1
Anthony H. Bloom(3)............... 1,140,147 10.3 114,015 1,026,132 7.0
Richard K. Landers(5)............. 459,348 4.2 45,935 413,413 2.8
Mark A. Herman.................... -- -- -- -- --
All executive officers and
directors as a group (8
persons)(6)..................... 8,535,077 77.3 684,062 7,851,015 53.7

OTHER SELLING STOCKHOLDERS
Michael B. Morrison............... 545,719 4.9 59,637 486,082 3.3
GFI Two LLC(5).................... 459,348 4.2 45,935 413,413 2.8
Durham Enterprises Limited........ 283,610 2.6 28,361 255,249 1.7
SS&C Technologies, Inc. .......... 277,052 2.5 27,705 249,347 1.7
</TABLE>

- -------------------------
* Less than 1%

(1) Christopher S. Brothers is a Senior Vice President of Oaktree Capital
Management, LLC, a registered investment adviser under the Investment
Advisers Act of 1940. Oaktree Capital Management, LLC is the general partner
of OCM Principal Opportunities Fund, L.P. and may be deemed to beneficially
own these shares. Mr. Brothers and Oaktree Capital Management, LLC disclaim
beneficial ownership of such shares, except to the extent of his and its
direct pecuniary interest therein.

(2) Includes 6,504 shares subject to outstanding stock options that we issued to
Mr. Scanlan's wife which are exercisable within the 60-day period following
September 30, 1999 and 1,195,758 shares which are owned by ZAK Associates,
Inc., an entity which is 100% owned by the Scanlan Family Limited
Partnership. Mr. Scanlan shares voting and dispositive power for the
remaining 20,208 shares of common stock with his wife.

(3) Anthony H. Bloom is a director of RIT Capital Partners plc and may be deemed
to beneficially own these shares. Mr. Bloom disclaims beneficial ownership
of such shares, except to the extent of his direct pecuniary interest
therein.

(4) Includes 39,621 shares owned by Mr. Young's wife and 9,757 shares subject to
outstanding stock options that we issued to Mr. Young's wife which are
exercisable within the 60-day period following September 30, 1999.

83
<PAGE> 85

(5) Lawrence D. Gilson is President of GFI Two LLC and Richard K. Landers is a
principal of GFI Two LLC. Therefore, Messrs. Gilson and Landers may be
deemed to beneficially own these shares. Each of Messrs. Gilson and Landers
disclaims beneficial ownership of such shares, except to the extent of his
direct pecuniary interest therein.

(6) Includes 6,504 shares of common stock subject to an outstanding option that
we issued as described in footnote 2.

In the event that the underwriters' over-allotment option is exercised in
full, the beneficial ownership of certain stockholders will change as follows:

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
NUMBER OF OWNED AFTER
SHARES OFFERED THE OFFERING
IN THE --------------------
OVER-ALLOTMENT NUMBER PERCENT
-------------- --------- -------
<S> <C> <C> <C>
OCM Principal Opportunities Fund, L.P. ......... 6,594 3,946,385 26.1%
Simon Young..................................... 59,788 587,469 3.9
David M. Stoner................................. 50,488 454,389 3.0
Serena Hesmondalgh(1)........................... 9,163 82,472 *
Richard Couron(2)............................... 13,883 124,944 *
</TABLE>

- ---------------
* Less than 1%

(1) Prior to this offering, Serena Hesmondalgh, an employee of ours, had been
issued by us 91,635 shares of our common stock.

(2) Prior to this offering, Richard Couron, our Senior Vice President of Fuels,
owned 138,827 shares of our common stock.

84
<PAGE> 86

DESCRIPTION OF CAPITAL STOCK

After this offering, our authorized capital stock will consist of
50,000,000 shares of common stock, $0.01 par value per share. Immediately prior
to the issuance of 3,572,235 shares of common stock upon the closing of this
offering, we will have outstanding:

- 11,036,977 shares of common stock held by 41 stockholders of record; and

- options to purchase an aggregate of 954,830 shares of common stock with a
weighted average exercise price of $4.76.

For additional information relating to our common stock, certificate of
incorporation and by-laws, please see our certificate of incorporation and
by-laws included as exhibits to the registration statement of which this
prospectus is a part. See "Where You Can Find More Information."

COMMON STOCK

Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive
proportionately any dividends as may be declared by our board of directors. Upon
our liquidation, dissolution or winding up, the holders of common stock are
entitled to receive proportionately our net assets available after the payment
of all debts and other liabilities. Holders of common stock have no preemptive,
subscription, redemption or conversion rights. Our outstanding shares of common
stock are, and the shares offered by us in this offering will be, when issued
and paid for, fully paid and nonassessable.

DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS

We are subject to the provisions of Section 203 of the General Corporation
Law of Delaware. Section 203 prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the person became an interested stockholder, unless
the business combination is approved in a prescribed manner. A "business
combination" includes mergers, asset sales and other transactions resulting in a
financial benefit to the interested stockholder. Subject to certain exceptions,
an "interested stockholder" is a person who, together with affiliates and
associates, owns, or within the prior three years did own, 15% or more of the
corporation's voting stock.

Our certificate of incorporation divides our board of directors into three
classes with staggered three-year terms. In addition, with a staggered board,
directors may be removed only for cause by the affirmative vote of the holders
of a majority of our shares of capital stock entitled to vote. Under our
certificate of incorporation, any vacancy on our board of directors, including a
vacancy resulting from an enlargement of our board of directors, may only be
filled by vote of a majority of our directors then in office. The classification
of our board of directors and the limitations on the removal of directors and
filling of vacancies could make it more difficult for a third party to acquire,
or discourage a third party from acquiring, control of us. See "Management."

85
<PAGE> 87

Our certificate of incorporation also provides that any action required or
permitted to be taken by our stockholders at an annual meeting or special
meeting of stockholders may only be taken if it is properly brought before such
meeting and may not be taken by written action in lieu of a meeting. Our
certificate of incorporation further provides that special meetings of the
stockholders may only be called by our chairman of the board, president or board
of directors. Under our by-laws, in order for any matter to be considered
"properly brought" before a meeting, a stockholder must comply with advance
notice requirements. These provisions could have the effect of delaying until
the next stockholders' meeting stockholder actions which are favored by the
holders of a majority of our outstanding voting securities. These provisions may
also discourage a third party from making a tender offer for our common stock,
because even if it acquired a majority of our outstanding voting securities, the
third party would be able to take action as a stockholder (such as electing new
directors or approving a merger) only at a duly called stockholders' meeting,
and not by written consent.

The General Corporation Law of Delaware provides generally that the
affirmative vote of a majority of the shares entitled to vote on any matter is
required to amend a corporation's certificate of incorporation or by-laws,
unless a corporation's certificate of incorporation or by-laws, as the case may
be, requires a greater percentage. Our certificate of incorporation and by-laws
require the affirmative vote of the holders of at least 75% of the shares of our
capital stock issued and outstanding and entitled to vote to amend or repeal any
of the provisions described in the prior two paragraphs.

Our certificate of incorporation contains certain provisions permitted
under the General Corporation Law of Delaware relating to the liability of
directors. The provisions eliminate a director's liability for monetary damages
for a breach of fiduciary duty, except in certain circumstances involving
wrongful acts, such as the breach of a director's duty of loyalty or acts or
omissions that involve intentional misconduct or a knowing violation of law.
Further, our certificate of incorporation contains provisions to indemnify our
directors and officers to the fullest extent permitted by the General
Corporation Law of Delaware. We believe that these provisions will assist us in
attracting and retaining qualified individuals to serve as directors.

REGISTRATION RIGHTS

After this offering, the holders of approximately 10,077,002 shares of
common stock and rights to acquire common stock will be entitled to rights with
respect to the registration of those shares under the Securities Act. Under
terms of our original limited liability company operating agreement, if we
propose to register any of our securities under the Securities Act, those
holders are entitled to notice of and to include shares of common stock in the
registration. The managing underwriter of any underwritten public offering
would, however, have the right, for marketing reasons, to cut-back the number of
shares that the stockholders could include in such registration.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company.

86
<PAGE> 88

SHARES ELIGIBLE FOR FUTURE SALE

Before this offering, there has been no public market for our securities.
After we complete this offering, based upon the number of shares outstanding at
September 30, 1999, there will be 14,609,212 shares of our common stock
outstanding, assuming no exercise of outstanding options to purchase common
stock. Of these outstanding shares, the 4,372,000 shares sold in this offering
will be freely tradeable without restriction or further registration under the
Securities Act of 1933, except that any shares purchased by our "affiliates," as
that term is defined in Rule 144 under the Securities Act, may generally only be
sold in compliance with the limitations of Rule 144 described below.

SALES OF RESTRICTED SHARES

The remaining 10,237,212 shares of common stock outstanding after this
offering are deemed "restricted securities" under Rule 144. Of these securities:

- 27,356 shares may be sold 90 days after the effective date of this
offering; and

- 9,697,187 additional shares may be sold upon expiration of the 180-day
lock-up agreements described below.

Our officers, directors and stockholders holding an aggregate of 10,111,850
shares of common stock have signed lock-up agreements in favor of the
underwriters. As a result, these individuals are generally not permitted to
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any shares of common stock, for a period of 180 days after the date
of this prospectus, without the prior written consent of Deutsche Bank
Securities Inc. Deutsche Bank Securities Inc. currently has no plans to release
any portion of the securities subject to lock-up agreements, but may do so
without notice. When determining whether or not to release shares from the
lock-up agreements, Deutsche Bank Securities Inc. will consider, among other
factors, the number of shares proposed to be sold, the stockholder's reasons for
requesting the release and market conditions at the time.

In general, under Rule 144 a stockholder, including one of our affiliates,
who has beneficially owned his or her restricted securities for at least one
year is entitled to sell, within any three-month period commencing 90 days after
the date of this prospectus, a number of shares that does not exceed the greater
of 1% of the then outstanding shares of our common stock (approximately 146,092
shares immediately after this offering) or the average weekly trading volume in
our common stock during the four calendar weeks preceding the date on which
notice of such sale was filed under Rule 144, provided certain requirements
concerning availability of public information, manner of sale and notice of sale
are satisfied. In addition, a stockholder that is not one of our affiliates at
any time during the three months preceding a sale and who has beneficially owned
the shares proposed to be sold for at least two years is entitled to sell the
shares immediately under Rule 144(k) without compliance with the above described
requirements under Rule 144.

87
<PAGE> 89

Securities issued in reliance on Rule 701 (such as shares of our common
stock acquired pursuant to the exercise of certain options granted under our
stock plans) are also restricted securities and, beginning 90 days after the
date of this prospectus, may be sold by stockholders other than our affiliates
subject only to the manner of sale provisions of Rule 144 and by affiliates
under Rule 144 without compliance with its one-year holding period requirement.

STOCK OPTIONS

We intend to file registration statements on Form S-8 under the Securities
Act to register an aggregate of 1,523,808 shares of common stock issuable under
the 1998 plan, the 1999 plan and the purchase plan. Shares issued upon the
exercise of stock options after the effective date of the Form S-8 registration
statements will be eligible for resale in the public market without restriction,
subject to Rule 144 limitations applicable to affiliates and the lock-up
agreements noted above, if applicable.

EFFECT OF SALES OF SHARES

Prior to this offering, there has been no public market for our common
stock, and no prediction can be made as to the effect, if any, that market sales
of shares of common stock or the availability of shares for sale will have on
the market price of our common stock prevailing from time to time. Nevertheless,
sales of significant numbers of shares of our common stock in the public market
could adversely affect the market price of the common stock and could impair our
future ability to raise capital through an offering of our equity securities.

88
<PAGE> 90

UNDERWRITING

Subject to the terms and conditions of the underwriting agreement, the
underwriters named below, through their representatives Deutsche Bank Securities
Inc., Bear, Stearns & Co. Inc. and CIBC World Markets Corp., have severally
agreed to purchase from us and the selling stockholders the following respective
numbers of shares of common stock at the initial public offering price less the
underwriting discounts and commissions set forth on the cover page of this
prospectus:

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
- ----------- ----------------
<S> <C>
Deutsche Bank Securities Inc............................
Bear, Stearns & Co. Inc.................................
CIBC World Markets Corp.................................
----------
Total.............................................. 4,372,000
==========
</TABLE>

The underwriting agreement provides that the obligations of the
underwriters are subject to specified conditions and that the underwriters will
purchase all of the shares of common stock offered in this offering, other than
those covered by the over-allotment option described below, if any of the shares
are purchased.

We have been advised by the underwriters' representatives that the
underwriters propose to offer the shares of common stock to the public at the
initial public offering price set forth on the cover page of this prospectus and
to dealers at that price less a concession not in excess of $ per share. The
underwriters may allow, and the dealers may reallow, a concession not in excess
of $ per share to other dealers. After the initial public offering, the
underwriters' representatives may change this offering price and other selling
terms. The expenses of this offering, all of which are payable by us, are
estimated to be $1,325,000. The following table sets forth the discounts and
commissions to be allowed to the underwriters:

<TABLE>
<CAPTION>
PAID BY US
------------------------------------------
NO OPTION EXERCISE FULL OPTION EXERCISE
------------------ --------------------
<S> <C> <C>
Per share................................. $ $
Total..................................... $ $
</TABLE>

<TABLE>
<CAPTION>
PAID BY SELLING STOCKHOLDERS
------------------------------------------
NO OPTION EXERCISE FULL OPTION EXERCISE
------------------ --------------------
<S> <C> <C>
Per share................................. $ $
Total..................................... $ $
</TABLE>

We and the selling stockholders have granted to the underwriters an option,
exercisable not later than 30 days after the date of this prospectus, to
purchase up to 515,884 and 139,916 additional shares of common stock,
respectively, at the initial public offering price less the underwriting
discounts and commissions set forth on the cover page of this prospectus. If the
underwriters exercise the option, each of the underwriters will have a firm
commitment to purchase approximately the same percentage of the option shares
that the number of shares of common stock to be purchased by it in the above
table bears to 4,372,000, and we and the selling stockholders will be obligated
to sell these shares to the underwriters. The underwriters may exercise the
option only to cover over-allotments made in connection with the sale of the
common stock offered in this offering. If

89
<PAGE> 91

purchased, the underwriters will offer the additional shares on the same terms
as those on which the 4,372,000 shares are being offered.

At our request, the underwriters have reserved up to 178,700 shares of
common stock for sale, at the initial public offering price, to employees and
friends of ours through a directed share program. The number of shares of common
stock available for sale to the general public in the public offering will be
reduced to the extent that employees and friends purchase the reserved shares.

The underwriting agreement contains covenants of indemnity among the
underwriters, the selling stockholders and us against certain liabilities,
including certain liabilities under the Securities Act of 1933. Alternatively,
the underwriting agreement also provides that we or the selling stockholders
contribute to payments the underwriters may be required to make in respect of
such liabilities.

We have agreed, subject to certain exceptions, without the prior written
consent of Deutsche Bank Securities Inc. for a period of 180 days after the date
of this prospectus, not to directly or indirectly:

- offer, sell short or otherwise dispose of any shares of our common stock
or other securities convertible into or exchangeable or exercisable for
shares of our common stock or derivatives of our common stock or

- enter into any agreement that transfers to another, in whole or in part,
any of the economic consequences of the ownership of the common stock.

Our officers, directors and principal stockholders, who hold or will hold
in the aggregate 10,136,731 shares of our common stock have agreed, subject to
certain exceptions, without the prior written consent of Deutsche Bank
Securities Inc. for a period of 180 days after the date of this prospectus, not
to directly or indirectly:

- offer, sell, pledge, contract to sell, including any short sale, grant
any option to purchase or otherwise dispose of any shares of our common
stock or other securities convertible into or exchangeable or exercisable
for shares of our common stock, other than shares of common stock being
sold in this offering or

- enter into any agreement or transaction that transfers to another, in
whole or in part, any of the economic consequences of the ownership of
the common stock, other than shares of common stock being sold in this
offering.

If any of our officers, directors or principal stockholders request that
Deutsche Bank Securities Inc. consent to a transfer within 180 days after the
date of this prospectus, then Deutsche Bank Securities Inc. may consider the
following factors in determining whether to consent to the proposed transfer:

- the number of shares proposed to be sold;

- the reason for the sale;

- the proximity in time to this offering; and

- the trading volume of our stock at the time of the requested transfer.

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<PAGE> 92

The decision to consent to a proposed transfer during the 180 days following the
date of this prospectus is within the sole discretion of Deutsche Bank
Securities Inc.

The underwriters' representatives have advised us and the selling
stockholders that the underwriters do not intend to confirm sales to any account
over which they exercise discretionary authority.

In order to facilitate this offering, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the market price of
our common stock. These transactions may be effected on the Nasdaq Stock
Market's National Market or otherwise and, if commenced, may be discontinued at
any time. Specifically, the underwriters may over-allot shares of our common
stock in connection with this offering, thereby creating a short position in the
underwriters' syndicate account. A short position results when an underwriter
sells more shares of common stock than the underwriter is committed to purchase.
Additionally, to cover over-allotments or to stabilize the market price of our
common stock, the underwriters may bid for, and purchase, shares of our common
stock in the open market. Any of these activities may maintain the market price
of our common stock at a level above that which might otherwise prevail in the
open market. The underwriters are not required to engage in these activities,
and, if commenced, the activities may be discontinued at any time. The
underwriters' representatives, on behalf of the underwriters, also may reclaim
selling concessions allowed to an underwriter or dealer, if the syndicate
repurchases shares distributed by that underwriter or dealer.

The underwriters and their respective affiliates may be lenders to, engage
in transactions with, and perform services for us in the ordinary course of
business.

Prior to this offering, there has been no public market for our common
stock. Consequently, the initial public offering price for our common stock will
be determined by negotiations among us, representatives of the selling
stockholders and the underwriters' representatives. Among the factors to be
considered in the negotiations will be prevailing market conditions, our results
of operations in recent periods, the market capitalizations and stages of
development of other companies that we and the underwriters' representatives
believe to be comparable to us, estimates of our business potential, the present
stage of our development and other factors deemed relevant.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed
upon for us by Hale and Dorr LLP, Boston, Massachusetts, and for the
underwriters by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston,
Massachusetts.

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<PAGE> 93

EXPERTS

The audited financial statements included in this prospectus have been
audited by various independent accountants. The companies and periods covered by
these audits are indicated in the individual accountants' reports. Such
financial statements have been so included in reliance on the reports of the
various independent accountants given on the authority of such firms as experts
in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form S-1 with the Securities and
Exchange Commission for the stock being offered by this prospectus. This
prospectus does not include all of the information contained in the registration
statement. You should refer to the registration statement and its exhibits for
additional information. Whenever we make reference in this prospectus to any of
our contracts, agreements or other documents, the references are not necessarily
complete and you should refer to the exhibits attached to the registration
statement for copies of the actual contract, agreement or other document. When
we complete this offering, we will also be required to file annual, quarterly
and special reports, proxy statements and other information with the SEC.

You can read our SEC filings, including the registration statement, over
the Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC's following locations:

- Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549;

- New York Regional Office, Seven World Trade Center, Suite 1300, New York,
New York 10048; and

- Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511.

You may also obtain copies of the documents at prescribed rates by writing
to the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference facilities.

92
<PAGE> 94

CAMINUS CORPORATION AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
<S> <C>
CAMINUS CORPORATION AND SUBSIDIARIES
Report of Independent Accountants........................... F-2
Consolidated Balance Sheets as of December 31, 1998 and
September 30, 1999 (unaudited)......................... F-3
Consolidated Statements of Operations for the Period
From Inception (April 29, 1998) Through December 31,
1998, the period from inception through September 30,
1998 (unaudited) and for the Nine Months Ended
September 30, 1999 (unaudited)......................... F-4
Consolidated Statements of Changes in Stockholders'
Equity for the Period From Inception (April 29, 1998)
Through December 31, 1998 and for the Nine Months Ended
September 30, 1999 (unaudited)......................... F-5
Consolidated Statements of Cash Flows for the Period
From Inception (April 29, 1998) Through December 31,
1998, the period from inception through September 30,
1998 (unaudited) and for the Nine Months Ended
September 30, 1999 (unaudited)......................... F-6
Notes to Consolidated Financial Statements.............. F-7
Schedule II -- Valuation and Qualifying Accounts........ F-30
ZAI*NET SOFTWARE, INC. (Predecessor)
Report of Independent Accountants....................... F-31
Balance Sheets as of December 31, 1996, December 31,
1997 and April 30, 1998................................ F-32
Statements of Operations and Retained Earnings for the
Years Ended December 31, 1996 and 1997 and for the Four
Months Ended April 30, 1998............................ F-33
Statements of Cash Flows for the Years Ended December
31, 1996 and 1997 and for the Four Months Ended April
30, 1998............................................... F-34
Notes to the Financial Statements....................... F-35
Supplementary Financial Statement Schedules have been
omitted because the information required to be set
forth therein is either not applicable or is shown in
the financial statements or notes thereto.
CAMINUS LIMITED (formerly Caminus Energy Limited)
Report of Independent Auditors.......................... F-41
Profit and Loss Accounts for the Years Ended April 30,
1997 and 1998.......................................... F-42
Balance Sheets as at April 30, 1997 and 1998............ F-43
Cash Flow Statements for the Years Ended April 30, 1997
and 1998............................................... F-44
Notes to the Financial Statements....................... F-45
DC SYSTEMS, INC. AND SUBSIDIARY
Report of Independent Accountants....................... F-52
Consolidated Balance Sheets as of December 31, 1997,
December 31, 1998 and June 30, 1999 (unaudited)........ F-53
Consolidated Statements of Operations for the Years
Ended December 31, 1997 and 1998 and for the Six Months
Ended June 30, 1998 and 1999 (unaudited)............... F-54
Consolidated Statements of Changes in Shareholder's
Deficit for the Years Ended December 31, 1997 and 1998
and for the Six Months Ended June 30, 1999
(unaudited)............................................ F-55
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1997 and 1998 and for the Six Months
Ended June 30, 1998 and 1999 (unaudited)............... F-56
Notes to Consolidated Financial Statements.............. F-57
PRO FORMA STATEMENTS OF OPERATIONS (unaudited)
Summary of Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the Year Ended December 31,
1998 and the Nine Months September 30, 1999............ F-66
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the Year Ended December 31, 1998........ F-67
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the Nine Months Ended September 30,
1999................................................... F-68
Notes to Unaudited Pro Forma Condensed Consolidated
Statements of Operations............................... F-69
</TABLE>

F-1
<PAGE> 95

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of Caminus Corporation

The recapitalization described in Note 1 to the financial statements has
not been consummated at December 28, 1999. When it has been consummated, we will
be in a position to furnish the following report:

In our opinion, the consolidated financial statements listed in the
accompanying index on page F-1 present fairly, in all material respects, the
financial position of Caminus Corporation and its subsidiaries (the "Company")
at December 31, 1998, and the results of their operations and their cash flows
for the period from inception (April 29, 1998) through December 31, 1998, in
conformity with generally accepted accounting principles. In addition, in our
opinion, the accompanying financial statement schedule presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audit. We
conducted our audit of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP

New York, New York
May 28, 1999, except
as to the fourth and fifth
paragraphs of Note 1 which
are as of November 12, 1999

F-2
<PAGE> 96

CAMINUS CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................ $ 2,770,538 $ 801,351
Accounts receivable, net......................... 3,244,018 5,630,856
Deferred taxes................................... -- 427,752
Prepaid expenses and other current assets........ 306,774 1,270,713
------------ ------------
Total current assets.......................... 6,321,330 8,130,672
Fixed assets, net.................................. 780,076 1,379,873
Developed technology, net.......................... 2,307,361 3,380,497
Other intangibles, net............................. 1,789,859 4,280,104
Goodwill, net...................................... 19,863,548 23,679,123
Other assets....................................... 6,828 18,362
------------ ------------
Total assets.................................. $ 31,069,002 $ 40,868,631
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................. $ 1,615,547 $ 596,802
Accrued liabilities.............................. 1,029,139 4,489,058
Borrowings under credit facility................. -- 1,000,000
Taxes payable.................................... -- 149,148
Payable to related parties....................... 6,187,500 3,971,500
Deferred revenue................................. 2,139,534 2,611,850
------------ ------------
Total current liabilities..................... 10,971,720 12,818,358
Borrowings under credit facility................... -- 1,000,000
Payable to related parties......................... 2,937,500 --
------------ ------------
Total liabilities............................. 13,909,220 13,818,358
Commitments and contingencies...................... -- --
Stockholders' equity: (Note 1)
Common stock, $0.01 par, 50,000,000 shares
authorized, 9,729,229 shares issued and 7,966,928
shares outstanding at December 31, 1998;
11,000,389 shares and 9,238,088 shares
outstanding at September 30, 1999 (unaudited).... 97,292 110,004
Additional paid-in capital......................... 37,070,721 51,655,763
Treasury stock, 1,762,301 shares in treasury at
December 31, 1998 and September 30, 1999
(unaudited), at cost............................. (4,911,205) (4,911,205)
Subscriptions receivable........................... (4,739,493) (2,907,065)
Unearned compensation.............................. -- (287,086)
Accumulated deficit................................ (10,371,188) (16,613,938)
Cumulative translation adjustment.................. 13,655 3,800
------------ ------------
Total stockholders' equity.................... 17,159,782 27,050,273
------------ ------------
Total liabilities and stockholders' equity.... $ 31,069,002 $ 40,868,631
============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE> 97

CAMINUS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD FROM INCEPTION PERIOD FROM INCEPTION
(APRIL 29, 1998) THROUGH (APRIL 29, 1998) THROUGH NINE MONTHS ENDED
DECEMBER 31, 1998 SEPTEMBER 30, 1998 SEPTEMBER 30, 1999
------------------------ ------------------------ ------------------
(UNAUDITED)
<S> <C> <C> <C>
Revenues:
Licenses......................... $ 3,639,143 $ 1,925,858 $ 8,088,621
Software services................ 3,090,758 1,881,417 5,679,513
Strategic consulting............. 2,896,102 1,720,550 4,757,425
------------ ----------- -----------
Total revenues................. 9,626,003 5,527,825 18,525,559
------------ ----------- -----------
Cost of revenues:
Cost of licenses................. 194,968 87,639 682,872
Cost of software services........ 2,278,433 1,221,809 3,244,616
Cost of strategic consulting..... 2,211,617 1,363,142 1,924,955
------------ ----------- -----------
Total cost of revenues......... 4,685,018 2,672,590 5,852,443
------------ ----------- -----------
Gross profit................. 4,940,985 2,855,235 12,673,116
------------ ----------- -----------
Operating expenses:
Sales and marketing.............. 470,549 262,815 2,523,012
Research and development......... 1,153,470 638,399 2,679,726
General and administrative....... 3,130,567 1,676,077 6,177,228
Acquired in-process research and
development.................... 4,822,000 3,053,000 1,000,000
Amortization of intangible
assets......................... 5,497,765 1,714,711 6,074,750
------------ ----------- -----------
Total operating expenses....... 15,074,351 7,345,002 18,454,716
------------ ----------- -----------
Loss from operations............... (10,133,366) (4,489,767) (5,781,600)
Other income and (expense):
Interest income.................... 96,909 56,535 46,434
Interest expense................. -- -- (165,006)
Other expense, net............... -- -- (8,284)
------------ ----------- -----------
Total other income (expense)... 96,909 56,535 (126,856)
------------ ----------- -----------
Loss before provision for income
taxes............................ (10,036,457) (4,433,232) (5,908,456)
Provision for income taxes......... 35,735 57,288 334,294
------------ ----------- -----------
Net loss before minority
interest......................... (10,072,192) (4,490,520) (6,242,750)
Minority interest.................. (298,996) (189,920) --
Net loss........................... $(10,371,188) $(4,680,440) $(6,242,750)
============ =========== ===========
Basic and diluted net loss per
share............................ $ (1.41) $ (0.65) $ (0.76)
============ =========== ===========
Weighted average shares used in
computing net loss per share..... 7,360,634 7,215,030 8,264,075
Pro forma (unaudited):
Loss before provision for income
taxes.......................... $(10,036,457) $(4,433,232) $(5,908,456)
Pro forma income tax provision
(benefit)...................... (176,224) 446,290 472,309
Minority interest................ (298,996) (189,920) --
------------ ----------- -----------
Pro forma net loss............... $(10,159,229) $(5,069,442) $(6,380,765)
============ =========== ===========
Pro forma basic and diluted net
loss per share................. $ (1.38) $ (0.70) $ (0.77)
============ =========== ===========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE> 98

CAMINUS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
ADDITIONAL
NUMBER OF COMMON PAID-IN TREASURY SUBSCRIPTIONS UNEARNED
SHARES STOCK CAPITAL STOCK RECEIVABLE COMPENSATION
---------- -------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at April 29, 1998
(inception)......................... $ -- $ -- $ -- $ -- $ --
Issuance of shares................... 6,712,764 67,128 20,122,002

Issuance of shares in connection with
the acquisition of Caminus Energy
Limited............................. 961,255 9,612 2,990,388

Issuance of shares in connection with
the acquisition of Zai*Net Software
L.P................................. 2,055,210 20,552 10,318,798

Stock subscriptions receivable....... (4,739,493)

Issuance of stock options in
connection with acquisitions........ 3,144,995

Purchase of treasury stock at cost... (1,762,301) 494,538 (4,911,205)

Net loss.............................

Translation adjustment...............
---------- -------- ----------- ----------- ----------- ---------
Balance at December 31, 1998......... 7,966,928 97,292 37,070,721 (4,911,205) (4,739,493) --
---------- -------- ----------- ----------- ----------- ---------

Comprehensive loss for the period
from inception through December 31,
1998................................
Receipt of membership subscription
receivable (unaudited).............. 1,832,428

Issuance of additional shares
(unaudited)......................... 1,028,667 10,287 12,328,651

Issuance of shares in connection with
the acquisition of DC Systems
(unaudited)......................... 242,493 2,425 2,997,575

Reacquisition of stock option
(unaudited)......................... (250,000)

Distribution to stockholders
(unaudited)......................... (890,000)

Issuance of stock options below fair
market value (unaudited)............ 398,816 (398,816)

Amortization of unearned compensation
(unaudited)......................... 111,730

Net loss (unaudited).................

Translation adjustment (unaudited)...
---------- -------- ----------- ----------- ----------- ---------
Balance at September 30, 1999
(unaudited)......................... 9,238,088 $110,004 $51,655,763 $(4,911,205) $(2,907,065) $(287,086)
========== ======== =========== =========== =========== =========

Comprehensive loss for the nine
months ended September 30, 1999
(unaudited).........................

<CAPTION>
CUMULATIVE TOTAL CUMULATIVE
ACCUMULATED TRANSLATION STOCKHOLDERS' COMPREHENSIVE COMPREHENSIVE
DEFICIT ADJUSTMENT EQUITY LOSS LOSS
------------ ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at April 29, 1998
(inception)......................... $ -- $ -- $ --
Issuance of shares................... 20,189,130
Issuance of shares in connection with
the acquisition of Caminus Energy
Limited............................. 3,000,000
Issuance of shares in connection with
the acquisition of Zai*Net Software
L.P................................. 10,339,350
Stock subscriptions receivable....... (4,739,493)
Issuance of stock options in
connection with acquisitions........ 3,144,995
Purchase of treasury stock at cost... (4,416,667)
Net loss............................. (10,371,188) (10,371,188) $(10,371,188)
Translation adjustment............... 13,655 13,655 13,655
------------ ------- ------------ ------------
Balance at December 31, 1998......... (10,371,188) 13,655 17,159,782 $(10,357,533)
------------ ------- ------------ ============
(10,357,533)
------------
Comprehensive loss for the period
from inception through December 31,
1998................................
Receipt of membership subscription
receivable (unaudited).............. 1,832,428
Issuance of additional shares
(unaudited)......................... 12,338,938
Issuance of shares in connection with
the acquisition of DC Systems
(unaudited)......................... 3,000,000
Reacquisition of stock option
(unaudited)......................... (250,000)
Distribution to stockholders
(unaudited)......................... (890,000)
Issuance of stock options below fair
market value (unaudited)............ --
Amortization of unearned compensation
(unaudited)......................... 111,730
Net loss (unaudited)................. (6,242,750) -- (6,242,750) (6,242,750)
Translation adjustment (unaudited)... (9,855) (9,855) (9,855)
------------ ------- ------------ ------------
Balance at September 30, 1999
(unaudited)......................... $(16,613,938) $ 3,800 $ 27,050,273 $(16,610,138)
============ ======= ============ ============
Comprehensive loss for the nine
months ended September 30, 1999
(unaudited)......................... $ (6,252,605)
============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE> 99

CAMINUS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
INCEPTION INCEPTION
(APRIL 29, 1998) (APRIL 29, 1998) NINE MONTHS
THROUGH THROUGH ENDED
DECEMBER 31, 1998 SEPTEMBER 30, 1998 SEPTEMBER 30, 1999
----------------- ------------------ ------------------
(UNAUDITED)
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss......................................... $(10,371,188) $ (4,680,440) $ (6,242,750)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization................ 5,666,521 1,819,118 6,399,617
Acquired in-process research and
development................................ 4,822,000 3,053,000 1,000,000
Deferred taxes............................... -- -- (3,808)
Non-cash compensation expense................ -- -- 111,730
Minority interest............................ 298,996 189,920 --
Changes in operating assets and liabilities:
Accounts receivable.......................... (849,920) (15,680) (2,201,199)
Prepaid expenses and other current assets.... (97,456) (265,066) 153,925
Accounts payable............................. 183,433 (957,492) (1,121,093)
Accrued liabilities.......................... 635,030 297,615 2,958,789
Taxes payable................................ -- -- 148,139
Deferred revenue............................. 704,450 1,008,908 (2,092,335)
Other........................................ (40,190) 6,498 (43,528)
------------ ------------ ------------
Net cash provided by (used in) operating
activities..................................... 951,676 456,381 (932,513)
------------ ------------ ------------
Cash flows from investing activities:
Purchases of fixed assets...................... (500,597) (271,690) (799,862)
Acquisition of Caminus Energy Limited, net of
cash acquired................................ (2,502,567) (2,502,567) --
Acquisition of Zai*Net Software L.P., net of
cash acquired................................ (7,242,258) (7,242,258) --
Acquisition of Positron........................ (151,667) -- --
Acquisition of DC Systems, Inc., net of cash
acquired..................................... -- -- (9,919,192)
Other acquisition costs........................ (495,817) (247,909) --
------------ ------------ ------------
Net cash used in investing activities............ (10,892,906) (10,264,424) (10,719,054)
------------ ------------ ------------
Cash flows from financing activities:
Payments of obligation to affiliate............ (250,000) -- (4,000,000)
Payments of obligation to stockholders......... -- -- (2,187,500)
Proceeds from borrowings under credit
facility..................................... -- -- 2,000,000
Payments of distribution to stockholders....... -- -- (290,000)
Cash received for subscription receivable...... -- -- 1,832,428
Issuance of common stock....................... 12,949,637 12,874,999 12,338,938
------------ ------------ ------------
Net cash provided by financing activities........ 12,699,637 12,874,999 9,693,866
------------ ------------ ------------
Effect of exchange rates on cash flows........... 12,131 (80,982) (11,486)
------------ ------------ ------------
Net increase (decrease) in cash and cash
equivalents.................................... 2,770,538 2,985,974 (1,969,187)
Cash and cash equivalents, beginning of period... -- -- 2,770,538
------------ ------------ ------------
Cash and cash equivalents, end of period......... $ 2,770,538 2,985,974 $ 801,351
============ ============ ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE> 100

CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION

FORMATION OF THE BUSINESS

Caminus Corporation (formerly Caminus LLC) ("Caminus" or the "Company") is
a Delaware corporation which was originally organized as a limited liability
company on April 29, 1998 ("Inception") by an investor group. Caminus was formed
for the purpose of acquiring equity interests in and managing the business
affairs of Caminus Energy Limited ("CEL") and Zai*Net Software, L.P. ("Zai*Net"
or "ZNLP"), and to provide industry expertise and risk management software
products in the evolving competitive gas and energy markets worldwide.

In conjunction with the formation of the Company and as consideration for
the identification of the acquired entities, an option, with an anti-dilution
provision, to acquire a 10% interest in the Company was granted to a member of
the investor group. This option has been valued at $1.6 million using the
Black-Scholes option pricing model and has been accounted for as part of the
purchase price of ZNLP and CEL. Any additional grants made under the
anti-dilution provision are required to be made at the current market price. The
option expires ten years from the date of the formation of the Company. In
connection with the initial public offering ("IPO") this option will be
exercised.

On May 12, 1998, Caminus acquired a 71% ownership interest in ZNLP and a
100% ownership interest in CEL; on December 31, 1998, Caminus acquired the
remaining 29% ownership interest in ZNLP. The value assigned to these shares was
consistent with the value per share established immediately prior to these
acquisitions based on cash capital contributions from founders upon formation of
the Company. (For more complete disclosure, see Note 3 -- Acquisitions).

PLANNED RECAPITALIZATION

In September 1999, the Board of Directors of Caminus authorized the filing
of a registration statement with the Securities and Exchange Commission that
would permit the Company to sell shares of the Company's common stock in
connection with the proposed IPO. These financial statements reflect the
recapitalization of Caminus LLC as a corporation immediately prior to the IPO,
and the conversion of each membership interest in the limited liability company
into .095238 of one share of common stock of the corporation. This transaction
affects the legal form only of the entities under common control, and the
proportionate ownership interests of the members pre- and post-merger are
preserved.

In connection with the planned IPO of the Company, Caminus Corporation will
no longer be treated as a limited liability company for tax purposes.
Accordingly, the consolidated statements of operations include net income for
all periods assuming the Company was taxable as a C Corporation and earnings
based on net income divided by the weighted average number of shares
outstanding.

F-7
<PAGE> 101
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
Caminus Corporation and its subsidiaries. All intercompany transactions and
balances have been eliminated.

REVENUE RECOGNITION

The Company generates revenue from several sources, including the licensing
of its software products, performing services related to the implementation,
training and support of these products, and through providing strategic
consulting services to clients in the areas where the Company has subject matter
expertise. The Company follows the provisions of Statements of Position ("SOP")
97-2 "Software Revenue Recognition", SOP 98-4 "Deferral of the Effective Date of
Certain Provisions of SOP 97-2, and SOP 98-9, "Modification of SOP 97-2,
Software Revenue Recognition, With Respect to Certain Transactions".

License revenue is recognized upon the execution of a license agreement,
when the licensed product has been delivered, fees are fixed and determinable,
collectibility is probable and when all other significant obligations have been
fulfilled. For license agreements in which customer acceptance is a condition to
earning the license fees, revenue is not recognized until acceptance occurs. For
arrangements containing multiple elements, such as software license fees,
consulting services and maintenance, and where vendor-specific objective
evidence ("VSOE") of fair value exists for all undelivered elements, the Company
accounts for the delivered elements in accordance with the "residual method"
prescribed by SOP 98-9. The adoption of SOP 98-9 did not have a material impact
on the consolidated financial position, results of operations or cash flows of
the Company. For arrangements containing multiple elements where VSOE does not
exist, all revenue is deferred until all elements of the arrangement have been
delivered.

The Company also provides software to customers under long-term development
arrangements that can require significant modification to adapt the software to
the unique specifications of the customer. If the service elements are
considered essential to the functionality of the software products, both the
software product revenue and service revenue are recognized using the completed
contract method as prescribed in accordance with the provisions of SOP 81-1,
"Accounting for Performance of Construction Type and Certain Production Type
Contracts." Accordingly, license and software enhancement revenue is recognized
under the completed contract method when all development, testing and
installation is completed and the purchaser formally accepts the software. Costs
associated with these contracts are deferred until contract completion. Deferred
costs are classified in "Prepaid expenses and other current assets" on the
consolidated balance sheet. Costs of software enhancements include the direct
labor component of programmer and consultant cost to perform the software
enhancement or service as well as the prorated share of technical support and
overhead costs associated with

F-8
<PAGE> 102
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the enhancement and services. Anticipated losses, if any, on uncompleted
contracts are recognized in the period in which such losses are determined.

Software Services revenue includes consulting fees for installation, data
conversion, training and product support services related to the use of the
Company's licensed products. Customers often enter into arrangements for these
services concurrent with execution of license agreements. The services do not
require significant modification of the licensed products, are not essential to
their functionality and are available from other vendors. Payment obligations
with respect to the licensed products are not dependent upon the performance of
these services. Accordingly, the Company recognizes revenues for these services
as they are performed. Maintenance and support revenues associated with new
product licenses and renewals, where VSOE of fair value exists, are deferred and
recognized ratably over the contract period. Contracts provide for an initial
maintenance period, which is annual, and a renewal period after expiration of
the initial maintenance period. Customers are permitted, but not required, to
renew their maintenance with us after expiration of the initial annual period.
The renewal rate for maintenance services is based on the initial license fee
and is used to establish VSOE for maintenance revenues.

Strategic consulting revenue is recognized as such services are performed.

FOREIGN CURRENCY TRANSLATION

The Company's foreign subsidiaries maintain their accounting records in the
local currency, which is their functional currency. The assets and liabilities
are translated into U.S. dollars based on exchange rates at the end of the
respective reporting periods and the effect of the foreign currency translation
is reflected as a component of members' equity. Income and expense items are
translated at an average exchange rate during the period. Transaction gains and
losses are included in the determination of the results from operations.

SOFTWARE DEVELOPMENT COSTS

Capitalization of software development costs begins upon establishment of
technological feasibility of the product. After technological feasibility is
established, material software development costs are capitalized. The
capitalized cost is then amortized on a straight-line basis over the estimated
product life, or on the ratio of current revenues to total projected product
revenues, whichever is greater. To date, the period between achieving
technological feasibility, which the Company has defined as establishment of a
working model which typically occurs when beta testing commences, and the
general release of such software has been short, and software development costs
qualifying for capitalization have been insignificant. Accordingly, the Company
has not capitalized any software development costs to date.

F-9
<PAGE> 103
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CASH AND CASH EQUIVALENTS

Cash equivalents consist of short-term, highly liquid investments with
original maturities of three months or less.

ACCOUNTS RECEIVABLE

The Company periodically reviews accounts receivable for collectibility and
provides for an allowance for doubtful accounts to the extent that amounts are
not expected to be collected. The allowance for doubtful accounts was
approximately $229,000 and $304,000 at December 31, 1998 and September 30, 1999
(unaudited), respectively.

FIXED ASSETS

Fixed assets are recorded at cost. Depreciation is calculated using the
straight-line method over the estimated useful life of the related asset, which
generally ranges from three to seven years. Leasehold improvements are amortized
using the straight-line method over the lesser of the remaining lease term or
the estimated useful lives of the related assets.

GOODWILL, DEVELOPED TECHNOLOGY AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets are amortized on a straight-line basis
over the estimated future periods to be benefited ranging from three to five
years. Developed technology is amortized on a straight-line basis over the
estimated product life, generally three years, or on the ratio of current
revenues to total projected product revenues, whichever is greater.

Goodwill and other intangible assets are reviewed for impairment quarterly
or whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability of assets to be held and used
is measured by a comparison of the carrying amount of the assets to future
undiscounted cash flows of the businesses acquired. If the assets are considered
to be impaired, the impairment to be recognized is measured by the amount by
which the carrying amount of the assets exceeds the fair value of the assets. To
date, no impairment has occurred. This analysis is performed according to the
asset groupings established at the time of the acquisition and at the enterprise
level.

INCOME TAXES

The Company is currently taxed as a partnership for federal and state tax
purposes. There are no entity level income taxes imposed by jurisdictions in
which the Company conducts its business and, therefore, these financial
statements do not reflect any federal or state income tax expense. The profit or
loss is deemed passed through to the stockholders and they are obligated to
report such profit or loss on their own tax returns in the relevant
jurisdictions. Prior to the IPO the

F-10
<PAGE> 104
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company will convert to a C corporation and will be subject to federal and state
income taxes.

The Company has a wholly owned subsidiary located in the United Kingdom. As
such, the entity is liable for taxes to the Inland Revenue. For U.S. purposes,
an election was made to include the foreign income and expenses in the U.S. tax
returns. As a result of this election, the Company will be liable for U.K.
taxes. Foreign tax credits are passed through to the stockholders.

New York City, one of the local jurisdictions in which the Company conducts
its business, imposes an Unincorporated Business Tax at a rate of 4%, on
unincorporated entities, such as the Company. This tax is reduced to the extent
any stockholder is itself subject to New York City income tax. In addition, this
tax is imposed only on the portion of taxable income allocable to New York City
as per certain allocation factors (i.e., receipts, payroll and property).

The tax expense recorded in these financial statements reflects foreign
taxes and the New York City Unincorporated Business Tax on the Company's
allocable portion of the taxable income.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist primarily of cash and cash
equivalents, accounts receivable, accounts payable, accrued liabilities and
borrowings under a credit facility. The current carrying amount of these
instruments approximates fair market value due to the relatively short period of
time to maturity for these instruments.

EARNINGS PER SHARE

The Company computes net income (loss) per share in accordance with the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings per Share" ("SFAS 128") and SEC Staff Accounting Bulletin No. 98 ("SAB
98"). Under the provisions of SFAS 128 and SAB 98, basic and diluted net loss
per share is computed by dividing net loss for the period by the weighted
average number of shares outstanding for the period. The calculation of diluted
net loss per share excludes options to purchase shares as the effect would be
antidilutive.

At December 31, 1998, outstanding options to purchase 604,891 shares, with
exercise prices ranging from $2.31 to $4.62 as well as contingently issuable
options to purchase 1,935,483 shares, with exercise prices ranging from $1.89 to
$6.51 were excluded from the calculation of diluted loss per membership interest
as the effect would have been anti-dilutive.

F-11
<PAGE> 105
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company follows SFAS No. 123, "Accounting for Stock-Based
Compensation," ("SFAS 123"). As permitted by this statement, the Company
continues to apply Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," ("APB 25") to account for its stock-based employee
compensation arrangements.

USE OF ESTIMATES

The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles which require
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133")
which is effective for the Company beginning in 2001. SFAS 133 establishes
accounting and reporting standards for derivative financial instruments and
hedging activities related to those instruments, as well as other hedging
activities. Because the Company does not currently hold any derivative financial
instruments and does not engage in hedging activities, the adoption of SFAS 133
is not expected to have a material impact on the consolidated financial
position, results of operations or cash flows of the Company.

INTERIM INFORMATION (UNAUDITED)

The accompanying unaudited consolidated financial statements as of and for
the period from Inception (April 29, 1998) through September 30, 1998 and for
the nine months ended September 30, 1999 have been prepared by the Company
pursuant to the rules of the Securities and Exchange Commission ("SEC") and, in
the opinion of the Company, include all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of results of
operations, financial position and cash flows. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such SEC rules. The Company believes that the disclosures made are
adequate to keep the information presented from being misleading. The results of
operations and cash flows for the nine months ended September 30, 1999, are not
necessarily indicative of the results to be expected for the full year.

F-12
<PAGE> 106
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. ACQUISITIONS

ZAI*NET SOFTWARE, L.P.

On May 12, 1998, the Company acquired a 71% ownership interest in ZNLP for
$7,740,000 in cash. ZNLP licenses, customizes and services Zai*Net, an
integrated real-time front, middle, and back office software trading system for
foreign exchange, commodities, energy, options and other financial products. The
terms of the purchase agreement required the payment of additional consideration
totaling $4,375,000 to the former shareholder of ZNLP if revenues from ZNLP
products were in excess of certain thresholds as defined in the purchase
agreement. Payment of this additional consideration was guaranteed in connection
with the acquisition of the remaining 29% interest in ZNLP by the Company in
December 1998. The acquisition of the 71% ownership interest was accounted for
using the purchase method of accounting, and accordingly, the results of ZNLP's
operations are included in the Company's consolidated financial statements from
the date of acquisition.

On December 31, 1998, the Company acquired the remaining 29% interest in
ZNLP in exchange for a 21% equity interest in the Company. The acquisition of
the minority interest was accounted for using the purchase method of accounting.
Also as of December 31, 1998, Zai*Net had 4,988,209 options outstanding with an
average strike price of $2.31. These options were valued at their market value
and recorded as additional consideration for the acquisition of ZNLP. In March
1999, in connection with this transaction, ZNLP was merged into the Company. In
addition, the Company agreed that the amounts included as earnout payments in
the original acquisition agreement will be due and payable in various
installments through April 15, 2000.

A summary of the total purchase price for the acquisition of ZNLP is as
follows:

<TABLE>
<S> <C>
Cash..................................................... $ 7,740,000
Issuance of notes payable................................ 4,375,000
Issuance of equity....................................... 10,339,350
Issuance of options (see Note 1)......................... 1,173,071
Issuance of options to ZNLP employees.................... 1,496,463
Other direct acquisition costs........................... 602,969
-----------
$25,726,853
===========
</TABLE>

F-13
<PAGE> 107
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A summary of the allocation of the total purchase price is as follows:

<TABLE>
<S> <C>
Tangible net assets acquired............................. $ 899,191
Acquired in-process research and development............. 4,822,000
Developed technology..................................... 2,596,000
Other identifiable intangible assets..................... 2,023,000
Goodwill................................................. 15,386,662
-----------
$25,726,853
===========
</TABLE>

The fair value assigned to intangible assets acquired was based on an
appraisal of the purchased in-process technology, developed technology, and
other intangible assets. Of the acquired intangible assets, $4,822,000
represents management's estimate of acquired in-process research and development
(IPR&D) that had not yet reached technological feasibility and had no
alternative future use. Accordingly, this amount was immediately expensed in the
consolidated statement of operations upon acquisition. The value assigned to
IPR&D was determined by identifying research projects in areas for which
technological feasibility had not been established. The value was determined by
estimating the costs to develop the IPR&D into commercially viable products,
estimating the resulting net cash flows from such projects, and discounting the
net cash flows back to their present value.

In estimating the net discounted cash flows from such projects, no material
changes from historical pricing, margins and expense levels are anticipated. The
most significant and uncertain assumptions included completion of the products
in process on schedule, expectations about revenue growth and eventual
replacement of these products with new products over a three to four year
period. No residual cash flows of the Company were assumed to relate to IPR&D.
The discount rate of 25-35% included a factor that takes into account the
uncertainty surrounding the successful development of the IPR&D. Additionally,
consideration was given to the stage of completion of each research and
development project at the date of acquisition.

The acquired IPR&D includes the power trading and scheduling, gas trading
and scheduling and the foreign exchange products. The Company estimated that
these products were approximately 87.5%, 75% and 90% complete at the date of
acquisition based on costs incurred through the date of acquisition as compared
to total estimated expenditures over the product's development cycle. The
Company expects to have these products available for general release during 1999
with estimated future development costs totaling approximately $435,000 at the
time of acquisition. The Company has released certain of these products. The
Company intends to offer other products to its customers under general release
once completed.

F-14
<PAGE> 108
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

produced to meet design and performance requirements. The Company currently
expects that the product utilizing the acquired IPR&D will be successful, but
there can be no assurance that commercial viability of any of these products
will be achieved. Further, future developments in the software industry, changes
in the technology, changes in other products and offerings or other developments
may cause the Company to alter, or abandon, its product plans.

Developed technology represents the fair value of applications and
technologies existing at the date of acquisition. Other intangible assets
represent the fair value of other acquired intangible assets including primarily
customer lists and work force in place. Goodwill represents the excess of the
purchase price over the fair value of identifiable tangible and intangible
assets acquired.

CAMINUS ENERGY LIMITED

On May 12, 1998, the Company acquired CEL, a consulting and professional
services organization, which provides services and research to companies in the
energy market sector, for $3,022,924 in cash, plus an equity interest of 10.1%
of the Company valued at $3.0 million. The acquisition was accounted for using
the purchase method of accounting, and accordingly, the results of CEL's
operations are included in the Company's consolidated financial statements from
the date of acquisition.

A summary of the purchase price for the acquisition is as follows:

<TABLE>
<S> <C>
Issuance of equity........................................ $3,000,000
Cash...................................................... 3,022,924
Issuance of options (see Note 1).......................... 475,461
Other direct acquisition costs............................ 100,000
----------
$6,598,385
==========
</TABLE>

A summary of the allocation of the purchase price is as follows:

<TABLE>
<S> <C>
Tangible net assets acquired.............................. $ 380,515
Goodwill.................................................. 6,217,870
----------
$6,598,385
==========
</TABLE>

Goodwill represents the excess of the purchase price over the fair value of
identifiable tangible and intangible assets acquired.

Pursuant to the Agreement, the Company also granted options to purchase
480,952 shares to two officers of CEL (288,571 and 192,381 shares, respectively)
for $3.12 per share (total proceeds to Caminus of approximately $1.5 million).
These options are exercisable only in the event of a sale or public offering,
compliance with a service agreement and achievement of certain internal rates of
return. The number of shares that ultimately vest and become exercisable is

F-15
<PAGE> 109
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

contingent upon all of these conditions. No amounts were recorded for these
options, as the conditions under which they would vest were not met as of
September 30, 1999. However, upon consummation of an IPO, the Company expects to
record a compensation related charge for the exercise of these options of
approximately $6.4 million, based on the estimated mid-point of the IPO filing
range.

POSITRON ENERGY CONSULTING

On November 13, 1998, the Company acquired Positron Energy Consulting
("Positron"). The Company paid $151,667 in cash for certain assets and
liabilities of Positron. The acquisition was accounted for using the purchase
method of accounting and the excess of the purchase price over the net assets
acquired was recorded as goodwill. Also in connection with the acquisition,
restricted shares of common stock of the Company were granted to three
employees/principals of Positron. The restrictions lapse only upon the
resolution of contingencies identified in the purchase agreement.

In November 1999, the Company's managing committee determined that all of
the contingencies identified in the purchase agreement were satisfied.
Accordingly, the restrictions on the shares have been lifted and the three
employees/principals of Positron received 57,486 unrestricted shares. The
Company will record a compensation charge of approximately $0.8 million based on
the estimated mid-point of the IPO filing range.

DC SYSTEMS ("DCS") (UNAUDITED)

On July 31, 1999, Caminus acquired DCS, a provider of software solutions to
the gas industry. The Company paid $10,000,000 in cash, and issued 242,493
shares of Caminus valued at $3,000,000. In connection with this transaction,
Caminus incurred approximately $500,000 of other direct acquisition costs. A
summary of the allocation of the purchase price is as follows:

<TABLE>
<S> <C>
Tangible net assets acquired......................... $ (953,706)
Acquired in-process research and development......... 1,000,000
Developed technology................................. 1,800,000
Other intangible assets.............................. 3,030,000
Goodwill............................................. 8,623,706
-----------
$13,500,000
===========
</TABLE>

F-16
<PAGE> 110
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

research projects in areas for which technological feasibility had not been
established. The value was determined by estimating the costs to develop the
IPR&D into commercially viable products, estimating the resulting net cash flows
from such projects, and discounting the net cash flows back to their present
value.

In estimating the net discounted cash flows from such projects, no material
changes from historical pricing, margins and expense levels are anticipated. The
most significant and uncertain assumptions included completion of the products
in process on schedule, expectations about revenue growth and eventual
replacement of these products with new products over a three to four year
period. No residual cash flows of the Company were assumed to relate to IPR&D.
The discount rate of 25% included a factor that takes into account the
uncertainty surrounding the successful development of the IPR&D. Additionally,
consideration was given to the stage of completion of each research and
development project at the date of acquisition.

The acquired IPR&D includes the Plant*Master and other products. The
Company estimated that these products were approximately 50% complete at the
date of acquisition based on costs incurred through the date of acquisition as
compared to total estimated expenditures over the product's development cycle.
The Company expects to have these products available for release during 1999 and
early 2000 with estimated future development costs totaling approximately
$600,000 at the time of acquisition. The Company intends to offer other products
to its customers under general release once completed.

The nature of the efforts required to develop and integrate the acquired
IPR&D into a commercially viable product, feature or functionality within the
Company's suite of existing products related to the completion of all planning,
design and testing activities that are necessary to establish that the product
can be produced to meet design and performance requirements. The Company
currently expects that the product utilizing the acquired IPR&D will be
successful, but there can be no assurance that commercial viability of any of
these products will be achieved. Further, future developments in the software
industry, changes in the technology, changes in other products and offerings or
other developments may cause the Company to alter, or abandon, its product
plans.

In July 1999, DC Systems declared a dividend to the existing shareholders
to cover the estimated tax liability associated with the sale of DC Systems to
the Company. This dividend amounted to $184,000 and is included in payable to
related parties on the consolidated balance sheet.

The above acquisitions were accounted for using the purchase method. Had
the acquisitions of ZNLP, CEL, Positron and DC Systems occurred on January 1,

F-17
<PAGE> 111
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1998 the unaudited pro forma revenue, net loss and related basic and diluted
loss per share for the year ended December 31, 1998 and the nine months ended
September 30, 1999 would have been: $14.8 million and $18.9 million; $13.3
million and $12.3 million, and $1.76 and $1.46, respectively. These results
which are based on various assumptions, are not necessarily indicative of what
would have occurred had the acquisitions been consummated on January 1, 1998.

4. FIXED ASSETS

Fixed assets consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 SEPTEMBER 30, 1999
----------------- ------------------
(UNAUDITED)
<S> <C> <C>
Computer hardware, software and office
equipment............................ $ 699,574 $1,416,066
Furniture, fixtures and leasehold
improvements........................... 240,678 440,574
Automobiles............................ 8,580 14,185
--------- ----------
948,832 1,870,825
Less -- Accumulated depreciation and
amortization......................... (168,756) (490,952)
--------- ----------
$ 780,076 $1,379,873
========= ==========
</TABLE>

Depreciation expense for the period from Inception through December 31,
1998 and for the nine months ended September 30, 1999 (unaudited) amounted to
$168,756 and $324,867, respectively.

5. INTANGIBLE ASSETS

The intangible assets arising from the acquisition transactions discussed
in Note 3 are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 SEPTEMBER 30, 1999
----------------- ------------------
(UNAUDITED)
<S> <C> <C>
Developed technology................... $ 2,607,457 $ 4,407,457
Goodwill............................... 21,737,898 30,361,604
Other intangible assets................ 2,029,845 5,059,845
----------- -----------
26,375,200 39,828,906
Less -- Accumulated amortization....... (2,414,432) (8,489,182)
----------- -----------
$23,960,768 $31,339,724
=========== ===========
</TABLE>

Amortization expense for developed technology, goodwill and other
intangible assets for the period from Inception through December 31, 1998 and
for the nine

F-18
<PAGE> 112
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

months ended September 30, 1999 (unaudited) were $300,096, $1,874,350 and
$239,986, respectively; and $726,864, $4,808,131 and $539,755, respectively.

6. ACCRUED LIABILITIES

Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------
<S> <C>
Accrued bonuses and commissions............................. $ 515,722
Accrued professional fees................................... 227,778
Accrued management fees..................................... 100,000
Other accrued expenses...................................... 185,639
----------
Total accrued liabilities.............................. $1,029,139
==========
</TABLE>

7. DEFERRED REVENUE

Deferred revenue consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------
<S> <C>
Deferred license revenue.................................... $2,139,534
Deferred maintenance revenue................................ --
----------
$2,139,534
==========
</TABLE>

Deferred revenue consists of cash received from customers or amounts billed
in advance of revenue recognition. During 1999, the Company changed its
maintenance billing practices for most customers from a monthly billing cycle to
a quarterly or annual billing cycle, depending upon the customer, thereby giving
rise to deferred maintenance revenue at September 30, 1999.

8. CREDIT FACILITY

On June 23, 1999, the Company entered into a credit agreement with Fleet
Bank ("the Bank"), pursuant to which the Company may borrow up to $5.0 million
under a revolving loan and a working capital loan.

The revolving loan provides the Company with borrowing capacity of up to
$2.5 million. Quarterly payments under the terms of the loan must equal or
exceed $250,000 beginning December 31, 1999. The borrowing base under the
working capital loan is equal to 85% of eligible receivables, less $500,000, and
in the aggregate, can not exceed $2.5 million. The loan expires on May 31, 2000
and may be extended for an additional year.

Credit facilities under the agreement bear interest at either the Bank's
reference rate, generally equivalent to prime rate, or LIBOR plus an applicable

F-19
<PAGE> 113
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

margin (may vary between 2.5% and 3% depending on certain ratios of the Company
as defined in the agreement). The applicable borrowing rate at September 30,
1999 was 8 1/4%. (unaudited)

Borrowing under the loans on September 30, 1999 amounted to $2.0 million
all under the revolving loan. (unaudited)

Under the terms of the credit agreement, the Company is required to
maintain certain financial ratios. The loans are secured by substantially all
assets of the Company. In addition, the Bank has a pledge from certain
affiliates of approximately 75% of the common stock outstanding. The Bank has
first security in and a lien on these shares of common stock.

Pursuant to the agreement, the Company is required to repay the facilities
in full upon the event of a public offering.

9. INCOME TAXES

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
THROUGH
DECEMBER 31, 1998
-----------------
<S> <C>
Current tax provision
Foreign taxes............................................... $ --
State and City............................................ 35,735
-------
Total current tax provision....................... 35,735
Deferred tax provision
Foreign................................................... --
State and City............................................ --
-------
Total deferred tax provision...................... --
-------
Provision for income taxes.................................. $35,735
=======
</TABLE>

F-20
<PAGE> 114
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The effective income tax rate differs from the statutory U.S. Federal
income tax rate for the following reasons:

<TABLE>
<CAPTION>
FOR THE
PERIOD FROM
INCEPTION
THROUGH
DECEMBER 31, 1998
-----------------
<S> <C>
Statutory U.S. federal income tax........................... $ --
Local income taxes, net of federal income tax benefit....... 35,735
Foreign income taxes........................................ --
Taxes receivable............................................ --
-------
Provision for income taxes, at effective rate............... $35,735
=======
</TABLE>

10. 401(k) SAVINGS PLAN

ZNLP had previously maintained a 401(k) Savings Plan (the "Plan").
Effective with the acquisition of ZNLP by Caminus, the ZNLP plan was extended to
all eligible domestic employees of Caminus. Employees are eligible to
participate in the Plan upon completion of six months of service with the
Company. Eligible employees may contribute up to 15% of their annual
compensation to the Plan on a pre-tax basis. Participant contributions to the
Plan are immediately vested. In addition, under the terms of the Plan, the
Company, at its discretion, may match all or a portion of a participant's
contribution to the Plan up to 10% of the participant's compensation. This
matching percentage is determined by the Company prior to the start of each Plan
year. The Company matching contribution is made at calendar year end.
Participants become vested in Company matching contributions to the Plan at the
rate of 20% per year of service with the Company. For 1998, the Company elected
to match 100% of participant contributions up to a maximum of $1,000 per
participant. The 401(k) expense for the period from Inception through December
31, 1998 totaled $30,445.

11. STOCK OPTION PLAN

In May 1998, ZNLP established its stock option plan (the "ZNLP Plan"). Upon
closing of the purchase of the remaining 29% of ZNLP by the Company on December
31, 1998, Caminus canceled the options outstanding under the ZNLP Plan and
issued to the employees options to purchase shares of Caminus common stock.
Costs associated with this transaction were accounted for as part of the ZNLP
acquisition purchase price. In February 1999, the Management Committee approved
the adoption of the ZNLP Plan for all eligible Caminus employees (the "Plan").
The Plan provides for the issuance of stock options to key employees and
consultants of the Company. Under the terms of the Plan, options are granted to
purchase common stock in the Company at a price not less than 100% of the fair
market value on the date of the grant. The options generally vest over a period
of

F-21
<PAGE> 115
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

four years and are exercisable for a period of ten years from the date of the
grant. Upon adoption of the Plan, the Company reserved interests equivalent to
9.0% of total outstanding shares of common stock for the exercise of vested
options.

The following table summarizes the Company's option plan activity:

<TABLE>
<CAPTION>
PERIOD FROM INCEPTION
THROUGH DECEMBER 31, 1998
---------------------------
WEIGHTED AVERAGE
EXERCISE PRICE
OPTIONS PER SHARE
------- ----------------
<S> <C> <C>
Outstanding at beginning of period................ --
Granted........................................... 604,891 $2.74
Exercised......................................... --
Canceled.......................................... --
-------
Outstanding at end of year........................ 604,891 $2.74
=======
Options exercisable at period end................. --
=======
</TABLE>

The following table summarizes information about stock options outstanding
at December 31, 1998:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
-----------------------------------------------------
NUMBER
OUTSTANDING WEIGHTED AVERAGE WEIGHTED
RANGE OF AT DECEMBER 31, REMAINING AVERAGE EXERCISE
EXERCISE PRICES 1998 CONTRACTUAL LIFE PRICE
- --------------- --------------- ---------------- ----------------
<S> <C> <C> <C>
$2.31 397,637 9.3 years $2.31
$3.05-$4.62 207,254 9.5 years 3.57
--------
604,891 2.74
========
</TABLE>

At December 31, 1998, options to purchase approximately 270,550 shares were
available for grant.

The Company applies APB 25 and related interpretations in accounting for
its Plan and other stock-based compensation issued to employees. During the
period from Inception through December 31, 1998 the Company did not recognize
compensation expense related to option grants. No options have been granted to
consultants.

Had compensation cost for the Company's option plan been determined based
upon the fair value at the grant date for awards under the plan consistent with
the methodology prescribed under SFAS 123, the Company's net loss would have
been increased by approximately $67,000 in the period from Inception through
December 31, 1998. The fair values of options granted to employees during the

F-22
<PAGE> 116
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

period from Inception through December 31, 1998 has been determined on the date
of the respective grant using the Black-Scholes option pricing model
incorporating the following weighted average assumptions: (1) risk-free interest
rate of 5.50%; (2) dividend yield of 0.00%; (3) expected life of five years; and
(4) volatility of 40%.

The pro forma effects above may not be representative of the effects on
future years because of the prospective application required by SFAS 123 and the
fact that options vest over several years and new grants generally are made each
year.

12. COMMITMENTS AND CONTINGENCIES

The Company leases office space in New York City, London and Houston under
long-term leases.

Future minimum annual lease commitments are as follows:

<TABLE>
<S> <C>
1999...................................................... $ 679,972
2000...................................................... 746,222
2001...................................................... 728,223
2002...................................................... 583,597
2003...................................................... 271,900
Thereafter................................................ 1,098,900
----------
$4,108,814
==========
</TABLE>

Rent expense for the period from Inception through December 31, 1998 was
$320,800.

In July 1999, the Company entered into an addendum to one of the existing
lease agreements for additional office space. Additional minimum lease payments
under this lease addendum are as follows:

<TABLE>
<S> <C>
July 1, 1999 through December 31, 1999.................... $ 19,016
2000...................................................... 76,062
2001...................................................... 76,062
2002...................................................... 76,062
2003...................................................... 409,066
Thereafter................................................ 431,676
----------
$1,087,944
==========
</TABLE>

F-23
<PAGE> 117
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

will not have a material adverse effect on the financial position, results of
operations or cash flows of the Company.

13. RELATED PARTY TRANSACTIONS

SS&C

In May 1998 SS&C Technologies ("SS&C") purchased 1,762,301 shares of common
stock for $3.0 million of cash and the contribution of an exclusive distribution
agreement for 39 months to sell certain products developed by SS&C having an
initial value of $2.5 million. In addition, SS&C was granted a warrant to
purchase an additional 800,952 shares of common stock with an exercise price of
$0.11 per share. The original distribution agreement was capitalized as an asset
and would have been amortized to income on a straight line basis over its life.
Under the terms of the original distribution agreement, the warrant would vest
and become exercisable at the earlier of 39 months from the grant or the sale or
public offering of the Company. The number of shares exercisable was dependent
on the revenue levels derived from the sales of SS&C products by the Company. No
value was assigned to this warrant due to the great uncertainty as to the amount
of revenue, if any, that would be derived under the original distribution
agreement. The Company initially expected that the Caminus and SS&C products
would complement each other. However, Caminus later determined that it would not
invest its resources to sell this product.

On December 31, 1998 the Company repurchased all of the common stock and
the warrant to acquire common stock held by SS&C for total consideration of
approximately $4.9 million. The consideration of $4.9 million, which was charged
to treasury stock, consisted of cash of approximately $2.3 million, the net
value of the cancelled distribution agreement of approximately $2.2 million and
the issuance of an option to acquire 277,052 shares of common stock of the
Company for $1.8 million (the "SS&C Option"), which has been valued at
approximately $0.5 million using the Black-Scholes option pricing model. The
SS&C Option was fully vested as of December 31, 1998 and expires on December 31,
2003. As of December 31, 1998, the Company recorded a note payable for the cash
portion of the repurchase of equity.

Simultaneously with the repurchase of the SS&C shares of common stock, the
Company entered into a distribution agreement with SS&C (the "Distribution
Agreement"). This agreement gives the Company the exclusive right to sell the
same SS&C software products as the original distribution agreement into the
energy market. Total guaranteed minimum payments under the terms of the
Distribution Agreement, as amended, were $2,750,000 of which $2,000,000 had been
paid through September 30, 1999.

As of December 31, 1998, the Company had not sold any of the SS&C products
acquired under the Distribution Agreement. Further, the Company does not have an
active plan to sell the software, which was acquired pursuant to the terms of
the distribution agreement. Because the Company has not resold any SS&C
software, nor does it have a formal plan in place to resell this software, the
total guaranteed

F-24
<PAGE> 118
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

minimum payments to SS&C as stipulated in the Distribution Agreement have been
recorded as a charge in the statement of operations. The amount of $2,750,000
has been included in "Amortization of intangible assets" in the consolidated
statement of operations for the period from Inception through December 31, 1998.

OTHER TRANSACTIONS

On October 21, 1998, in connection with his employment with the Company,
the Chief Executive Officer ("CEO") was loaned $1,000,000 by the Company in
order to acquire shares of common stock. The loan bears interest at a rate of
9%, and all accrued and unpaid interest is payable upon maturity (October 2008).
The loan is secured by the shares of common stock. In addition, on October 21,
1998, the Company loaned the CEO $100,000. The loan bears interest at a rate of
9%; all accrued and unpaid interest is payable upon maturity. The $100,000 loan
was repaid, including interest, in November 1999.

Additionally, in connection with the CEO's employment agreement, if certain
performance criteria and other conditions are met, the CEO would receive a bonus
based on forgiveness of the entire outstanding amount of the $1.0 million loan
plus accrued interest as well as additional shares of common stock. Such amounts
would be expected to be earned upon an IPO and would result in a compensation
related charge when earned of approximately $3.2 million based on the estimated
mid-point of the IPO filing range. (unaudited)

During 1999, Caminus made a distribution of $290,000 and recorded an
obligation to distribute $600,000 to its shareholders, for the estimated tax
associated with the former LLC's taxable income.

In connection with the acquisition of the 29% minority interest in ZNLP,
the earnout payments to the shareholder of ZNLP were guaranteed. The remaining
amounts owed are recorded as "payable to related parties" in the consolidated
balance sheet.

On September 1, 1998, in connection with his employment with the Company,
an employee was loaned $74,638 by the Company to acquire a portion of his shares
of common stock. The loan bears interest at a rate of 9%, and all accrued and
unpaid interest is payable upon maturity (September 2008). The loan is secured
by the membership interests. (unaudited)

Upon an IPO, the Company would be required to pay two officers of the
Company (the former shareholders of CEL) a special bonus of $476,000.
(unaudited)

As outlined in the former LLC Agreement, the Company is required to pay to
GFI Energy Ventures ("GFI"), a shareholder of the Company, an annual management
fee as consideration for financial, tax and general and administrative services.
This fee is calculated as 1% of the shareholders aggregate adjusted capital
contribution. Total management fees incurred for the period from Inception
through December 31, 1998 and for the nine months ended September 30, 1999 were
approximately $160,000 and $293,310, respectively. In November 1999, the

F-25
<PAGE> 119
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company agreed to terminate its advisory arrangement with GFI effective as of
December 31, 1999. As consideration, the Company will pay GFI $1,300,000 from
the net proceeds of the initial public offering. (unaudited)

14. CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade accounts receivable.
The Company controls this risk through credit approvals, customer limits and
monitoring procedures. Additionally, the Company can limit the amount of support
provided to its customers in the event of non-payment. During the period from
Inception through December 31, 1998, there were no customers who represented
more than 10% of consolidated revenues. At December 31, 1998, there were no
customers who represented more than 10% of the Company's accounts receivable.

15. SEGMENT REPORTING

The Company has two reportable segments: software and strategic consulting.
Software comprises the licensing of the Company's software products and the
related implementation and maintenance services. Strategic consulting provides
energy market participants with professional advice regarding where and how to
compete in their respective markets. In evaluating financial performance,
management uses earnings before interest and other income, income taxes,
depreciation and amortization, the write-off of acquired IPR&D, terminated
acquisition costs, and non-cash compensation expense ("Adjusted EBITDA") as the
measure of a segment's profit or loss. Terminated acquisition costs represent
costs associated with a potential acquisition that management ultimately decided
not to pursue.

The accounting policies of the reportable segments are the same as those
described in Note 2. There are no inter-segment revenues or expenses between the
two reportable segments.

Geographic information for the Company, for the period from Inception
through December 31, 1998 is summarized in the table below. The Company's
international revenues were derived primarily from the United Kingdom and the
Company's international long-lived assets at December 31, 1998 resided primarily
in the United Kingdom.

F-26
<PAGE> 120
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table illustrates the financial results of the two reportable
segments:

<TABLE>
<CAPTION>
PERIOD FROM INCEPTION NINE MONTHS ENDED
THROUGH DECEMBER 31, 1998 SEPTEMBER 30, 1999
------------------------- -------------------------
STRATEGIC STRATEGIC
SOFTWARE CONSULTING SOFTWARE CONSULTING
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Operating Results:
Revenues:
Licenses............ $ 3,639,143 $ -- $ 8,088,621 $ --
Software services... 3,090,758 -- 5,679,513 --
Strategic
consulting........ -- 2,896,102 -- 4,757,425
----------- ----------- ----------- -----------
Total revenues.... $ 6,729,901 $ 2,896,102 $13,768,134 $ 4,757,425
=========== =========== =========== ===========
Adjusted EBITDA........ $ 364,859 $ (9,704) $ 786,407 $ 1,293,340
Terminated acquisition
costs.................. -- -- (350,000) --
Non-cash compensation
expense............. -- -- (111,730) --
Acquired IPR&D......... (4,822,000) -- (1,000,000) --
----------- ----------- ----------- -----------
(4,457,141) (9,704) (675,323) 1,293,340
Depreciation and
amortization........ (4,247,077) (1,419,444) (4,779,500) (1,620,117)
----------- ----------- ----------- -----------
Operating loss......... (8,704,218) (1,429,148) (5,454,823) (326,777)
=========== =========== =========== ===========
Other Data:
Capital expenditures... $ 379,677 $ 120,920 $ 594,129 $ 205,733
=========== =========== =========== ===========
AS OF AS OF
DECEMBER 31, 1998 SEPTEMBER 30, 1999
------------------------- -------------------------
Total assets........... $24,477,822 $ 6,591,180 $34,222,919 $ 6,645,712
=========== =========== =========== ===========
</TABLE>

The Company maintains a corporate division solely for administrative
purposes. This division does not generate revenues, and corporate expenses,
which are not significant, are primarily contained in the software segment.
Additionally, items recorded in the consolidated financial statements for
purchase accounting, such as goodwill, intangible assets and related
amortization, have been pushed down to the respective segments for segment
reporting purposes.

F-27
<PAGE> 121
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
PERIOD FROM
INCEPTION
THROUGH
DECEMBER 31, 1998
-----------------
<S> <C>
Revenues:
United States............................................... $ 5,743,168
International (principally the United Kingdom)............ $ 3,882,835
</TABLE>

<TABLE>
<CAPTION>
AS OF
DECEMBER 31, 1998
-----------------
<S> <C>
Long-lived assets:
United States............................................... $19,681,870
International (principally the United Kingdom)............ $ 5,065,802
</TABLE>

16. SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
INCEPTION INCEPTION NINE MONTHS
THROUGH THROUGH ENDED
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1998 1998 1999
------------ ------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Accrual of SS&C option buyback....... $ -- $ -- $ 250,000
Issuance of equity in connection with
the acquisition of DC Systems........ -- 3,000,000
Notes payable issued in connection
with the acquisition of Zai*Net
Software, L.P...................... 4,375,000 4,375,000 --
Issuance of equity in connection with
the acquisition of Caminus Energy
Limited............................ 3,000,000 3,000,000 --
Issuance of equity for the
contributed distribution
agreement.......................... 2,500,000 2,500,000 --
Issuance of equity in connection with
the acquisition of Zai*Net
Software, L.P. minority interest... 10,339,350 -- --
</TABLE>

F-28
<PAGE> 122
CAMINUS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
INCEPTION INCEPTION NINE MONTHS
THROUGH THROUGH ENDED
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1998 1998 1999
------------ ------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Purchase of treasury stock by issuing
a note payable ($2,250,000),
cancellation of the original
distribution agreement ($2,166,667)
and grant of an option to acquire
common stock of the Company
($494,538)........................... 4,911,205 -- --
Notes receivable for sale of stock... 1,000,000 -- --
</TABLE>

F-29
<PAGE> 123

CAMINUS LLC
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

Allowance for doubtful accounts:

<TABLE>
<S> <C>
Balance, April 29, 1998..................................... $228,644
Provision................................................... --
Recoveries................................................ --
Charge-offs............................................... --
--------
Balance, December 31, 1998.................................. 228,644
Provision................................................. 75,000
Recoveries................................................ --
Charge-offs............................................... --
--------
Balance, September 30, 1999................................. $303,644
========
</TABLE>

F-30
<PAGE> 124

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholder of ZAI*NET Software, Inc.

In our opinion, the financial statements listed in the accompanying index
on page F-1 present fairly, in all material respects, the financial position of
ZAI*NET Software, Inc. at December 31, 1996 and 1997 and April 30, 1998, and the
results of its operations and its cash flows for the years ended December 31,
1996 and 1997, and the four months ended April 30, 1998, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

As discussed in Note 12, as of December 31, 1998, ZAI*NET Software, Inc.
sold 100% of its assets to GFI Caminus LLC.

PRICEWATERHOUSECOOPERS LLP

New York, New York
August 28, 1998

F-31
<PAGE> 125

ZAI*NET SOFTWARE, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- APRIL 30,
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................ $ 242,208 $ 146,961 $1,097,742
Certificate of deposit........................... 51,664 54,355 54,355
Accounts receivable.............................. 788,107 1,704,551 1,678,491
Prepaid expenses and other current assets........ 20,440 28,934 125,487
---------- ---------- ----------
Total current assets.......................... 1,102,419 1,934,801 2,956,075
---------- ---------- ----------
Fixed assets, net.................................. 165,183 248,338 302,078
Other assets....................................... 7,190 10,240 11,950
---------- ---------- ----------
Total assets.................................. $1,274,792 $2,193,379 $3,270,103
========== ========== ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable................................. $ 184,210 $ 185,275 $ 188,407
Accrued expenses................................. 189,942 431,441 991,875
Deferred revenue................................. 386,716 1,339,434 1,435,084
Loan payable to stockholder...................... 154,500 -- --
Loan payable to employee......................... 6,550 -- --
Loan payable to related party.................... 100,000 -- --
Current portion of note payable for repurchase of
options....................................... 29,000 3,000 --
---------- ---------- ----------
Total current liabilities..................... 1,050,918 1,959,150 2,615,366
---------- ---------- ----------
Note payable for repurchase of options............. 3,000 -- --
---------- ---------- ----------
Total liabilities............................. 1,053,918 1,959,150 2,615,366
---------- ---------- ----------

Stockholder's equity:
Common stock, without par value; 2,000 shares
authorized; 480 shares issued and
outstanding................................... 1 1 1
Retained earnings................................ 220,873 234,228 654,736
---------- ---------- ----------
Total stockholder's equity.................... 220,874 234,229 654,737
---------- ---------- ----------
Total liabilities and stockholder's equity.... $1,274,792 $2,193,379 $3,270,103
========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-32
<PAGE> 126

ZAI*NET SOFTWARE, INC.

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

<TABLE>
<CAPTION>
YEAR ENDED FOUR MONTHS
DECEMBER 31, ENDED
------------------------ APRIL 30,
1996 1997 1998
---------- ---------- -----------
<S> <C> <C> <C>
Revenues:
Licenses............................. $1,291,427 $1,521,447 $1,495,221
Software services.................. 1,429,860 2,667,807 1,334,473
---------- ---------- ----------
Total revenues.................. 2,721,287 4,189,254 2,829,694
---------- ---------- ----------
Cost of revenues..................... 999,142 1,331,482 734,242
---------- ---------- ----------
Gross profit.................... 1,722,145 2,857,772 2,095,452
---------- ---------- ----------
Operating expenses:
Research and development........... 628,317 1,223,715 580,031
Selling, general and
administrative.................. 990,767 1,638,293 1,079,391
---------- ---------- ----------
Total operating expenses........ 1,619,084 2,862,008 1,659,422
---------- ---------- ----------
Income (loss) from operations........ 103,061 (4,236) 436,030
---------- ---------- ----------
Interest income (expense), net....... (2,197) 17,591 8,294
---------- ---------- ----------
Income before provision for income
taxes.............................. 100,864 13,355 444,324
---------- ---------- ----------
Provision for income taxes........... -- -- 23,816
---------- ---------- ----------
Net income...................... 100,864 13,355 420,508
---------- ---------- ----------
Retained earnings, beginning of
year............................... 120,009 220,873 234,228
---------- ---------- ----------
Retained earnings, end of year....... $ 220,873 $ 234,228 $ 654,736
========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-33
<PAGE> 127

ZAI*NET SOFTWARE, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED FOUR MONTHS
DECEMBER 31, ENDED
---------------------- APRIL 30,
1996 1997 1998
--------- --------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................................... $ 100,864 $ 13,355 $ 420,508
--------- --------- ----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization....................... 101,118 123,090 46,141
Stock option repurchases............................ 20,000 -- --
Changes in operating assets and liabilities:
Accounts receivable................................. (338,449) (916,444) 26,060
Prepaid expenses and other current assets........... (18,725) (8,494) (96,553)
Other assets........................................ 1,081 (5,741) (1,710)
Accounts payable.................................... -- 1,065 3,132
Accrued expenses.................................... 121,005 241,499 560,434
Deferred revenue.................................... 144,216 952,718 95,650
--------- --------- ----------
Net cash provided by operating activities................ 131,110 401,048 1,053,662
--------- --------- ----------
Cash flows from investing activities:
Purchase of certificate of deposit..................... (20,000) -- --
Purchases of fixed assets.............................. (80,112) (206,245) (99,881)
--------- --------- ----------
Net cash used in investing activities.................... (100,112) (206,245) (99,881)
--------- --------- ----------
Cash flows from financing activities:
(Repayment of) proceeds from loan payable to a related
party............................................... 100,000 (100,000) --
Repayment of loans payable to stockholder.............. (2,000) (154,500) --
Repayment of loans payable to employee................. (4,550) (6,550) --
Repayment of notes payable for repurchase of options... (39,000) (29,000) (3,000)
--------- --------- ----------
Net cash (used in) provided by financing activities...... 54,450 (290,050) (3,000)
--------- --------- ----------
Net (decrease) increase in cash and cash equivalents..... 85,448 (95,247) 950,781
Cash and cash equivalents, beginning of year............. 156,760 242,208 146,961
--------- --------- ----------
Cash and cash equivalents, end of year................... $ 242,208 $ 146,961 $1,097,742
========= ========= ==========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest............................................ $ 7,934 $ 6,015 $ --
Issuance of note payable for stock option
repurchase........................................ $ 20,000 $ -- $ --
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-34
<PAGE> 128

ZAI*NET SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

ZAI*NET Software, Inc. (the "Company") is a Delaware corporation
headquartered in New York, which licenses, customizes and services ZAI*NET, an
integrated real-time front, middle, and back office software trading system for
foreign exchange, commodities, energy, options and other financial products.

REVENUE RECOGNITION

The Company generates revenue from the licensing of its software products
and performing services related to the implementation, training and support of
these products. The Company has adopted the provisions of Statements of Position
(SOP) 97-2 "Software Revenue Recognition". Adoption of this accounting
pronouncement did not materially affect the Company's financial statements.

Software Services revenue includes consulting services for installation,
data conversion and training related to the use of the Company's licensed
products. Customers often enter into arrangements for these services concurrent
with execution of license agreements. The services do not require significant
modification of the licensed products, are not essential to their functionality,
are available from other vendors and payment obligations with respect to the
licensed products are not dependent upon the performance of these services.
Accordingly, the Company recognizes revenues for these services as they are
performed. Maintenance and support revenues associated with new product licenses
and renewals where vendor-specific objective evidence exists, are deferred and
recognized ratably over the contract period. Contracts provide for an initial
maintenance period, which is annual, and a renewal period after expiration of
the initial maintenance period. Customers are permitted, but not required, to
renew their maintenance with us after expiration of the initial annual period.
The renewal rate for maintenance services is based on the initial license fee
and is used to establish the VSOE for maintenance revenues.

SOFTWARE DEVELOPMENT COSTS

All costs incurred in developing software products are expensed as research
and development expenses in the period incurred. Software development costs
incurred subsequent to the establishment of technological feasibility are not
material.

F-35
<PAGE> 129
ZAI*NET SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

CASH AND CASH EQUIVALENTS

Cash equivalents are defined as highly liquid investments with an initial
maturity of three months or less.

FIXED ASSETS

Fixed assets are stated at cost, less accumulated depreciation.
Depreciation is calculated using the straight-line method over the estimated
useful life of the related asset. Estimated useful lives generally range from
three to five years.

INCOME TAXES

The Company has elected to be treated as a Subchapter S Corporation for
federal and state income tax purposes. Accordingly, the sole stockholder of the
Company is responsible for federal and state income taxes resulting from the
Company's earnings. The Company is subject to certain other state and city
taxes, which are charged to operations as incurred.

The Company accounts for income taxes under the requirements of SFAS 109,
"Accounting for Income Taxes," which uses an asset and liability approach to
measure income tax expense. The asset and liability approach requires the
recognition of deferred tax assets and liabilities for the expected future
consequences of temporary differences between the financial statement amounts
and the tax basis of certain assets and liabilities.

For the four-month period ended April 30, 1998, $77,486 was recorded for
state and local income taxes payable by the Company. Subsequent to April 30,
1998, the tax status of the Company changed. Refer to Note 12, subsequent
events, for further details.

ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company has adopted Statement of Financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock-Based Compensation." As permitted by
this Statement, the Company continues to apply Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," in accounting for
its stock-based employee compensation arrangements. No compensation expense has
been recognized for the Company's stock-based compensation plans as the exercise
price of the stock options is not less than the fair value of the underlying
common stock on the date of grant.

FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist primarily of cash, accounts
receivable, accounts payable and loans payable. The current carrying amount of
these instruments approximates fair market value.

F-36
<PAGE> 130
ZAI*NET SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

USE OF ESTIMATES

The financial statements were prepared in conformity with generally
accepted accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

2. FIXED ASSETS

Fixed assets consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, APRIL 30,
1996 1997 1998
-------- -------- ---------
<S> <C> <C> <C>
Computer and office equipment ............. $383,169 $565,973 $658,591
Furniture and fixtures..................... 42,826 66,267 73,530
Automobile................................. 21,403 21,403 21,403
-------- -------- --------
447,398 653,643 753,524
Less -- Accumulated depreciation and
amortization............................. 282,215 405,305 451,446
-------- -------- --------
$165,183 $248,338 $302,078
======== ======== ========
</TABLE>

3. ACCRUED EXPENSES

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, APRIL 30,
1996 1997 1998
-------- -------- ---------
<S> <C> <C> <C>
Payroll and benefits....................... $189,942 $149,592 $397,382
Legal and professional fees................ -- -- 363,073
Litigation settlement...................... -- 175,000 175,000
Other Expenses............................. -- 106,849 56,420
-------- -------- --------
$189,942 $431,441 $991,875
======== ======== ========
</TABLE>

4. EMPLOYEE STOCK OPTIONS

In August 1996, the Company repurchased, from a former employee, options to
purchase 5 shares of the Company's common stock in exchange for a $20,000
non-interest bearing note. Payments of this note are in monthly installments of
$1,000 commencing August 1, 1996. The note was repaid in full in March 1998.

In May 1995, the Company repurchased, from a former employee, options to
purchase 17 shares of the Company's common stock in exchange for an $87,000
noninterest-bearing note, of which $36,000, $34,000, and $17,000 were paid in
1995, 1996, and 1997, respectively.

F-37
<PAGE> 131
ZAI*NET SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The following tables summarizes the Company's stock option activity for the
years ended December 31, 1996 and 1997 and the four months ended April 30, 1998:

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED FOUR MONTHS ENDED
DECEMBER 31, 1996 DECEMBER 31, 1997 APRIL 29, 1998
------------------------- ------------------------- -------------------------
WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED AVERAGE
EXERCISE PRICE EXERCISE PRICE EXERCISE PRICE
SHARES PER SHARE SHARES PER SHARE SHARES PER SHARE
------ ---------------- ------ ---------------- ------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of
year............... 58 $1,431 300 $3,799 300 $3,799
Granted.............. 247 $4,400 -- -- -- --
Exercised............ -- -- -- -- -- --
Canceled............. -- -- -- -- -- --
Repurchased.......... 5 6,000 -- --
Outstanding at end of
year............... 300 $3,799 300 $3,799 300 $3,799
Options exercisable
at year end........ 300 $3,799 300 $3,799 300 $3,799
</TABLE>

The range of exercise prices for options outstanding at December 31, 1996
and 1997 and April 30, 1998 was $1,000 - $4,400.

The weighted average remaining contractional life for options with a
weighted average exercise price of $3,799 is 7.8 years.

The Company continues to apply APB 25, "Accounting for Stock Issued to
Employees," in accounting for stock options issued to employees. Accordingly, no
compensation expense has been recognized for its stock based compensation plans.
Had compensation cost for the Company's stock option plan been determined based
on the fair value at the grant date, consistent with the methodology prescribed
under Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation," the impact on net income would not have been material
for any period.

5. 401(K) SAVINGS PLAN

The Company maintains a 401(k) Savings Plan (the "Plan"). Employees are
eligible to participate in the Plan upon completion of six months of service
with the Company. Eligible employees may contribute up to 15% of their annual
compensation to the Plan on a pre-tax basis. Participant contributions to the
Plan are immediately vested. In addition, under the terms of the Plan, the
Company, at its discretion, may match all or a portion of a participant's
contribution to the Plan up to 10% of the participant's compensation. This
matching percentage is determined by the Company prior to the start of each Plan
year. The Company matching contribution is made at calendar year end and
participants become vested in Company matching contributions to the plan at the
rate of 20% per year of service. The Company elected to match 100% of
participant contributions up to a maximum of $1,000 per participant for 1996,
1997 and 1998. Compensation

F-38
<PAGE> 132
ZAI*NET SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

expense for the plan was approximately $12,000, $16,000 and $7,500 for 1996,
1997 and for the four months ended April 30, 1998, respectively.

6. TRANSACTIONS WITH RELATED PARTIES

LOAN PAYABLE TO RELATED PARTY

In September 1996, the Company borrowed $100,000 from the family of a
shareholder of the Company. The loan bore interest at the rate of 8% and $2,000
and $6,000 of interest expense was paid in 1996 and 1997, respectively. This
loan was repaid in full in 1997.

7. LINE OF CREDIT

The Company maintained a $150,000 demand line of credit with a bank.
Interest on outstanding borrowings under the line of credit was based on the
prime lending rate plus two percent.

The line of credit required the Company to maintain a $50,000 interest
bearing certificate of deposit with the bank. There were no amounts outstanding
under the line of credit for any period.

8. INCOME TAXES

The provision (benefit) for income taxes for the four-month period ended
April 30, 1998 consists of the following:

<TABLE>
<S> <C>
Current provision........................................... $ 77,486
Deferred benefit............................................ (53,670)
--------
Total provision............................................. $ 23,816
========
</TABLE>

Since the Company's basis of accounting for tax purposes is the cash
receipts and disbursements method, the most significant components of the
deferred tax asset are accrued items of income and expense not recognized for
tax purposes until received or paid.

9. COMMITMENTS

The Company leases office space in New York City, London, Houston and
Singapore under long-term leases. Future minimum annual lease commitments are as
follows:

<TABLE>
<S> <C>
May 1, 1998 Through December 31, 1998....................... $ 238,933
1999........................................................ 384,842
2000........................................................ 354,202
2001........................................................ 354,177
Thereafter.................................................. 430,039
----------
$1,762,193
==========
</TABLE>

Rent expense in 1996, 1997 and for the four months ended April 30, 1998
totaled $207,297, $239,303 and $116,712, respectively.

F-39
<PAGE> 133
ZAI*NET SOFTWARE, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

10. CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

The Company's customer base consists primarily of companies in the
financial services and energy industry groups. Although the Company is directly
affected by the well being of these industries, management does not believe
significant credit risks exists as of April 30, 1998.

Three customers accounted for 46%, 18% and 9% of total accounts receivable
at December 31, 1996 and 22% of revenues in 1996. Two customers accounted for
13% and 10% of total accounts receivable at December 31, 1997 and 29% of
revenues for 1997. Two customers accounted for 17% and 10% of accounts
receivable at April 30, 1998 and one customer accounted for 18% of revenues for
the four months ended April 30, 1998.

11. LITIGATION

An action was commenced in 1989 against the Company in which a former
employee (the "plaintiff") alleged four causes of action and sought monetary
damages of $2,000,000. The plaintiff also alleged two additional causes of
action against the current stockholder and a former stockholder and sought
aggregate damages of $5,000,000. These actions relate to the plaintiff's claim
that the Company promised the plaintiff an ownership interest in the Company and
a share of the Company's profits derived from software the plaintiff allegedly
developed in exchange for the plaintiff's promise to work for the Company. The
case was settled for $175,000 on May 11, 1998 and all required liabilities were
accrued at December 31, 1997 and April 30, 1998.

12. SUBSEQUENT EVENTS

On May 12, 1998, the Company transferred substantially all of its assets
and liabilities to ZAI*NET SOFTWARE, L.P. (the "Partnership"), a Partnership 99%
owned by the Company and 1% owned by the sole stockholder of the Company.
Immediately following this transfer the Partnership agreed to sell 70% of its
ownership interest and the stockholder agreed to sell his 1% ownership interest
to GFI Caminus LLC ("GFI"). The Company retained the remaining 29% ownership
interest in the newly formed Partnership. The remaining ownership interest was
sold to GFI on December 31, 1998. (Unaudited)

F-40
<PAGE> 134

CAMINUS LIMITED
(FORMERLY CAMINUS ENERGY LIMITED)
REPORT OF INDEPENDENT AUDITORS TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
CAMINUS LIMITED
- --------------------------------------------------------------------------------

We have audited the accompanying balance sheets of Caminus Limited at 30
April 1997 and 30 April 1998 and related profit and loss account and statement
of cash flows for each of the years ended 30 April 1997 and 30 April 1998. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards in the United Kingdom, which are substantially the same as those
followed in the United States. These standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for opinion.

In our opinion the financial statements referred to above present fairly,
in all material respects, the financial position of Caminus Limited at 30 April
1997 and 30 April 1998 and the results of its operations and cash flows for each
of the years ended 30 April 1997 and 30 April 1998 in conformity with accounting
principles generally accepted in the United Kingdom.

The financial statements were prepared in accordance with accounting
principles generally accepted in the United Kingdom, the application of which by
Caminus Limited does not differ materially from accounting principles generally
accepted in the United States, except in respect of the presentation of cash
flow information, as detailed in note 14(a) to the financial statements.

The United States Dollar equivalent data presented in these financial
statements is included for information only. It does not, and is not meant to,
reflect the financial statements had they been translated in accordance with
United States Generally Accepted Accounting Principles, as explained in note
14(b) to the financial statements.

PETERS ELWORTHY & MOORE
Chartered Accountants and
Registered Auditors

CAMBRIDGE, ENGLAND
30 September 1998

F-41
<PAGE> 135

CAMINUS LIMITED
(FORMERLY CAMINUS ENERGY LIMITED)

PROFIT AND LOSS ACCOUNTS
FOR THE YEARS ENDED 30 APRIL 1997 AND 30 APRIL 1998
- --------------------------------------------------------------------------------

In this prospectus, certain UK Sterling amounts have been translated into
United States dollars at the rate of L1 to US $1.67. Such translations should
not be construed as representations that the UK Sterling amounts represent, or
have been or could be converted into, United States Dollars at that or any other
rate.

<TABLE>
<CAPTION>
NOTES 1997 1998 1998
----- --------- --------- ---------
L L US $
<S> <C> <C> <C> <C>
TURNOVER 2 2,059,887 2,516,579 4,202,687
Cost of sales 978,614 1,147,253 1,915,913
--------- --------- ---------
Gross profit 1,081,273 1,369,326 2,286,774
Administrative expenses 638,982 742,646 1,240,219
--------- --------- ---------
OPERATING PROFIT 3 442,291 626,680 1,046,555
Interest receivable 12,411 17,446 29,135
--------- --------- ---------
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 454,702 644,126 1,075,690
Tax on profit on ordinary activities 5 126,427 172,285 287,716
--------- --------- ---------
PROFIT ON ORDINARY ACTIVITIES AFTER
TAXATION 328,275 471,841 787,974
Dividend 404,991 480,118 801,797
--------- --------- ---------
RETAINED (LOSS) FOR YEAR (76,716) (8,277) (13,823)
Retained profit brought forward 311,901 235,185 392,759
--------- --------- ---------
RETAINED PROFIT CARRIED FORWARD 235,185 226,908 378,936
========= ========= =========
</TABLE>

There are no recognised gains and losses in the year other than the retained
loss for the year.

All items dealt with in arriving at turnover and operating profit for each year
relate to continuing activities.

The attached notes form part of these financial statements.

F-42
<PAGE> 136

CAMINUS LIMITED
(FORMERLY CAMINUS ENERGY LIMITED)

BALANCE SHEETS
AS AT 30 APRIL 1997 AND 30 APRIL 1998
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
NOTES 1997 1998 1998
----- --------- --------- ---------
L L US $
<S> <C> <C> <C> <C>
FIXED ASSETS
Tangible assets 6 47,038 87,065 145,399
Investments 7 200 200 334
--------- --------- ---------
47,238 87,265 145,733
CURRENT ASSETS
Work in Progress -- 9,483 15,837
Debtors 8 535,691 564,441 942,616
Cash at bank and in hand 531,223 311,871 520,825
--------- --------- ---------
1,066,914 885,795 1,479,278
CREDITORS:
Amounts falling due within one year 9 877,817 744,185 1,242,790
--------- --------- ---------
NET CURRENT ASSETS 189,097 141,610 236,488
--------- --------- ---------
TOTAL ASSETS LESS CURRENT
LIABILITIES 236,335 228,875 382,221
PROVISION FOR LIABILITIES AND
CHARGES 10 -- 817 1,364
--------- --------- ---------
NET ASSETS 236,335 228,058 380,857
========= ========= =========
CAPITAL AND RESERVES
Called up share capital 11 950 950 1,587
Other reserves 12 200 200 334
Profit and loss account 235,185 226,908 378,936
--------- --------- ---------
EQUITY SHAREHOLDERS' FUNDS 236,335 228,058 380,857
========= ========= =========
</TABLE>

ON BEHALF OF THE BOARD

DR N L EVANS
DIRECTOR

APPROVED BY THE BOARD ON 10 SEPTEMBER 1998

The attached notes form part of these financial statements.

F-43
<PAGE> 137

CAMINUS LIMITED
(FORMERLY CAMINUS ENERGY LIMITED)

CASH FLOW STATEMENTS
FOR THE YEARS ENDED 30 APRIL 1997 AND 30 APRIL 1998
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
1997 1998 1998
-------- -------- ---------
L L US $
<S> <C> <C> <C>
NET CASH INFLOW FROM CONTINUING OPERATING
ACTIVITIES 636,678 533,146 890,354
RETURNS ON INVESTMENTS AND SERVICING OF
FINANCE
Interest received 12,411 17,446 29,135
Taxation (146,836) (128,496) (214,588)
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENTS
Purchase of tangible fixed assets (20,904) (68,536) (114,455)
Equity dividends paid to shareholders (97,733) (572,912) (956,763)
-------- -------- ---------
Net (decrease)/increase in cash 383,616 (219,352) (366,317)
======== ======== =========
RECONCILIATION OF OPERATING PROFIT TO NET
CASH INFLOW FROM OPERATING ACTIVITIES:
Operating profit 442,291 626,680 1,046,555
Depreciation 19,874 28,509 47,610
(Increase) in work in progress -- (9,483) (15,837)
(Increase) in trade debtors (98,858) (9,456) (15,792)
(Increase) in other debtors (5,653) (19,294) (32,221)
Increase in trade creditors 12,287 49,378 82,461
(Decrease)/increase in other creditors 266,737 (133,188) (222,422)
-------- -------- ---------
Net cash inflow from operating activities 636,678 533,146 890,354
======== ======== =========
RECONCILIATION TO NET FUNDS
(Decrease)/increase in net cash 383,616 (219,352) (366,317)
Net funds at beginning of year 147,607 531,223 887,142
-------- -------- ---------
Net funds at end of year 531,223 311,871 520,825
======== ======== =========
</TABLE>

F-44
<PAGE> 138

CAMINUS LIMITED
(FORMERLY CAMINUS ENERGY LIMITED)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED 30 APRIL 1997 AND 30 APRIL 1998
- --------------------------------------------------------------------------------

1. PRINCIPAL ACCOUNTING POLICIES

ACCOUNTING CONVENTION

The financial statements have been prepared under the historical cost
convention.

The financial statements were prepared in accordance with accounting principles
generally accepted in the United Kingdom, the application of which by Caminus
Limited does not differ materially from accounting principles generally accepted
in the United States, except in respect of the presentation of cash flow
information, as detailed in note 14 to the financial statements.

TURNOVER

Turnover represents amounts received, excluding Value Added Tax, for services
supplied during the year. Turnover is recognized as services are rendered.

DEPRECIATION

Depreciation is calculated to write off tangible fixed assets over their
estimated useful lives by equal annual installments at the following rates:

Computers -- 33% of cost per annum
Equipment, furniture and fittings -- 20% of cost per annum

DEFERRED TAXATION

Deferred taxation is provided in respect of all material timing differences.

PENSION COSTS

The Company's pension obligations are covered by contributions to personal
pension plans for individual employees. Contributions are written off to the
profit and loss account in the year in which they are paid.

F-45
<PAGE> 139
CAMINUS LIMITED
(FORMERLY CAMINUS ENERGY LIMITED)

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEARS ENDED 30 APRIL 1997 AND 30 APRIL 1998
- --------------------------------------------------------------------------------

2. TURNOVER

The turnover is all attributable to the company's principal activity.

<TABLE>
<CAPTION>
1997 1998
--------- ---------
L L
<S> <C> <C>
Analysis of turnover by geographical area:
United Kingdom 1,626,384 1,945,317
Rest of Europe, USA and Japan 433,503 571,262
--------- ---------
2,059,887 2,516,579
========= =========
</TABLE>

3. OPERATING PROFIT

<TABLE>
<CAPTION>
1997 1998
--------- ---------
L L
<S> <C> <C>
Operating profit is stated after charging:
Staff costs (note 4) 1,347,017 1,468,565
Depreciation 19,874 28,509
Auditors' renumeration 1,200 1,200
</TABLE>

4. STAFF COSTS

<TABLE>
<CAPTION>
1997 1998
--------- ---------
L L
<S> <C> <C>
Staff costs comprise the following:
Wages and salaries 576,517 870,057
Bonuses 587,552 355,376
Social security costs 117,785 122,437
Other pension costs 65,163 75,695
Compensation for loss of office -- 45,000
--------- ---------
1,347,017 1,468,565
========= =========
</TABLE>

F-46
<PAGE> 140
CAMINUS LIMITED
(FORMERLY CAMINUS ENERGY LIMITED)

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEARS ENDED 30 APRIL 1997 AND 30 APRIL 1998
- --------------------------------------------------------------------------------

The average number of persons, including directors, employed during the year
was:

<TABLE>
<CAPTION>
1997 1998
------ ------
NUMBER NUMBER
<S> <C> <C>
Consulting 16 17
Office and management 4 5
-- --
20 22
== ==
</TABLE>

Staff costs include the following directors' emoluments:

<TABLE>
<CAPTION>
1997 1998
------- -------
L L
<S> <C> <C>
Management remuneration 718,068 615,504
Contributions to money purchase pension schemes, in
respect of three directors 33,676 32,461
Compensation for loss of office -- 45,000
------- -------
751,744 692,965
======= =======
</TABLE>

The remuneration of the highest paid director was as follows:

<TABLE>
<CAPTION>
1997 1998
------- -------
L L
<S> <C> <C>
Management remuneration 263,951 215,970
Contributions to money purchase pension scheme 10,595 7,644
------- -------
274,546 223,614
======= =======
</TABLE>

5. TAX ON PROFIT ON ORDINARY ACTIVITIES

<TABLE>
<CAPTION>
1997 1998
------- -------
L L
<S> <C> <C>
Corporation Tax on the taxable profit at the rate of
27.49% (1997: 27.65%) 126,427 171,468
Deferred taxation -- 817
------- -------
126,427 172,285
======= =======
</TABLE>

F-47
<PAGE> 141
CAMINUS LIMITED
(FORMERLY CAMINUS ENERGY LIMITED)

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEARS ENDED 30 APRIL 1997 AND 30 APRIL 1998
- --------------------------------------------------------------------------------

6. TANGIBLE FIXED ASSETS -- YEAR ENDED 30 APRIL 1997

<TABLE>
<CAPTION>
EQUIPMENT
FURNITURE
COMPUTERS & FITTINGS TOTAL
--------- ---------- -------
L L L
<S> <C> <C> <C>
Cost at beginning of year 90,258 109,875 200,133
Additions 15,739 5,165 20,904
------- ------- -------
Cost at end of year 105,997 115,040 221,037
------- ------- -------
Accumulated depreciation at beginning of
year 61,594 92,531 154,125
Charge for year 14,077 5,797 19,874
------- ------- -------
Accumulated depreciation at end of year 75,671 98,328 173,999
------- ------- -------
Net book value at end of year 30,326 16,712 47,038
======= ======= =======
Net book value at beginning of year 28,664 17,344 46,008
======= ======= =======
</TABLE>

6. TANGIBLE FIXED ASSETS -- YEAR ENDED 30 APRIL 1998

<TABLE>
<CAPTION>
EQUIPMENT
FURNITURE
COMPUTERS & FITTINGS TOTAL
--------- ---------- -------
L L L
<S> <C> <C> <C>
Cost at beginning of year 105,997 115,040 221,037
Additions 26,357 42,179 68,536
Disposals (5,206) -- (5,206)
------- ------- -------
Cost at end of year 127,148 157,219 284,367
------- ------- -------
Accumulated depreciation at beginning of
year 75,671 98,328 173,999
Charge for year 18,952 9,557 28,509
Disposals (5,206) -- (5,206)
------- ------- -------
Accumulated depreciation at end of year 89,417 107,885 197,302
------- ------- -------
Net book value at end of year 37,731 49,334 87,065
======= ======= =======
Net book value at beginning of year 30,326 16,712 47,038
======= ======= =======
</TABLE>

F-48
<PAGE> 142
CAMINUS LIMITED
(FORMERLY CAMINUS ENERGY LIMITED)

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEARS ENDED 30 APRIL 1997 AND 30 APRIL 1998
- --------------------------------------------------------------------------------

7. INVESTMENTS IN SUBSIDIARY COMPANIES

<TABLE>
<CAPTION>
1997 1998
---- ----
L L
<S> <C> <C>
Wholly owned:
Caminus Consultants Limited:
100 ordinary shares of L1 each at cost 100 100
Caminus Limited:
100 ordinary shares of L1 each at cost 100 100
--- ---
200 200
=== ===
</TABLE>

The above Companies, registered in England, have not traded since their
incorporation and have not therefore been consolidated as the amount involved is
not material.

8. DEBTORS

<TABLE>
<CAPTION>
1997 1998
------- -------
L L
<S> <C> <C>
Due within one year:
Trade debtors 500,877 510,333
Prepayments and accrued income 34,814 54,108
------- -------
535,691 564,441
======= =======
</TABLE>

9. CREDITORS

<TABLE>
<CAPTION>
1997 1998
------- -------
L L
<S> <C> <C>
Amounts falling due within one year:
Trade creditors 18,976 68,354
Corporation Tax 25,179 51,437
Advance Corporation Tax payable 76,815 93,529
Other taxes and social security costs 256,861 229,984
Other creditors 206 200
Accruals and deferred income 7,522 47,150
Amounts owed to directors 492,258 253,531
------- -------
877,817 744,185
======= =======
</TABLE>

F-49
<PAGE> 143
CAMINUS LIMITED
(FORMERLY CAMINUS ENERGY LIMITED)

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEARS ENDED 30 APRIL 1997 AND 30 APRIL 1998
- --------------------------------------------------------------------------------

10. PROVISION FOR LIABILITIES AND CHARGES

<TABLE>
<CAPTION>
1997 1998
---- ----
L L
<S> <C> <C>
Provision for deferred taxation at beginning of year -- --
Charge for the year -- 817
--- ---
Provision at end of year -- 817
=== ===
The provision for deferred taxation is made up as follows:
On accelerated capital allowances -- 817
=== ===
-- 817
=== ===
</TABLE>

11. SHARE CAPITAL

<TABLE>
<CAPTION>
1997 1998
----- -----
L L
<S> <C> <C>
Authorised:
5,000 ordinary shares of L1 each 5,000 5,000
===== =====
Allotted, issued and fully paid:
950 ordinary shares of L1 each 950 950
===== =====
</TABLE>

12. OTHER RESERVES

<TABLE>
<CAPTION>
1997 1998
---- ----
L L
<S> <C> <C>
Capital redemption reserve, representing a transfer from
distributable reserves in respect of the Company's purchase
of its own shares 200 200
=== ===
</TABLE>

13. FINANCIAL COMMITMENTS

Commitments for rentals payable under operating leases in the year to 30 April
1999 are as follows:

<TABLE>
<CAPTION>
LAND AND
BUILDINGS
---------
L
<S> <C> <C>
Leases expiring after more than five years 70,000
=========
</TABLE>

F-50
<PAGE> 144
CAMINUS LIMITED
(FORMERLY CAMINUS ENERGY LIMITED)

NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
FOR THE YEARS ENDED 30 APRIL 1997 AND 30 APRIL 1998
- --------------------------------------------------------------------------------

14. SUMMARY OF DIFFERENCES BETWEEN UK AND US GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES ("GAAP")

These financial statements have been prepared in accordance with accounting
principles generally accepted in the United Kingdom ("UK GAAP"). Such
principles, as applied by Caminus Limited, do not differ materially from
accounting principles generally accepted in the United States ("US GAAP").

(a) Cash flow statement

The cash flow statement has been prepared under UK GAAP in accordance with FRS 1
revised and presents substantially the same information as required under SFAS
95. There are certain differences between FRS 1 revised and SFAS 95 with regard
to the classification of items within the cash flow statement.

In accordance with FRS 1 revised, cash flows are presented separately for
operating activities, returns on investments and servicing of finance, taxation,
capital expenditure and financial investment, acquisitions and disposals, equity
dividends paid, management of liquid resources and financing. Under SFAS 95 cash
flows are classified under operating activities, investing activities and
financing activities.

A summary of the company's cash flows from operating, investing and financing
activities, classified in accordance with SFAS 95 is presented below.

<TABLE>
<CAPTION>
1997 1998 1998
-------- -------- --------
L L US $
<S> <C> <C> <C>
Net cash provided by operating activities 502,253 422,096 704,901
Net cash used in investing activities (20,904) (68,536) (114,455)
Net cash used in financing activities (97,733) (572,912) (956,763)
-------- -------- --------
Net (decrease)/increase in cash at bank and 383,616 (219,352) (366,317)
in hand
Cash at bank and in hand at beginning of 147,607 531,223 887,142
year
-------- -------- --------
Cash at bank and in hand at end of year 531,223 311,871 520,825
======== ======== ========
</TABLE>

(b) United States Dollar Equivalent Data

The United States Dollar equivalent data presented in these financial statements
is included for information only. It does not, and is not meant to, reflect the
financial statements had they been translated in accordance with United States
Generally Accepted Accounting Principles. The exchange rate used for this
presentation was L1 sterling to US $1.67. This rate was arrived at by using the
closing inter-bank rate on 30 April 1998.

15. ULTIMATE PARENT COMPANY

On 12 May 1998 the Company was acquired by, and became a wholly owned subsidiary
of, GFI Caminus LLC, trading as Caminus Energy Ventures, registered in Delaware,
USA.

F-51
<PAGE> 145

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
of DC Systems, Inc:

In our opinion, the accompanying consolidated balance sheets and related
consolidated statements of operations, shareholder's deficit and cash flows
present fairly in all material respects, the financial position of DC Systems,
Inc. and its subsidiary at December 31, 1997 and 1998, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

PRICEWATERHOUSECOOPERS LLP
Dallas, Texas
October 5, 1999

F-52
<PAGE> 146

DC SYSTEMS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------ JUNE 30,
1997 1998 1999
--------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................ $ -- $ 24,907 $ 304,131
Accounts receivable.................................. 198,881 227,948 25,930
Deferred contract development cost................... 14,734 483,908 814,649
Prepaid expenses and other current assets............ 26,911 30,134 31,345
--------- ----------- -----------
Total current assets.............................. 240,526 766,897 1,176,055
Fixed assets, net...................................... 84,463 122,459 124,313
Deferred contract development cost..................... 190,086 78,216 --
Software development costs, net........................ 23,970 12,464 6,711
Deposits and other assets.............................. 10,603 10,603 12,800
--------- ----------- -----------
Total assets................................. $ 549,648 $ 990,639 $ 1,319,879
========= =========== ===========
LIABILITIES AND SHAREHOLDER'S DEFICIT
Current liabilities:
Book overdraft....................................... $ 35,856 $ -- $ --
Accounts payable and accrued liabilities............. 159,741 217,533 167,500
Deferred contract development revenue................ 173,834 1,435,282 2,363,964
Capitalized lease obligation, current................ 7,758 13,288 13,968
Related party notes payable, current................. 69,280 28,171 29,609
--------- ----------- -----------
Total current liabilities......................... 446,469 1,694,274 2,575,041
Deferred contract development revenue.................. 433,317 99,186 --
Capitalized lease obligation........................... 17,211 14,458 7,299
Related party notes payable............................ -- 33,858 18,684
--------- ----------- -----------
Total liabilities................................. 896,997 1,841,776 2,601,024
Commitments and contingencies
Shareholder's deficit:
Common stock, $1 par value, 100,000 shares
authorized, 1,000 shares issued and outstanding... 1,000 1,000 1,000
Additional paid in capital........................... 543,000 1,074,064 6,096,843
Accumulated deficit.................................. (856,259) (1,876,397) (7,378,988)
--------- ----------- -----------
(312,259) (801,333) (1,281,145)
Less -- related party advances....................... (35,090) (49,804) --
Total shareholders deficit........................ (347,349) (851,137) (1,281,145)
--------- ----------- -----------
Total liabilities and shareholder's deficit....... $ 549,648 $ 990,639 $ 1,319,879
========= =========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-53
<PAGE> 147

DC SYSTEMS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
----------------------- -------------------------
1997 1998 1998 1999
---------- ---------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues:
License and software
enhancements................... $ 603,166 $ 320,650 $ 30,000 $ 41,000
Software services............ 640,654 521,968 205,837 253,943
---------- ---------- --------- -----------
Total revenues............ 1,243,820 842,618 235,837 294,943
Costs of revenues:
Costs of software
enhancements.............. 115,837 42,328 5,753 5,753
Costs of software services... 358,505 505,080 264,990 228,491
---------- ---------- --------- -----------
Total costs of revenues... 474,342 547,408 270,743 234,244
---------- ---------- --------- -----------
Gross profit (loss)............ 769,478 295,210 (34,906) 60,699
---------- ---------- --------- -----------
Operating expenses:
Research and development..... 70,922 64,048 46,067 15,731
Selling and marketing........ 228,557 224,821 125,643 104,741
General and administrative... 373,333 354,370 185,463 225,890
Equity participation
compensation.............. 139,505 531,064 270,639 5,022,779
---------- ---------- --------- -----------
Total operating
expenses................ 812,317 1,174,303 627,812 5,369,141
---------- ---------- --------- -----------
Operating loss................. (42,839) (879,093) (662,718) (5,308,442)
Interest expense............... 3,358 22,967 17,850 4,072
---------- ---------- --------- -----------
Net loss....................... $ (46,197) $ (902,060) $(680,568) $(5,312,514)
========== ========== ========= ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-54
<PAGE> 148

DC SYSTEMS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S DEFICIT

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL REPURCHASED TOTAL
--------------- PAID-IN (ACCUMULATED RELATED PARTY EQUITY SHAREHOLDER'S
SHARES AMOUNT CAPITAL DEFICIT) ADVANCE INTEREST DEFICIT
------ ------ ---------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1996..................... 1,000 $1,000 $ 253,495 $ (644,562) $(33,515) $ -- $ (423,582)
Net loss................... -- -- -- (46,197) -- -- (46,197)
Capital contribution....... -- -- 150,000 -- -- -- 150,000
Related party advances..... -- -- -- -- (1,575) -- (1,575)
Equity participation
compensation............. -- -- 139,505 -- -- -- 139,505
Distributions.............. -- -- -- (165,500) -- -- (165,500)
----- ------ ---------- ----------- -------- -------- -----------
Balance, December 31,
1997..................... 1,000 1,000 543,000 (856,259) (35,090) -- (347,349)
Net loss................... -- -- -- (902,060) -- -- (902,060)
Repurchased equity
interest................. (60) -- -- -- -- (90,000) (90,000)
Reissued equity interest... 60 -- -- (90,000) -- 90,000 --
Related party advances..... -- -- -- -- (14,714) -- (14,714)
Equity participation
compensation............. -- -- 531,064 -- -- -- 531,064
Distributions.............. -- -- -- (28,078) -- -- (28,078)
----- ------ ---------- ----------- -------- -------- -----------
Balance, December 31,
1998..................... 1,000 1,000 1,074,064 (1,876,397) (49,804) -- (851,137)
Net loss (unaudited)....... -- -- -- (5,312,514) -- -- (5,312,514)
Related party repayments
(unaudited).............. -- -- -- -- 49,804 -- 49,804
Equity participation
compensation
(unaudited).............. -- -- 5,022,779 -- -- -- 5,022,779
Distributions
(unaudited).............. -- -- -- (190,077) -- -- (190,077)
----- ------ ---------- ----------- -------- -------- -----------
Balance, June 30, 1999
(unaudited).............. 1,000 $1,000 $6,096,843 $(7,378,988) $ -- $ -- $(1,281,145)
----- ------ ---------- ----------- -------- -------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-55
<PAGE> 149

DC SYSTEMS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
----------------------- --------------------------
1997 1998 1998 1999
--------- ---------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss.............................................. $(46,197) $(902,060) $(680,568) $(5,312,514)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization..................... 34,562 69,320 32,780 36,925
Equity participation compensation................. 139,505 531,064 270,639 5,022,779
Changes in operating assets and liabilities:
Accounts receivable............................ (172,645) (29,067) 198,881 202,018
Prepaid expenses and other current assets...... (6,853) (3,223) 9,015 (1,211)
Accounts payable and accrued liabilities....... 52,042 57,792 9,373 (50,033)
Deferred contract development cost............. (175,133) (357,304) (160,304) (252,525)
Deferred contract development revenues......... 115,068 927,317 592,014 829,496
Deposits and other assets...................... (7,197) -- -- (2,197)
-------- --------- --------- -----------
Net cash provided by (used in) operating
activities..................................... (66,848) 293,839 271,830 472,738
Cash flows from investing activities:
Purchases of fixed assets........................... (43,231) (81,330) (51,969) (33,026)
Additions to software development costs............. (11,152) -- -- --
-------- --------- --------- -----------
Net cash used in investing activities............. (54,383) (81,330) (51,969) (33,026)
Cash flows from financing activities:
Related party advances (repayments), net............ (1,575) (14,714) (13,534) --
Payments on related party notes payable............. (43,220) (92,751) (37,458) (13,736)
Payments on capital lease obligation................ (1,788) (11,703) (5,538) (6,479)
Capital contribution................................ 150,000 -- -- --
Distributions....................................... (53,000) (28,078) (28,078) (140,273)
Book overdrafts..................................... 35,856 (35,856) (35,856) --
Repurchased equity interest......................... -- (4,500) (4,500) --
-------- --------- --------- -----------
Net cash provided by (used in) financing
activities..................................... 86,273 (187,602) (124,964) (160,488)
Net increase (decrease) in cash and cash
equivalents......................................... (34,958) 24,907 94,897 279,224
Cash and cash equivalents at beginning of period...... 34,958 -- -- 24,907
-------- --------- --------- -----------
Cash and cash equivalents at end of period............ $ -- $ 24,907 $ 94,897 $ 304,131
======== ========= ========= ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-56
<PAGE> 150

DC SYSTEMS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION

DC Systems, Inc. ("DCS" or the "Company"), was incorporated in Texas on May
8, 1989 and initially provided software design consulting services for oil and
gas transmission companies. During the period 1993 through 1996, the Company
developed Gas*Master, a natural gas information system. DCS commenced marketing
the software in 1996 throughout North America to natural gas suppliers,
marketers and consumer utilities.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated unaudited financial statements at June 30, 1999 and for
the six-month period then ended include the accounts of DCS and its wholly-owned
subsidiary, DCS Gas*Net Corporation, which was incorporated on January 7, 1999.
All intercompany transactions and balances have been eliminated upon
consolidation.

CASH EQUIVALENTS

Cash equivalents consist of short-term, highly liquid investments with
original maturities of three months or less.

ACCOUNTS RECEIVABLE

The Company periodically reviews accounts receivable for collectibility and
provides for an allowance for doubtful accounts to the extent that amounts are
not expected to be collected. There was no allowance for doubtful accounts at
December 31, 1997, 1998 or June 30, 1999.

SOFTWARE DEVELOPMENT COSTS

The Company has capitalized software development costs in compliance with
Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting for the
Costs of Computer Software to be Sold, Leased, or Otherwise Marketed." Research
and development costs incurred prior to the establishment of the technological
feasibility of a software product are expensed as incurred. Capitalization of
software development costs begins upon establishment of technological
feasibility of the product. After technological feasibility is established,
material software development costs, which include salaries and related payroll
costs incurred in the development activities, are capitalized.

Except for initial enhancements to make the software more marketable to a
broader base of customers in 1996 and early 1997, the Company has made all
significant changes and improvements to the software under customer contracts.

F-57
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DC SYSTEMS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

To date, the period between achieving technological feasibility, which the
Company has defined as establishment of a working model which typically occurs
when beta testing commences, and the general release of such software has been
relatively short, and software development costs qualifying for capitalization
have been insignificant. The capitalized costs are amortized on a straight-line
basis over the estimated product life, or on the ratio of current revenues to
total projected product revenues, whichever is greater. Generally, such deferred
costs are amortized over three years. Amortization expense, which is included in
costs of software services, was $10,547, $11,506 and $5,753 for years ended
December 31, 1997 and 1998 and the six-month period ended June 30, 1999,
respectively.

FIXED ASSETS

Fixed assets are recorded at cost. Depreciation and amortization are
calculated using the straight-line method over the estimated useful life of the
related asset which generally ranges from three to five years. Amortization of
assets recorded under capital leases is included in depreciation expense.

INCOME TAXES

The Company has elected to be taxed as an S corporation as allowed by the
Internal Revenue Code. Pursuant to this election, income of the Company is
included in the taxable income of the individual shareholders. It is
management's intention to pay distributions to shareholders as necessary to
satisfy any tax liability generated by the Company's earnings.

USE OF ESTIMATES

The accompanying financial statements are prepared in accordance with
generally accepted accounting principles, which require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

CREDIT RISK

The Company typically contracts to receive license and software
modification, enhancement and annual maintenance fees in advance or as the work
is performed. In addition, most of the Company's customers are large natural gas
transmission or utility companies located throughout North America. Accordingly,
the Company does not require collateral and credit losses have been and are
anticipated to continue to be nominal.

F-58
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DC SYSTEMS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist primarily of cash and cash
equivalents, accounts receivable, accounts payable, accrued liabilities and
notes payable. The current carrying amount of these instruments approximates
fair market value due to the relatively short period of time to maturity for
these instruments.

ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company uses the intrinsic value-based method of accounting for all of
its employee stock-based compensation plans. Equity participation compensation
expense associated with stock-based compensation is recognized over the vesting
period of the individual award consistent with the method described in Financial
Accounting Standards Board (FASB) Interpretation No. 28.

REVENUE RECOGNITION

The Company generates revenue from several sources, including licensing of
its software products, performing services related to the implementation,
training and support of these products. The Company has adopted the provisions
of Statements of Position (SOP) 97-2, "Software Revenue Recognition", SOP 98-4,
"Deferral of the Effective Date of Certain Provisions of SOP 97-2", and SOP
98-9, "Modifications of SOP 97-2, Software Revenue Recognition".

SOP 97-2 generally requires revenue earned on software arrangements
involving multiple elements to be allocated to each element based on the
relative fair value of the elements. License and software enhancements revenue
allocated to software products is recognized upon the execution of a license
agreement, when the licensed product has been delivered, fees are fixed and
determinable, collectibility is probable, and when all other significant
obligations have been fulfilled. For license agreements in which customer
acceptance is a condition to earning the license and enhancement fees, revenue
is not recognized until acceptance occurs. Revenue allocated to maintenance is
recognized ratably over the maintenance term and revenue allocated to training
and other service elements is recognized as the services are performed. This
treatment results in deferred revenues and associated costs at each balance
sheet date.

The Company provides its software to customers under long-term development
arrangements as typical customer applications can require significant
modification to adapt the software to the unique specifications of the customer.
If the service elements are considered essential to the functionality of the
software products, both the software product revenue and service revenue are
recognized using the completed contract method as prescribed in accordance with
the provisions of SOP 81-1, "Accounting for Performance of Construction Type and
Certain Production Type Contracts." Accordingly, license and software
enhancement revenue is recognized under the completed contract method when all
development, testing and installation is completed and the purchaser formally
accepts the

F-59
<PAGE> 153
DC SYSTEMS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

software. Costs associated with these contracts are deferred until contract
completion. These license and software enhancement revenues and costs represent
the majority of the deferred balances at each period end. Costs of software
enhancements include the direct labor component of programmer and consultant
cost to perform the software enhancement or service as well as the prorated
share of technical support and overhead costs associated with the enhancement
and services. Anticipated losses, if any, on uncompleted contracts are
recognized in the period in which such losses are determined. Selling, general
and administrative costs are charged to expense as incurred.

Software services revenues include consulting services for installation,
data conversion, training and product support services related to the use of the
Company's licensed products. Customers often enter into arrangements for these
services concurrent with the execution of license agreements. The services do
not require significant modification of the licensed products, are not essential
to their functionality and are available from other vendors. Payment obligations
with respect to the licensed products are not dependent upon the performance of
these services. Accordingly, the Company recognizes revenues for these services
as they are performed. Maintenance and support revenues associated with new
product licenses and renewals, where vendor-specific objective evidence of fair
value exists, deferred and recognized ratably over the contract period.

UNAUDITED INTERIM FINANCIAL DATA

The accompanying unaudited interim financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. In the opinion of management, the accompanying unaudited
financial statements have been prepared on the same basis as the audited
financial statements, and include all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the Company's
financial position as of June 30, 1999 and the results of its operations and its
cash flows for the six months ended June 30, 1998 and 1999.

F-60
<PAGE> 154
DC SYSTEMS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. FIXED ASSETS

Furniture, fixtures and equipment consisted of the following:

<TABLE>
<CAPTION>
ESTIMATED DECEMBER 31, JUNE 30,
USEFUL LIFE -------------------- -----------
IN YEARS 1997 1998 1999
----------- -------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Computer equipment and
software............... 3-4 $ 81,151 $ 159,762 $ 198,420
Office furniture and
fixtures................. 5 13,642 30,841 26,209
Automobiles.............. 3 33,541 33,541 33,541
-------- --------- ---------
128,334 224,144 258,170
Less: accumulated
depreciation........... (43,871) (101,685) (133,857)
-------- --------- ---------
$ 84,463 $ 122,459 $ 124,313
======== ========= =========
</TABLE>

Depreciation expense amounted to $24,015, $57,814, $27,027 and $31,172 for
1997 and 1998 and for the six months ended June 30, 1998 and 1999, respectively.

4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
-------------------- -----------
1997 1998 1999
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Accrued retirement plan
contributions.................. $ 44,914 $ 26,184 $ 6,953
Payroll taxes payable............ 32,044 61,878 --
Sales taxes payable.............. 71,930 112,750 157,719
Other accounts payable and
accrued liabilities............ 10,853 16,721 2,828
-------- -------- --------
$159,741 $217,533 $167,500
======== ======== ========
</TABLE>

5. RELATED PARTY ADVANCES RECEIVABLE AND NOTES PAYABLE

During 1997, 1998 and the six months ended June 30, 1999, the Company made
advances to and collected receivables from its shareholder for various purposes.
Balances from these transactions are reflected in shareholder's deficit
accompanying balance sheets.

F-61
<PAGE> 155
DC SYSTEMS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In June 1997, the Company executed a $112,500 note payable to its principal
shareholder for distributions. The note bears interest at 6% annually, with
weekly installments of $1,500 until the full amount including interest is paid
in full. This loan was repaid in 1998.

On June 30, 1998, the Company repurchased 6% beneficial ownership interest
from an existing beneficial owner for $90,000. This transfer was made effective
January 1, 1998. The purchase price comprised $4,500 payable in cash plus the
Company's note payable in the amount of $85,500. The note bears interest at 10%
annually, payable in installments of $2,759 over 36 months.

Related party notes payable comprised the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------------ -----------
1997 1998 1999
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Note payable to shareholder........ $69,280 $ -- $ --
Note payable to beneficial owner... -- 62,029 48,293
Less -- current portion............ 69,280 28,171 29,609
------- ------- -------
Long-term portion.................. $ -- $33,858 $18,684
======= ======= =======
</TABLE>

Maturities of related party notes payable are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1998 1999
------------ --------
<S> <C> <C>
1999.......................................... $28,171 $14,435
2000.......................................... 31,122 31,122
2001.......................................... 2,736 2,736
------- -------
$62,029 $48,293
======= =======
</TABLE>

6. COMMITMENTS AND CONTINGENCIES

The Company leases computer equipment, and such leases are classified as
capital leases and included in fixed assets as follows:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------------- -----------
1997 1998 1999
------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Computer equipment................ $26,757 $ 41,237 $ 41,237
Less accumulated amortization..... (743) (13,962) (20,835)
------- -------- --------
$26,014 $ 27,275 $ 20,402
======= ======== ========
</TABLE>

F-62
<PAGE> 156
DC SYSTEMS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Certain other leases and the Company's obligation under its lease for
office space are treated as operating leases and the rentals are expensed as
incurred. Rent expense on these operating leases for the years ended December
31, 1997 and 1998 and the six months ended June 30, 1998 and 1999 totaled
$124,400, $142,580, $72,207 and $83,329, respectively. Generally, the Company's
leases provide for renewals for various periods at stipulated rates.

Future minimum lease obligations in effect at December 31, 1998 and June
30, 1999 are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 JUNE 30, 1999
-------------------- --------------------
CAPITAL OPERATING CAPITAL OPERATING
LEASES LEASES LEASES LEASES
-------- --------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C>
1999....................... $ 15,466 $138,172 $ 15,466 $138,172
2000....................... 14,641 136,115 7,515 138,431
2001....................... 607 139,203 -- 139,203
2002....................... -- 92,802 -- 23,200
Thereafter................. -- -- -- --
-------- -------- -------- --------
Minimum lease payments..... 30,714 $506,292 22,981 $439,006
======== ========
Less amount representing
interest................. (2,968) (1,714)
Less current portion....... (13,288) (13,968)
-------- --------
Obligations under capital
leases................... $ 14,458 $ 7,299
======== ========
</TABLE>

From time to time, in the ordinary course of business, the Company is
subject to legal proceedings. While it is not possible to determine the ultimate
outcome of such matters, it is management's opinion that the resolution of any
pending issues will not have a materially adverse effect on the financial
position, results of operations and cash flows of the Company.

7. RETIREMENT PLAN

The Company has a 408(k) plan, as defined by the United States Internal
Revenue Code, which allows participants to contribute a percentage of their
compensation to the retirement plan on a pretax basis. The plan also allows for
discretionary employer contributions. Accrued employer contributions to the plan
amounted to $18,779, $28,956 and $11,063 for 1997, 1998 and the six months ended
June 30, 1999, respectively, and are reflected in general and administrative
expense.

F-63
<PAGE> 157
DC SYSTEMS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. MAJOR CUSTOMERS

Because of the Company's size and the long-term nature of its software
licensing and development service contracts with its customers, a few customers
can comprise a significant percentage of its revenues. In 1997, the Company
earned revenue from approximately 14 customers, with one customer accounting for
45% of the Company's revenue and three other customers accounting for 9% each.
In 1998, the Company earned revenue from approximately 16 customers, with one
customer accounting for 34% of the Company's revenue and two other customers
accounting for 22% each. For the six months ended June 30, 1999, the Company
earned revenue from approximately 14 customers, with one customer accounting for
47%, one customer accounting for 19% and one customer accounting for 15% of the
Company's revenue.

9. COMMON STOCK AND BENEFICIAL OWNERSHIP INTERESTS

DCS was formed in 1989 by the Company's present Chairman and Chief
Executive Officer ("Chairman") who at the time of formation owned 100% of the
issued and outstanding common stock of the Company. The Company's Chairman
granted beneficial ownership interests totaling 28.8% in the Company through
employment and other agreements to three key officers in 1994 and 1995 that
vested in August 1996 (18.8%), March 1997 (5%) and June 1997 (5%). In addition,
the Company's Chairman granted additional beneficial ownership interests that
are forfeitable upon the employee's separation of employment with the Company to
three additional employees in 1997 totaling 6% and to five additional employees
on January 1, 1999 totaling 5%. These beneficial ownership interests have been
treated as full ownership interests as if the Company had issued additional
common stock representing their percentage interest for both book and tax
purposes.

For financial reporting purposes, the Company has recognized equity
participation compensation expense for the beneficial ownership interests earned
by employees of $139,505, $531,064 and $5,022,779 for 1997, 1998 and the six
months ended June 30, 1999, respectively, reflecting the fair market value of
the beneficial ownership interests conveyed.

As described in Note 5, one beneficial owner sold a portion of his interest
(6%) back to the Company effective January 1, 1998 for $90,000. Concurrently,
this ownership interest was redistributed to the other beneficial owners of the
Company.

In March 1996, the Company issued a warrant to a related company to
purchase a 5% interest in the outstanding shares of the Company. This warrant
remained outstanding at December 31, 1997, 1998 and June 30, 1999. On June 9,
1997, the Chairman and the DCS beneficial owners sold its interest in a related
company warrant for $150,000 and contributed the proceeds to DCS.

The Company has historically followed the policy of distributing all of its
taxable income to its beneficial owners in the year following the year of
taxable
F-64
<PAGE> 158
DC SYSTEMS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

income. Distributions amounted to $165,500 in 1997, $28,078 in 1998 and $190,077
during the six months ended June 30, 1999. The 1997 distribution includes a
$112,500 note payable to the Company's Chairman. The distribution for the six
months ended June 30, 1999 includes forgiveness of $49,804 of advances
receivable from the Company's Chairman. An additional distribution was made in
August 1999 as a final adjustment to the distribution of 1998 taxable earnings.
This distribution totaled $27,398 and is not reflected in the accompanying
financial statements.

10. STATEMENT OF CASH FLOWS

Supplemental disclosures of cash flow information including interest paid
and noncash activities are as follows:

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
------------------ -----------------
1997 1998 1998 1999
-------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Interest paid................ $ 3,358 $22,967 $14,460 $ 4,072
Noncash investing activities:
Capital lease obligation... $ 26,757 $14,480 $14,480 $ --
Noncash financing activities:
Capital lease obligation... $ 26,757 $14,480 $14,480 $ --
Equity interest repurchased
with note payable....... $ -- $85,500 $85,500 $ --
Reissued equity interest... $ -- $90,000 $90,000 $ --
Related party advances
receivable from prior
period repaid through
distributions........... $ -- $ -- $ -- $49,804
Distribution financed with
note payable............ $112,500 $ -- $ -- $ --
</TABLE>

11. SALE OF EQUITY INTEREST

Effective July 31, 1999, the Company's shareholder and all beneficial
equity interest owners and the warrant holder sold all their equity interests in
the Company to Caminus LLC for $13 million and an obligation to pay the
shareholder and each beneficial equity interest owner of DCS 40% of the dividend
distribution each beneficial equity owner would have otherwise received had a
distribution of DCS' taxable income for the seven months ended July 31, 1999
occurred. Concurrently, the Company's S corporation status was terminated.

F-65
<PAGE> 159

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
AND THE NINE MONTHS ENDED SEPTEMBER 30, 1999

The following unaudited pro forma condensed consolidated statements of
operations for the year ended December 31, 1998 and the nine months ended
September 30, 1999 give effect to acquisitions by Caminus of Zai*Net Software,
L.P. ("Zai*Net") and Caminus Energy Limited ("CEL") on May 12, 1998, Positron
Energy Consulting ("Positron") on November 13, 1998 and DC Systems, Inc. ("DCS")
on July 31, 1999. The unaudited pro forma condensed consolidated statements of
operations assume the acquisitions had occurred on January 1, 1998, except for
Positron which is included in the pro forma results of operations from November
13, 1998. The unaudited pro forma condensed consolidated statement of operations
for the year ended December 31, 1998 is based on the historical audited
consolidated statement of operations of Caminus for the period from Inception
(April 29, 1998) through December 31, 1998, which includes the results of
Zai*Net and CEL from May 12, 1998 and Positron from November 13, 1998 as well as
the historical audited statement of operations of Zai*Net for the period from
January 1, 1998 through April 30, 1998 and the unaudited statements of
operations of CEL for the period from January 1, 1998 through April 30, 1998.
The unaudited pro forma statement of operations for the year ended December 31,
1998 does not include the historical unaudited results of Positron from January
1, 1998 through November 12, 1998 as the amounts were not considered significant
in relation to the unaudited combined pro forma results of operations taken as a
whole. The unaudited pro forma statement of operations for the nine months ended
September 30, 1999 is based on the historical unaudited statement of operations
of Caminus as well as the statement of operations of DCS for the period from
January 1, 1999 through July 31, 1999. The unaudited pro forma condensed
consolidated financial statements reflect the purchase method of accounting and
the adjustments and assumptions described in the accompanying notes. There is no
requirement for any unaudited pro forma balance sheet since all the acquisitions
are reflected in the historical unaudited consolidated balance sheet of Caminus
at September 30, 1999.

The pro forma adjustments are based upon fair values of the acquired
companies at the time of their acquisition, as used in Caminus' purchase
accounting for these acquisitions. The unaudited pro forma condensed
consolidated statements of operations should be read in conjunction with the
respective audited and unaudited financial statements of the respective
companies appearing elsewhere in this Prospectus. The pro forma results are not
necessarily indicative of future results or the results that actually would have
occurred if the acquisitions had taken place on January 1, 1998.

F-66
<PAGE> 160

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
ZAI*NET(B) CAMINUS DC PRO FORMA PRO FORMA
CAMINUS(A) (PREDECESSOR) ENERGY LTD(B) SYSTEMS, INC.(C) ADJUSTMENTS CAMINUS
------------ ------------- -------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenue:
Licenses...................... $ 3,639,143 $1,495,221 $ -- $ 320,650 $ -- $ 5,455,014
Software services............. 3,090,758 1,334,473 -- 521,968 -- 4,947,199
Strategic consulting.......... 2,896,102 -- 1,457,994 -- 4,354,096
------------ ---------- ---------- ---------- ----------- ------------
Total revenue............... 9,626,003 2,829,694 1,457,994 842,618 -- 14,756,309
------------ ---------- ---------- ---------- ----------- ------------
Gross profit.................... 4,940,985 2,095,452 795,336 295,210 -- 8,126,983
Operating expenses:
Research and development...... 1,153,470 580,031 -- 64,048 -- 1,797,549
Selling, general and
administrative.............. 3,601,116 1,079,391 431,429 579,191 -- 5,691,127
DCS equity participation
compensation................ -- -- -- 531,064 -- 531,064
Acquired in-process research
and development............. 4,822,000 -- -- -- (4,822,000) --
Amortization of intangibles... 5,497,765 -- -- -- 7,882,256 13,380,021
------------ ---------- ---------- ---------- ----------- ------------
Total operating expenses.... 15,074,351 1,659,422 431,429 1,174,303 3,060,256 21,399,761
------------ ---------- ---------- ---------- ----------- ------------
Operating income (loss)......... (10,133,366) 436,030 363,907 (879,093) (3,060,256) (13,272,778)
------------ ---------- ---------- ---------- ----------- ------------
Other income (expense), net..... 96,909 8,294 37,873 (22,967) -- 120,109
Provision for income taxes...... 35,735 23,816 107,464 -- -- 167,015
------------ ---------- ---------- ---------- ----------- ------------
Income (loss) before minority
interest...................... (10,072,192) 420,508 294,316 (902,060) (3,060,256) (13,319,684)
Minority interest............... (298,996) -- -- -- 298,996 --
Net income (loss)............... $(10,371,188) $ 420,508 $ 294,316 $ (902,060) $(2,761,260) $(13,319,684)
============ ========== ========== ========== =========== ============
Basic and diluted net loss per
share......................... $(1.41) -- -- -- -- $(1.76)
Weighted average common
shares -- basic and diluted... 7,360,634 -- -- -- -- 7,578,987
</TABLE>

- -------------------------

Periods included:

(a) Inception (April 29, 1998) through December 31, 1998

(b) Four months ended April 30, 1998

See accompanying notes to the unaudited pro forma financial statements
F-67
<PAGE> 161

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999

<TABLE>
<CAPTION>
DC PRO FORMA PRO FORMA
CAMINUS(A) SYSTEMS, INC.(B) ADJUSTMENTS CAMINUS
----------- ---------------- ----------- ------------
<S> <C> <C> <C> <C>
Statement of Operations Data:
Revenue:
Licenses...................... $ 8,088,621 $ 41,000 $ -- $ 8,129,621
Software services............. 5,679,513 301,621 -- 5,981,134
Strategic consulting.......... 4,757,425 -- 4,757,425
----------- ----------- ----------- ------------
Total revenue.............. 18,525,559 342,621 -- 18,868,180
----------- ----------- ----------- ------------
Gross profit.................... 12,673,116 60,699 -- 12,733,815
Operating expenses:
Research and development...... 2,679,726 24,352 -- 2,704,078
Selling, general and
administrative............. 8,700,240 428,167 -- 9,128,407
DCS equity participation
compensation............... -- 5,022,779 -- 5,022,779
Acquired in-process research
and development............ 1,000,000 (1,000,000) --
Amortization of intangibles... 6,074,750 -- 1,647,765 7,722,515
----------- ----------- ----------- ------------
Total operating expenses... 18,454,716 5,475,298 647,765 24,577,779
Operating loss.................. (5,781,600) (5,414,599) (647,765) (11,843,964)
Other expense, net.............. (126,856) (3,477) -- (130,333)
Provision for income taxes...... 334,294 -- -- 334,294
----------- ----------- ----------- ------------
Net loss........................ $(6,242,750) $(5,418,076) $ (647,765) $(12,308,591)
=========== =========== =========== ============
Basic and diluted net loss per
share......................... $(0.76) -- -- $(1.46)
-------- --------
-------- --------
Weighted average common
shares -- basic and diluted... 8,264,075 -- -- 8,405,529
</TABLE>

- -------------------------
Periods included:

(a) Nine months ended September 30, 1999

(b) Seven months ended July 31, 1999

See accompanying notes to the unaudited pro forma financial statements
F-68
<PAGE> 162

NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS

The following facts and assumptions in notes (a) through (d) were used in
determining the pro forma effect of the various acquisitions by Caminus.

a) On May 12, 1998, Caminus acquired a 71% ownership interest in Zai*Net
for $7,740,000 in cash. The terms of the purchase agreement required the payment
of additional consideration totaling $4,375,000 to the former shareholder of
Zai*Net if revenues from certain Zai*Net products were in excess of certain
thresholds defined in the purchase agreement. Payment of this additional
consideration was guaranteed in connection with the acquisition of the remaining
29% interest in Zai*Net by Caminus in December 1998 and was accordingly recorded
as additional purchase price.

On December 31, 1998, Caminus acquired the remaining 29% of Zai*Net for a
21% membership interest in Caminus valued at $10,339,350. Caminus converted all
the outstanding options of Zai*Net into options to acquire shares in Caminus.
The fair value of the converted options and the options granted to GFI in
connection with the formation of the Company and the identification of the
acquired entities was $2,669,534 and was recorded as additional purchase price.
Additionally, the Company incurred $602,969 in combined other direct acquisition
costs.

The acquisition of the 71% and 29% ownership interests in Zai*Net have been
accounted for as a purchase. A summary of the allocation of the combined
purchase price appears below:

<TABLE>
<S> <C>
Tangible net assets acquired..................... $ 899,191
Acquired in-process research and development..... 4,822,000
Developed technology............................. 2,596,000
Other intangible assets.......................... 2,023,000
Goodwill......................................... 15,386,662
-----------
$25,726,853
===========
</TABLE>

The useful lives for the acquired intangible assets range from three to
five years.

The pro forma adjustments for the year ended December 31, 1998 assume an
additional four and twelve months of amortization of intangible assets for the
May 12, 1998 and the December 31, 1998 acquisitions, respectively. This resulted
in additional amortization of $514,703 and $3,815,904 for the May 12, 1998 and
December 31, 1998 acquisitions, respectively. Additionally, the pro forma
adjustment column includes the elimination of the 29% minority interest of
Zai*Net in order to reflect the results of operations as if Caminus had
purchased 100% of Zainet on January 1, 1998. Also, the acquired in-process
research and development charges of $4,822,000 were eliminated via a pro forma
adjustment since this expense is directly attributable to the Zai*Net
acquisition and is not expected to have a continuing impact on the operating
results of Caminus.

F-69
<PAGE> 163
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS -- (CONTINUED)

b) On May 12, 1998, Caminus acquired CEL for $3,022,924 in cash, plus a
membership interest in Caminus valued at $3,000,000. The acquisition of CEL has
been accounted for as a purchase. The excess of purchase price over the tangible
net assets acquired was $6,217,870. The excess purchase price has been recorded
as goodwill and is being amortized over three years.

The pro forma adjustments for the year ended December 31, 1998 assume an
additional four months of goodwill amortization. This resulted in an additional
amortization of $690,874.

c) On November 13, 1998, Caminus acquired Positron for $151,667 in cash.
The acquisition of Positron has been accounted for as a purchase with the excess
of purchase price over tangible net assets acquired being recorded as goodwill.
This resulted in goodwill and other intangible assets of $151,667 with a
four-year useful life.

The pro forma adjustments for the year ended December 31, 1998 assume
additional amortization of $36,032.

d) On July 31, 1999, Caminus acquired DC Systems, Inc for $10,000,000 in
cash, plus membership interests in Caminus valued at $3,000,000. There were
$500,000 of other direct acquisition costs. A summary of the allocation of the
purchase price appears below:

<TABLE>
<S> <C>
Tangible net assets acquired..................... $ (953,706)
Acquired in-process research and development..... 1,000,000
Deferred tax assets.............................. 617,000
Developed technology............................. 1,800,000
Other intangible assets.......................... 3,030,000
Goodwill......................................... 8,623,706
-----------
$13,500,000
===========
</TABLE>

The useful lives for the acquired intangible costs range from three to five
years.

The pro forma adjustments for the year ended December 31, 1998 and the nine
months ended September 30, 1999 assume an additional and twelve and seven months
of amortization of intangible assets, respectively. This resulted in additional
amortization of $2,824,741 and $1,647,765 for the year ended December 31, 1998
and the nine months ended September 30, 1999, respectively. Also, the acquired
in-process research and development charges of $1,000,000 were eliminated via a
pro forma adjustment since this expense is directly attributable to the DC
Systems acquisition and is not expected to have a continuing impact on the
operating results of Caminus.

F-70
<PAGE> 164

YOU MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS
PROSPECTUS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR THE SALE OF THE SHARES
OF COMMON STOCK MEANS THAT INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT
AFTER THE DATE OF THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY THESE SHARES IN ANY CIRCUMSTANCES UNDER WHICH
THE OFFER OR SOLICITATION IS UNLAWFUL.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary................... 3
Risk Factors......................... 8
Special Note Regarding Forward-
Looking Statements................. 19
Caminus Corporation.................. 20
Use of Proceeds...................... 21
Dividend Policy...................... 22
Capitalization....................... 23
Dilution............................. 25
Selected Consolidated Financial
Data............................... 27
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 30
Business............................. 47
Management........................... 66
Certain Transactions................. 76
Principal and Selling Stockholders... 82
Description of Capital Stock......... 85
Shares Eligible for Future Sale...... 87
Underwriting......................... 89
Legal Matters........................ 91
Experts.............................. 92
Where You Can Find More
Information........................ 92
Index to Financial Statements........ F-1
</TABLE>

DEALER PROSPECTUS DELIVERY OBLIGATION: UNTIL , 2000 (25 DAYS AFTER THE
DATE OF THIS PROSPECTUS), ALL DEALERS THAT BUY, SELL OR TRADE IN THESE SHARES OF
COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. DEALERS ARE ALSO OBLIGATED TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

[CAMINUS LOGO]
4,372,000 SHARES

COMMON STOCK

DEUTSCHE BANC ALEX. BROWN

BEAR, STEARNS & CO. INC.

CIBC WORLD MARKETS

PROSPECTUS
, 2000
<PAGE> 165

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses, all of which will be
borne by the Registrant, in connection with the sale and distribution of the
securities being registered, other than the underwriting discounts and
commissions. All amounts shown are estimates except for the Securities and
Exchange Commission registration fee, the NASD filing fee and the Nasdaq
National Market listing fee.

<TABLE>
<S> <C>
SEC registration fee........................................ $ 20,960
NASD filing fee............................................. 8,043
Nasdaq National Market listing fee.......................... 88,500
Blue Sky fees and expenses.................................. 10,000
Transfer Agent and Registrar fees........................... 10,000
Accounting fees and expenses................................ 325,000
Legal fees and expenses..................................... 375,000
Director and Officer Liability Insurance.................... 175,000
Printing and mailing expenses............................... 225,000
Miscellaneous............................................... 87,497
----------
Total.................................................. $1,325,000
==========
</TABLE>

- ---------------

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Article SEVENTH of the Registrant's Certificate of Incorporation provides
that no director of the Registrant shall be personally liable for any monetary
damages for any breach of fiduciary duty as a director, except to the extent
that the Delaware General Corporation Law prohibits the elimination or
limitation of liability of directors for breach of fiduciary duty.

Article EIGHTH of the Registrant's Certificate of Incorporation provides
that a director or officer of the Registrant:

(a) shall be indemnified by the Registrant against all expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement incurred in connection with any litigation or other legal
proceeding (other than an action by or in the right of the Registrant)
brought against him by virtue of his position as a director or officer of
the Registrant if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Registrant,
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful and

(b) shall be indemnified by the Registrant against all expenses
(including attorneys' fees) and amounts paid in settlement incurred in
connection with any action by or in the right of the Registrant brought
against him by virtue of his position as a director or officer of the
Registrant if he acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, the best
II-1
<PAGE> 166

interests of the Registrant, except that no indemnification shall be made
with respect to any matter as to which such person shall have been adjudged
to be liable to the Registrant, unless a court determines that, despite
such adjudication but in view of all of the circumstances, he is entitled
to indemnification of such expenses.

Notwithstanding the foregoing, to the extent that a director or officer has been
successful, on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, he is required to be indemnified by
the Registrant against all expenses (including attorneys' fees) incurred in
connection therewith. Expenses shall be advanced to a director or officer at his
request, provided that he undertakes to repay the amount advanced if it is
ultimately determined that he is not entitled to indemnification for such
expenses.

Indemnification is required to be made unless the Registrant determines
that the applicable standard of conduct required for indemnification has not
been met. In the event of a determination by the Registrant that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent to
the right of indemnification, the director or officer must give the Registrant
notice of the action for which indemnity is sought and the Registrant has the
right to participate in such action or assume the defense thereof.

Article EIGHTH of the Registrant's Certificate of Incorporation further
provides that the indemnification provided therein is not exclusive, and
provides that in the event that the Delaware General Corporation Law is amended
to expand the indemnification permitted to directors or officers the Registrant
must indemnify those persons to the fullest extent permitted by such law as so
amended.

Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.

Under Section 8 of the Underwriting Agreement, the underwriters are
obligated, under certain circumstances, to indemnify directors and officers of
the Registrant against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed as
Exhibit 1 hereto.
II-2
<PAGE> 167

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

CERTAIN SALES OF SECURITIES. Since the formation of its predecessor as a
limited liability company on April 29, 1998, the Registrant or its predecessor
has issued the following securities that were not registered under the
Securities Act, as summarized below.

(a) Issuances of membership interests/capital stock.

1. In May 1998, Caminus LLC issued an aggregate of 76,540,000 shares
of Series A membership interest to certain investors at an aggregate
purchase price of $22,750,000 ($3.12 per share of common stock on an
as-converted basis). 10,093,187 of such shares were issued in connection
with the Registrant's acquisition of Caminus Limited. In December 1998,
Caminus LLC repurchased 18,504,176 shares from SS&C Technologies. The
remaining 58,035,824 shares will convert into an aggregate of 5,527,216
shares of common stock of the Registrant prior to this offering. All of the
investors were accredited investors.

2. In July 1998, Caminus LLC issued an aggregate of 672,879 shares of
Series A membership interest (which will convert into 64,084 shares of
common stock of the Registrant prior to this offering) to an individual at
an aggregate purchase price of $200,000 ($3.12 per share of common stock on
an as-converted basis). Caminus LLC also issued the individual an option to
purchase 1,363,156 shares of Series B membership interest. The individual
investor was an accredited investor.

3. In October 1998, Caminus LLC issued an aggregate of 3,364,396
shares of Series A membership interest (which will convert into an
aggregate of 320,418 shares of common stock of the Registrant prior to this
offering) to an individual at an aggregate purchase price of $1,000,000
($3.12 per share of common stock on an as-converted basis). The individual
investor was an accredited investor.

4. In November 1998, Caminus LLC issued an aggregate of 603,607 shares
of Series A membership interest (which will convert into an aggregate of
57,486 shares of common stock of the Registrant prior to this offering) to
three individuals at an aggregate purchase price of $348,333 in connection
with its acquisition of Positron Energy Consulting. Such number of shares
of membership interest is subject to reduction on the first and second
anniversaries of the purchase of Positron by the Registrant, depending upon
performance criteria, including the successful integration of Positron's
software into the Registrant's operations. One of the individuals was an
accredited investor. The three individuals were responsible for the
operations of Positron and were each involved in the negotiation of the
acquisition and the due diligence review of the Company in connection with
the acquisition. Each person had sufficient access to information about the
Company necessary to make an informed investment decision.

5. In December 1998, Caminus LLC issued an aggregate of 21,579,728
shares of Series A membership interest (which will convert into an
aggregate of 2,055,210 shares of common stock of the Registrant prior to
this offering) at an aggregate purchase price of $10,339,350 to twelve
investors in connection
II-3
<PAGE> 168

with its acquisition of Zai*Net Software, L.P. Nine of these investors were
not accredited investors. In connection with this transaction, each of
these persons had sufficient access to information about the Company
necessary to make an informed decision.

6. In May 1999, Caminus LLC issued an aggregate of 616,287 shares of
Series A membership interest (which will convert into an aggregate of
58,694 shares of common stock of the Registrant prior to this offering) to
five individuals at an aggregate purchase price of $338,938 ($5.78 per
share of common stock on an as-converted basis). None of these investors
was an accredited investor. However, each of these persons was actively
involved in the operations of the Company and had a significant amount of
information regarding the Company, its business and its management. Each
person had access to management of the Company and was afforded sufficient
access to information about the Company necessary to make an informed
investment decision.

7. In July 1999, Caminus LLC issued an aggregate of 10,184,727 shares
of Series A membership interest (which will convert into an aggregate of
969,973 shares of common stock of the Registrant prior to this offering) to
fourteen individuals in connection with a rights offering at an aggregate
purchase price of $12,000,000 ($12.37 per share of common stock on an
as-converted basis). All but five of these investors were accredited. The
five non-accredited investors were all employees of the Company. Each of
these persons was actively involved in the operations of the Company and
had a significant amount of information regarding the Company, its business
and its management. Each person had access to management of the Company and
was afforded sufficient access to information about the Company necessary
to make an informed investment decision.

8. In August 1999, Caminus LLC issued an aggregate of 2,546,181 shares
of Series A membership interest (which will convert into an aggregate of
242,493 shares of common stock of the Registrant prior to this offering) at
an aggregate purchase price of $3,000,000 to twelve recipients in
connection with its acquisition of DC Systems, Inc. Ten of these persons
were not accredited investors. Each of these individuals was an employee of
DC Systems and was provided information about the Company, its business and
its management. Each person had sufficient access to information about the
Company necessary to make an informed investment decision.

(b) Stock option grants to employees.

1. From February 1999 through September 30, 1999, Caminus LLC issued
options (net of cancellations) under its 1998 Stock Option Plan to purchase
an aggregate of 3,374,350 shares of Series B membership interest (which
will convert into options to purchase an aggregate of 321,366 shares of
common stock of the Registrant prior to this offering) at a weighted
average exercise price of $0.75 per share ($7.88 per share of common stock
on an as-converted basis). None of these options has been exercised. These
option grants were made under the Company's 1998 Stock Incentive Plan (the
"Plan"). The Plan is a written compensatory benefit plan and all optionees
are officers or employees who were employed by the Company at the time of
the grant.
II-4
<PAGE> 169

Additionally, the aggregate number of options granted in any consecutive
12-month period did not exceed 15% of the outstanding amount of the class
of securities being issued. Presently, the Company has issued a total of
9,725,715 options for series A membership interests and the outstanding
number of series A membership interests is 97,603,629.

2. As of the closing of this offering, the Registrant will grant
options to purchase an aggregate of 28,572 shares of common stock, each at
an exercise price equal to the initial public offering price. None of these
options has been exercised.

1. In May 1998, Caminus LLC granted an option to an investor to
purchase that number of shares of Series C membership interest which equals
a 10% membership interest in the Registrant. On the grant date, such option
provided for the purchase of 10,000,000 shares of Series C membership
interest. Presently, the option provides for the purchase of 12,996,732
shares of Series C membership interest (which will convert into an option
to purchase 1,237,783 shares of common stock of the Registrant prior to
this offering) at an aggregate exercise price of $4,447,664. Such option
will be exercised on a cashless basis for a net total of 931,411 shares of
the Registrant's common stock. The investor is an accredited investor.

2. In May 1998, Caminus LLC granted options to purchase an aggregate
of 5,050,000 shares of Series B membership interest (which will convert
into options to purchase an aggregate of 480,952 shares of common stock of
the Registrant prior to this offering) at an aggregate exercise price of
$1,500,000 ($3.12 per share of common stock on an as-converted basis) to
certain individuals in connection with its acquisition of Caminus Limited.
Such options will be exercised on a cashless basis for a net total of
360,917 shares of the Registrant's common stock. These individuals are each
an accredited investor.

3. In December 1998, Caminus LLC granted an option to an investor to
purchase 2,909,047 shares of Series B membership interest (which will
convert into an option to purchase 277,052 shares of common stock of the
Registrant prior to this offering) at an aggregate exercise price of
$1,800,000 ($6.50 per share of common stock on an as-converted basis). The
investor is an accredited investor.

No underwriters were involved in any of the foregoing sales of securities.
Such sales were made in reliance upon an exemption from the registration
provisions of the Securities Act set forth in Section 4(2) thereof relative to
sales by an issuer not involving any public offering or the rules and
regulations thereunder, or, in the case of the options to purchase common stock
described in paragraph (b) above, Rule 701 of the Securities Act. All of the
foregoing securities are deemed restricted securities for the purposes of the
Securities Act.

II-5
<PAGE> 170

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
1 Form of Underwriting Agreement.
2.1 Merger Agreement among the Registrant, Caminus LLC and
Caminus Merger LLC, dated December 17, 1999.
2.2*+ Purchase Agreement by and among Zai*Net Software, Inc.,
Zai*Net Software, L.P., GFI Caminus LLC and Brian J.
Scanlan, dated May 12, 1998.
2.3*+ Stock Purchase Agreement by and among GFI Caminus LLC,
Caminus Energy Limited, Dr. Nigel L. Evans, Ph.D. and Dr.
Michael B. Morrison, Ph. D., dated May 12, 1998.
2.4*+ Purchase Agreement by and between Zai*Net Software, L.P. and
Corwin Joy, an individual, doing business as Positron Energy
Consulting, dated November 13, 1998.
2.5*+ Agreement of Merger by and between Caminus LLC and Zai*Net
Software, L.P., dated February 26, 1999.
2.6*+ Purchase Agreement by and among DC Systems, Inc., Caminus
LLC, Caminus/DC Acquisition Corp., and the Shareholders (as
defined in the agreement) dated July 31, 1999.
3.1* Certificate of Incorporation of the Registrant.
3.2* Bylaws of the Registrant.
4* Specimen certificate for shares of Common Stock, $0.01 par
value per share, of the Registrant.
5** Opinion of Hale and Dorr LLP.
10.1* 1998 Stock Incentive Plan.
10.2* 1999 Stock Incentive Plan, including forms of stock option
agreement for incentive and nonstatutory stock options.
10.3*** 1999 Employee Stock Purchase Plan.
10.4* Limited Liability Company Agreement of GFI Caminus LLC,
dated May 12, 1998.
10.5* Assignment and Assumption Agreement by and among Zai*Net
Software, Inc., Zai*Net Software, L.P. and Brian J. Scanlan,
dated May 12, 1998.
10.6* Second Assignment and Assumption Agreement by and between
Zai*Net Software, Inc. and Rooney Software, L.L.C.
10.7* Conversion Agreement and Amendment of Purchase Agreement by
and among Caminus Energy Ventures LLC, Zak Associates, Inc.,
Zai*Net Software, L.P., Brian Scanlan and Rooney Software,
L.L.C., dated December 31, 1998.
10.8* Cooperation Agreement by and between ABB Energy Information
Systems and Caminus LLC, dated July 13, 1999.
10.9* Credit Agreement by and between Caminus LLC and Fleet Bank,
N.A., dated June 23, 1999.
10.10* Security Agreement by and between Caminus LLC and Fleet
Bank, N.A., dated June 23, 1999.
10.11* Debenture issued by Caminus Energy Limited to Fleet Bank,
N.A., dated June 23, 1999.
10.12* Debenture issued by Caminus Limited to Fleet Bank, N.A.,
dated June 23, 1999.
10.13* Debenture issued by Zai*Net Software Limited to Fleet Bank,
N.A., dated June 23, 1999.
</TABLE>

II-6
<PAGE> 171

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
10.14* Guarantee by Caminus Energy Limited in favor of Fleet Bank,
N.A., dated June 23, 1999.
10.15* Guarantee by Caminus Limited in favor of Fleet Bank, N.A.,
dated June 23, 1999.
10.16* Guarantee by Zai*Net Software Limited in favor of Fleet
Bank, N.A., dated June 23, 1999.
10.17* Mortgage of Stock and Shares by Caminus Limited in favor of
Fleet Bank, N.A., dated June 23, 1999.
10.18* Mortgage of Stock and Shares by Caminus LLC in favor of
Fleet Bank, N.A., dated June 23, 1999.
10.19* Employment Agreement by and between David M. Stoner and
Caminus Energy Ventures LLC, dated May 12, 1998.
10.20* Pledge and Security Agreement by and between David M. Stoner
and Caminus Energy Ventures LLC, dated October 21, 1998.
10.21* Service Agreement by and between Dr. Nigel L. Evans and
Caminus Energy Limited, dated May 12, 1998.
10.22* Covenant Not to Compete by and among Dr. Nigel L. Evans, Dr.
Michael B. Morrison and Caminus Energy Limited, dated May
12, 1998.
10.23* Employment Agreement by and between Brian J. Scanlan and
Zai*Net Software, L.P., dated May 12, 1998.
10.24* Covenant Not to Compete by and between Brian J. Scanlan and
Zai*Net Software, L.P., dated May 12, 1998.
10.25* Employment Agreement by and between Simon Young and Zai*Net
Software, L.P., dated May 12, 1998.
10.26* Covenant Not to Compete by and between Simon Young and
Zai*Net Software, L.P., dated May 12, 1998.
10.27* Distributor Agreement by and between SS&C Technologies, Inc.
and GFI Caminus LLC, dated May 12, 1998.
10.28 Agreement by and between Caminus LLC and GFI Two LLC, dated
January 21, 2000.
10.29* Lease Agreement by and between Sage Realty Corporation and
Zai*Tech Software, Inc., as amended, dated February 15, 1991
(including Amendment Nos. 1, 2 and 3, reflecting the name
changes to Zai*Net Software, Inc. Zai*Net Software, L.P. and
Caminus LLC, respectively).
10.30* Service Agreement by and between Dr. Michael B. Morrison and
Caminus Energy Limited, dated May 12, 1998.
10.31* Purchase and Option Agreement, as amended, by and between
Caminus Energy Ventures LLC and SS&C Technologies, Inc.,
dated December 31, 1998.
10.32* Revolving Promissory Note issued by Caminus LLC to Fleet
Bank, N.A., dated June 23, 1999.
10.33* Working Capital Promissory Note issued by Caminus LLC to
Fleet Bank, N.A., dated June 23, 1999.
10.34* Mortgage of Stocks and Shares, by Caminus Limited in favor
of Fleet Bank, N.A., dated June 23, 1999.
10.35* Mortgage of Stocks and Shares, by Caminus LLC in favor of
Fleet Bank, N.A., dated June 23, 1999.
10.36 Amendment to Limited Liability Company Agreement among
Caminus LLC and certain members of Caminus LLC, dated
January 19, 2000.
10.37* Form of Escrow Agreement by and among Caminus Corporation,
Caminus/DC Acquisition Corp., Escrow Agent and Buyer
Parties, as defined in the agreement, to be filed prior to
the effective date of this offering.
</TABLE>

II-7
<PAGE> 172

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
10.38* Amendment No. 1 to Employment Agreement between Brian
Scanlan and Caminus LLC, dated November 8, 1999.
10.39 Amendment No. 1 to Employment Agreement between Dr. Nigel
Evans and Caminus Limited, dated January 14, 2000.
10.40* Amendment No. 1 to Employment Agreement between Simon Young
and Caminus LLC, dated November 8, 1999.
10.41* Amendment No. 1 to Employment Agreement between Dr. Michael
Morrison and Caminus LLC, dated November 8, 1999.
10.42* Pledge Agreement between Caminus LLC and Fleet Bank, N.A.,
dated September 1, 1999.
10.43* Pledge Agreement between DC Systems, Inc. and Fleet Bank,
N.A., dated August 30, 1999.
10.44* Pledge Agreement between Caminus/DC Acquisition Corp. and
Fleet Bank, N.A., dated August 30, 1999.
10.45* Security Agreement between DC Systems, Inc. and Fleet Bank,
N.A., dated September 1, 1999.
10.46* Security Agreement between Caminus/DC Acquisition Corp. and
Fleet Bank, N.A., dated September 1, 1999.
10.47* Security Agreement between DCS*Gasnet Corporation and Fleet
Bank, N.A., dated September 1, 1999.
10.48* Guarantee made by DC Systems, Inc. in favor of Fleet Bank,
N.A., dated September 1, 1999.
10.49* Guarantee made by Caminus/DC Acquisition Corp. in favor of
Fleet Bank, N.A., dated September 1, 1999.
10.50* Guarantee made by DCS*Gasnet Corp. in favor of Fleet Bank,
N.A., dated September 1, 1999.
10.51 Amendment No. 2 to Employment Agreement between Dr. Michael
B. Morrison and Caminus Limited, dated January 14, 2000.
10.52 Form of Security Agreement between Caminus Corporation and
Fleet Bank, N.A.
10.53 Exchange Agreement between Caminus Corporation and OCM
Caminus Investment, Inc., dated January 21, 2000.
21.1*** Subsidiaries of the Registrant.
23.1** Consent of Hale and Dorr LLP (included in Exhibit 5).
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Peters, Elworthy & Moore.
23.4 Consent of PricewaterhouseCoopers LLP.
24* Power of Attorney.
27* Financial Data Schedule.
</TABLE>

- -------------------------
* Previously filed.

** To be filed by amendment.

*** Superseding filing.

+ The Registrant hereby agrees to furnish supplementally a copy of any omitted
schedules to this agreement to the Securities and Exchange Commission upon
its request.

II-8
<PAGE> 173

(b) Financial Statement Schedules

Schedule II -- Valuation and Qualifying Accounts

All other schedules have been omitted because they are not required or
because the required information is given in the Registrant's consolidated
financial statements or notes to those statements.

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions contained in the Certificate of
Incorporation of the Registrant and the laws of the State of Delaware, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and this offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-9
<PAGE> 174

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in New
York, New York, on this 21st day of January, 2000.

CAMINUS CORPORATION

By: /s/ DAVID M. STONER
------------------------------------
David M. Stoner
President and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DAVID M. STONER President and Chief Executive January 21, 2000
- --------------------------------------------------- Officer (Principal Executive
David M. Stoner Officer) and Director
* Vice President, Chief January 21, 2000
- --------------------------------------------------- Financial Officer and
Mark A. Herman Treasurer (Principal
Financial Officer and
Principal Accounting Officer)
* Chairman of the Board of January 21, 2000
- --------------------------------------------------- Directors
Lawrence D. Gilson
* Director January 21, 2000
- ---------------------------------------------------
Nigel L. Evans
* Director January 21, 2000
- ---------------------------------------------------
Brian J. Scanlan
* Director January 21, 2000
- ---------------------------------------------------
Christopher S. Brothers
* Director January 21, 2000
- ---------------------------------------------------
Anthony H. Bloom
* Director January 21, 2000
- ---------------------------------------------------
Richard K. Landers
</TABLE>

*By: /s/ DAVID M. STONER
------------------------------
David M. Stoner
Attorney-in-Fact

II-10
<PAGE> 175

EXHIBIT INDEX

<PAGE> 176

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
10.16* Guarantee by Zai*Net Software Limited in favor of Fleet
Bank, N.A., dated June 23, 1999.
10.17* Mortgage of Stock and Shares by Caminus Limited in favor of
Fleet Bank, N.A., dated June 23, 1999.
10.18* Mortgage of Stock and Shares by Caminus LLC in favor of
Fleet Bank, N.A., dated June 23, 1999.
10.19* Employment Agreement by and between David M. Stoner and
Caminus Energy Ventures LLC, dated May 12, 1998.
10.20* Pledge and Security Agreement by and between David M. Stoner
and Caminus Energy Ventures LLC, dated October 21, 1998.
10.21* Service Agreement by and between Dr. Nigel L. Evans and
Caminus Energy Limited, dated May 12, 1998.
10.22* Covenant Not to Compete by and among Dr. Nigel L. Evans, Dr.
Michael B. Morrison and Caminus Energy Limited, dated May
12, 1998.
10.23* Employment Agreement by and between Brian J. Scanlan and
Zai*Net Software, L.P., dated May 12, 1998.
10.24* Covenant Not to Compete by and between Brian J. Scanlan and
Zai*Net Software, L.P., dated May 12, 1998.
10.25* Employment Agreement by and between Simon Young and Zai*Net
Software, L.P., dated May 12, 1998.
10.26* Covenant Not to Compete by and between Simon Young and
Zai*Net Software, L.P., dated May 12, 1998.
10.27* Distributor Agreement by and between SS&C Technologies, Inc.
and GFI Caminus LLC, dated May 12, 1998.
10.28 Agreement by and between Caminus LLC and GFI Two LLC, dated
January 21, 2000.
10.29* Lease Agreement by and between Sage Realty Corporation and
Zai*Tech Software, Inc., as amended, dated February 15, 1991
(including Amendment Nos. 1, 2 and 3, reflecting the name
changes to Zai*Net Software, Inc. Zai*Net Software, L.P. and
Caminus LLC, respectively).
10.30* Service Agreement by and between Dr. Michael B. Morrison and
Caminus Energy Limited, dated May 12, 1998.
10.31* Purchase and Option Agreement, as amended, by and between
Caminus Energy Ventures LLC and SS&C Technologies, Inc.,
dated December 31, 1998.
10.32* Revolving Promissory Note issued by Caminus LLC to Fleet
Bank, N.A., dated June 23, 1999.
10.33* Working Capital Promissory Note issued by Caminus LLC to
Fleet Bank, N.A., dated June 23, 1999.
10.34* Mortgage of Stocks and Shares, by Caminus Limited in favor
of Fleet Bank, N.A., dated June 23, 1999.
10.35* Mortgage of Stocks and Shares, by Caminus LLC in favor of
Fleet Bank, N.A., dated June 23, 1999.
10.36 Amendment to Limited Liability Company Agreement among
Caminus LLC and certain members of Caminus LLC, dated
January 19, 2000.
10.37* Form of Escrow Agreement by and among Caminus Corporation,
Caminus/DC Acquisition Corp., Escrow Agent and Buyer
Parties, as defined in the agreement, to be filed prior to
the effective date of this offering.
10.38* Amendment No. 1 to Employment Agreement between Brian
Scanlan and Caminus LLC, dated November 8, 1999.
</TABLE>

<PAGE> 177

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
10.39 Amendment No. 1 to Employment Agreement between Dr. Nigel
Evans and Caminus Limited, dated January 14, 2000.
10.40* Amendment No. 1 to Employment Agreement between Simon Young
and Caminus LLC, dated November 8, 1999.
10.41* Amendment No. 1 to Employment Agreement between Dr. Michael
Morrison and Caminus LLC, dated November 8, 1999.
10.42* Pledge Agreement between Caminus LLC and Fleet Bank, N.A.,
dated September 1, 1999.
10.43* Pledge Agreement between DC Systems, Inc. and Fleet Bank,
N.A., dated August 30, 1999.
10.44* Pledge Agreement between Caminus/DC Acquisition Corp. and
Fleet Bank, N.A., dated August 30, 1999.
10.45* Security Agreement between DC Systems, Inc. and Fleet Bank,
N.A., dated September 1, 1999.
10.46* Security Agreement between Caminus/DC Acquisition Corp. and
Fleet Bank, N.A., dated September 1, 1999.
10.47* Security Agreement between DCS*Gasnet Corporation and Fleet
Bank, N.A., dated September 1, 1999.
10.48* Guarantee made by DC Systems, Inc. in favor of Fleet Bank,
N.A., dated September 1, 1999.
10.49* Guarantee made by Caminus/DC Acquisition Corp. in favor of
Fleet Bank, N.A., dated September 1, 1999.
10.50* Guarantee made by DCS*Gasnet Corp. in favor of Fleet Bank,
N.A., dated September 1, 1999.
10.51 Amendment No. 2 to Employment Agreement between Dr. Michael
B. Morrison and Caminus Limited, dated January 14, 2000.
10.52 Form of Security Agreement between Caminus Corporation and
Fleet Bank, N.A.
10.53 Exchange Agreement between Caminus Corporation and OCM
Caminus Investment, Inc., dated January 21, 2000.
21.1*** Subsidiaries of the Registrant.
23.1** Consent of Hale and Dorr LLP (included in Exhibit 5).
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Peters, Elworthy & Moore.
23.4 Consent of PricewaterhouseCoopers LLP.
24* Power of Attorney.
27* Financial Data Schedule.
</TABLE>

- -------------------------
* Previously filed.

** To be filed by amendment.

*** Superseding filing.

+ The Registrant hereby agrees to furnish supplementally a copy of any omitted
schedules to this agreement to the Securities and Exchange Commission upon
its request.

<PAGE> 1

4,372,000 Shares

Caminus Corporation

Common Stock

($.01 Par Value)

UNDERWRITING AGREEMENT

January ___, 2000

Deutsche Bank Securities Inc.
Bear, Stearns & Co. Inc.
CIBC World Markets Corp.
As Representatives of the
Several Underwriters
c/o Deutsche Bank Securities Inc.
One South Street
Baltimore, Maryland 21202

Ladies and Gentlemen:

Caminus Corporation, a Delaware corporation (the "Company"), and
certain shareholders of the Company (the "Selling Shareholders") propose to sell
to the several underwriters (the "Underwriters") named in SCHEDULE I hereto for
whom you are acting as representatives (the "Representatives") an aggregate of
4,372,000 shares of the Company's Common Stock, $.01 par value (the "Firm
Shares"), of which 3,572,235 shares will be sold by the Company and 799,765
shares will be sold by the Selling Shareholders. The respective amounts of the
Firm Shares to be so purchased by the several Underwriters are set forth
opposite their names in SCHEDULE I hereto and the respective amounts to be sold
by the Selling Shareholders are set forth opposite their names in SCHEDULE II
hereto. The Company and the Selling Shareholders are sometimes referred to
herein collectively as the "Sellers." The Company and certain Selling
Shareholders also propose to sell at the Underwriters' option an aggregate of up
to 655,800 additional shares of the Company's Common Stock (the "Option Shares")
as set forth below.

As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares set
forth opposite their respective names in SCHEDULE I, plus their pro rata

<PAGE> 2

portion of the Option Shares if you elect to exercise the over-allotment option
in whole or in part for the accounts of the several Underwriters. The Firm
Shares and the Option Shares (to the extent the aforementioned option is
exercised) are herein collectively called the "Shares."

In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:

1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

(a) The Company represents and warrants to each of the
Underwriters as follows:

(i) A registration statement on Form S-1 (File No. 333-88437)
with respect to the Shares has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the "Act"), and the
Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission. The Company has complied with the conditions for the use of Form
S-1. Copies of such registration statement, including any amendments thereto,
the preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been delivered by the
Company to you. Such registration statement, together with any registration
statement filed by the Company pursuant to Rule 462(b) of the Act, herein
referred to as the "Registration Statement," which shall be deemed to include
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, has become effective under the Act and no
post-effective amendment to the Registration Statement has been filed as of the
date of this Agreement. "Prospectus" means the form of prospectus first filed
with the Commission pursuant to Rule 424(b). Each preliminary prospectus
included in the Registration Statement prior to the time it becomes effective is
herein referred to as a "Preliminary Prospectus." Any reference herein to the
Registration Statement, any Preliminary Prospectus or to the Prospectus shall be
deemed to refer to and include any supplements or amendments thereto, filed with
the Commission after the date of filing of the Prospectus under Rules 424(b) or
430A, and prior to the termination of the offering of the Shares by the
Underwriters.

(ii) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement. Each of the
subsidiaries of the Company as listed in EXHIBIT A hereto (collectively, the
"Subsidiaries") has been duly organized and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement. The Subsidiaries are the
only subsidiaries of the Company, and those Subsidiaries which are "significant
subsidiaries" (as defined in Rule 1-02(w) of Regulation S-X) of the Company, are
indicated as such on EXHIBIT A. The Company and each of the Subsidiaries are
duly qualified to transact business in all jurisdictions in which the conduct of
their business requires such qualification, except where the failure to be so
qualified could not be reasonably expected to have a material adverse effect on
the business, financial condition, business prospects, liquidity or results of
operations of the Company and the Subsidiaries taken as whole (a "Material
Adverse Effect"). The outstanding shares of

2
<PAGE> 3
capital stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and on-assessable and to the extent shown in EXHIBIT A
hereto are owned by the Company or another Subsidiary free and clear of all
liens, encumbrances and equities and claims; and no options, warrants or other
rights to purchase, agreements or other obligations to issue or other rights to
convert any obligations into shares of capital stock or ownership interests in
the Subsidiaries are outstanding.

(iii) The outstanding shares of Common Stock of the Company,
including all shares to be sold by the Selling Shareholders, have been duly
authorized and validly issued and are fully paid and non-assessable; the portion
of the Shares to be issued and sold by the Company have been duly authorized and
when issued and paid for as contemplated herein will be validly issued, fully
paid and non-assessable; and no preemptive rights of stockholders exist with
respect to any of the Shares or the issue and sale thereof. Neither the filing
of the Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the registration of any shares
of Common Stock.

(iv) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct in all respects. All of
the Shares conform to the description thereof contained in the Registration
Statement in all material respects. The form of certificates for the Shares
conforms to the corporate law of the jurisdiction of the Company's
incorporation.

(v) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering of the
Shares nor, to the knowledge of the Company, instituted proceedings for that
purpose. The Registration Statement conforms, and the Prospectus and any
amendments or supplements thereto will conform, in all material respects, to the
requirements of the Act and the Rules and Regulations. The Registration
Statement and any amendments thereto do not contain, and will not contain, any
untrue statement of a material fact, and do not omit, and will not omit, to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus and any amendments and
supplements thereto do not contain, and will not contain, any untrue statement
of material fact; and do not omit, and will not omit, to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as to
information contained in or omitted from the Registration Statement or the
Prospectus, or any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
any Underwriter through the Representatives, specifically for use in the
preparation thereof.

(vi) The consolidated financial statements of the Company and
the Subsidiaries, together with related notes and schedules as set forth in the
Registration Statement, present fairly, in all material respects, the financial
position and the results of operations and cash flows of the Company and the
consolidated Subsidiaries, at the indicated dates and for the indicated periods.
Such financial statements and related schedules have been prepared in accordance
with generally accepted accounting principles, consistently applied throughout
the periods involved, except as disclosed therein, and all adjustments necessary
for a fair presentation of results for such periods

3
<PAGE> 4

have been made. The summary financial data included in the Registration
Statement present fairly the information shown therein and such data have been
compiled on a basis consistent with the financial statements presented therein
and the books and records of the Company. The pro forma financial statements and
other pro forma financial information included in the Registration Statement and
the Prospectus present fairly, in all material respects, the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and other pro forma
financial information, as the case may be, have been properly compiled on the
pro forma bases described therein, and, in the opinion of the Company, except to
the extent otherwise required to comply with the Commission's rules and
guidelines with respect to pro forma financial information, assumptions used in
the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.

(vii) PricewaterhouseCoopers LLP and Peters Elworthy & Moore,
who have certified certain of the financial statements filed with the Commission
as part of the Registration Statement, are each independent public accountants
as required by the Act and the Rules and Regulations.

(viii) There is no action, suit, claim or proceeding pending
or, to the knowledge of the Company, threatened against the Company or any of
the Subsidiaries before any court or administrative agency or otherwise which if
determined adversely to the Company or any of its Subsidiaries could reasonably
be expected to result in a Material Adverse Effect or prevent the consummation
of the transactions contemplated hereby, except as set forth in the Registration
Statement.

(ix) The Company and the Subsidiaries own, or have valid
rights to use, all of the properties and assets reflected in the financial
statements (or as described in the Registration Statement as owned by the
Company or its Subsidiaries) hereinabove described, subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those reflected in
such financial statements (or as described in the Registration Statement) or
which secure obligations not material in amount. The Company and the
Subsidiaries occupy their leased properties under valid and binding leases
conforming in all material respects to the description thereof set forth in the
Registration Statement.

(x) The Company and the Subsidiaries have filed all Federal,
state, local and foreign tax returns which have been required to be filed and
have paid all taxes indicated by said returns and all assessments received by
them or any of them to the extent that such taxes have become due, except for
assessments contested in good faith for which adequate reserves have been
provided to the extent required by generally accepted accounting principles. All
tax liabilities have been adequately provided for in the financial statements of
the Company, and the Company does not know of any actual or proposed additional
material tax assessments.

(xi) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or supplemented, and
except as specifically disclosed in the Registration Statement, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the earnings, business, management,

4
<PAGE> 5

properties, assets, operations, financial condition, or business prospects of
the Company and its Subsidiaries taken as a whole, whether or not occurring in
the ordinary course of business, and there has not been any material transaction
entered into or any material transaction that is probable of being entered into
by the Company or the Subsidiaries, other than transactions in the ordinary
course of business and changes and transactions described in the Registration
Statement, as it may be amended or supplemented. The Company and the
Subsidiaries have no material contingent obligations which are not disclosed in
the Registration Statement, as it may be amended or supplemented.

(xii) Neither the Company nor any of the Subsidiaries is or
with the giving of notice or lapse of time or both, will be, in violation of or
in default under its Certificate of Incorporation (or other organizational
documents) or Bylaws or under any agreement, lease, contract, indenture or other
instrument or obligation to which it is a party or by which it, or any of its
properties, is bound and which default could be reasonably expected to have a
Material Adverse Effect. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions herein
contemplated and the fulfillment by the Company of the terms hereof will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any Subsidiary is a party and
which is material to the Company and the Subsidiaries considered as one
enterprise, or of the Certificate of Incorporation or Bylaws of the Company or
any order, rule or regulation applicable to the Company or any Subsidiary of any
court or of any United States or foreign regulatory body or administrative
agency or other governmental body having jurisdiction over the Company or such
Subsidiary.

(xiii) Each approval, consent, order, authorization,
designation, declaration or filing by or with any United States or foreign
regulatory, administrative or other governmental body necessary in connection
with the execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated (except such additional
steps as may be required by the Commission, the National Association of
Securities Dealers, Inc. (the "NASD") or such additional steps as may be
necessary to qualify the Shares for public offering by the Underwriters under
state or foreign securities or Blue Sky laws) has been obtained or made and is
in full force and effect.

(xiv) The Company and each of the Subsidiaries holds all
licenses, certificates and permits from United States and foreign governmental
authorities which are material to the conduct of the businesses of the Company
and the Subsidiaries taken as a whole.

(xv) Neither the Company, nor, to the Company's knowledge, any
of its affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or resale of the
Shares. The Company acknowledges that the Underwriters may engage in passive
market making transactions in the Shares on The Nasdaq Stock Market in
accordance with Regulation M under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").

5
<PAGE> 6

(xvi) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of such term under the Investment Company Act of
1940, as amended, (the "1940 Act"), and the rules and regulations of the
Commission thereunder.

(xvii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(xviii) The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar industries.

(xix) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company would have any liability; the Company has not incurred and
does not expect to incur material liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.

(xx) The Company or a Subsidiary owns or possesses the
licenses or other rights to use all service marks, service mark applications,
trade names, copyrights, manufacturing processes, formulae, trade secrets,
patents, patent applications, trademarks, trademark applications, and know-how
or other information (collectively, "Intellectual Property") described in the
Prospectus as owned or used by them or which are necessary to the conduct of
their businesses as described in the Prospectus, except where the failure to own
or possess any such licenses or rights could not be reasonably expected to have
a Material Adverse Effect. To the knowledge of the Company, after due inquiry
(A) none of the Intellectual Property rights owned or licensed by the Company
are unenforceable or invalid, and (B) there is no infringement of or conflict
with the rights or claims of others with respect to any of the Company's
products or Intellectual Property which could have a Material Adverse Effect.
Except as a result of the license of its Intellectual Property in the ordinary
course of business, the Company is not aware of the granting of any Intellectual
Property rights to third parties or the filing of patent applications by third
parties or any other rights of third parties to any of the Company's
Intellectual Property rights by any third party.

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<PAGE> 7

(xxi) The Company is in compliance with the terms and
conditions of all applicable federal, state, local and foreign laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"). The Company has not received notice from
any United States or foreign governmental authority of any claim under any
Environmental Laws. No property that is owned, leased or occupied by the Company
has been designated as a Superfund site pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (420
U.S.C. (S) 9601 et seq.), or otherwise designated as a contaminated site under
applicable state or local laws.

(xxii) The Company is not involved in any labor dispute nor,
to the Company's knowledge, is any such dispute threatened. The Company is not
aware that (A) any executive officer, key employee or significant group of
employees of the Company plans to terminate employment with the Company or (B)
any such executive or key employee is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement that would be
violated by the present or proposed business activities of the Company.

(xxiii) Except as contemplated by this Agreement or described
in the Registration Statement, there is no broker, finder or other party that is
entitled to receive from the Company any brokerage or finder's fee or other fee
or commission as a result of the transactions contemplated by this Agreement.

(xxiv) The Company has listed, subject to official notice of
issuance, on the Nasdaq National Market, the shares to be issued and sold by the
Company.

(b) Each of the Selling Shareholders severally and not jointly
represents and warrants as follows:

(i) Such Selling Shareholder now has and at the Closing Date
and the Option Closing Date, as the case may be (as such dates are hereinafter
defined) will have good and valid title to the Firm Shares and the Option Shares
to be sold by such Selling Shareholder, free and clear of any liens,
encumbrances, equities and claims, and full right, power and authority to effect
the sale and delivery of such Firm Shares and Option Shares. Upon the
Underwriters obtaining control of the Shares to be sold by such Selling
Shareholder, and assuming the Underwriters purchased such Shares for value and
without notice of any adverse claim to such Shares within the meaning of Section
8-102 of the Uniform Commercial Code as enacted by the Commonwealth of
Massachusetts, the Underwriters will have acquired all rights of such Selling
Shareholder in such Shares free of any adverse claim, any lien in favor of the
Company and any restrictions on transfer imposed by the Company.

(ii) Such Selling Shareholder has full right, power and
authority to execute and deliver this Agreement, the Power of Attorney, and the
Custody Agreement referred to below and to perform its obligations under such
Agreements. The execution and delivery of this Agreement and the consummation by
such Selling Shareholder of the transactions herein contemplated and the
fulfillment by such Selling Shareholder of the terms hereof will not require any
consent, approval, authorization, or other order of any United States or foreign
court, regulatory body, administrative

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<PAGE> 8

agency or other governmental body (except as may be required under the Act,
state or foreign securities laws or Blue Sky laws) and will not result in a
breach of any of the terms and provisions of, or constitute a default under,
organizational documents of such Selling Shareholder, if not an individual, or
any material indenture, mortgage, deed of trust or other agreement or instrument
to which such Selling Shareholder is a party, or of any order, rule or
regulation applicable to such Selling Shareholder of any United States or
foreign court or of any United States or foreign regulatory body or
administrative agency or other governmental body having jurisdiction over such
Selling Shareholder.

(iii) Except for the execution and delivery of a Lockup
Agreement (as defined below), or as otherwise contemplated herein, such Selling
Shareholder has not taken and will not take, directly or indirectly, any action
designed to, or which has constituted, or which might reasonably be expected to
cause or result in the stabilization or manipulation of the price of the Common
Stock of the Company and, other than as permitted by the Act, the Selling
Shareholder will not distribute any prospectus or other offering material in
connection with the offering of the Shares.

(iv) Without having undertaken to determine independently the
accuracy or completeness of either the representations and warranties of the
Company contained herein or the information contained in the Registration
Statement, such Selling Shareholder (A) has no reason to believe that the
representations and warranties of the Company contained in this Section 1 are
not true and correct in all material respects, and (B) has no knowledge of any
material fact, condition or information not disclosed in the Registration
Statement which has adversely affected in any material respect or may adversely
affect in any material respect the business of the Company and the Subsidiaries
taken as a whole. The information pertaining to such Selling Shareholder under
the caption "Principal and Selling Stockholders" in the Prospectus is complete
and accurate in all material respects.

2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.

(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set forth, the
Sellers agree to sell to the Underwriters and each Underwriter agrees, severally
and not jointly, to purchase, at a price of $_____ per share, the number of Firm
Shares set forth opposite the name of each Underwriter in SCHEDULE I hereof,
subject to adjustments in accordance with Section 9 hereof. The number of Firm
Shares to be purchased by each Underwriter from each Seller shall be as nearly
as practicable in the same proportion to the total number of Firm Shares being
sold by each Seller as the number of Firm Shares being purchased by each
Underwriter bears to the total number of Firm Shares to be sold hereunder. The
obligations of the Company and of each of the Selling Shareholders shall be
several and not joint.

(b) Certificates in negotiable form for the total number of
the Shares to be sold hereunder by the Selling Shareholders have been placed in
custody with the Company as custodian (the "Custodian") pursuant to the Custody
Agreement executed by each Selling Shareholder for delivery of all Firm Shares
and any Option Shares to be sold hereunder by the Selling Shareholders. Each of
the Selling Shareholders specifically agrees that the Firm Shares and any Option
Shares

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<PAGE> 9

represented by the certificates held in custody for the Selling Shareholders
under the Custody Agreement are subject to the interests of the Underwriters
hereunder, that the arrangements made by the Selling Shareholders for such
custody are to that extent irrevocable, and that the obligations of the Selling
Shareholders hereunder shall not be terminable by any act or deed of the Selling
Shareholders (or by any other person, firm or corporation including the Company,
the Custodian or the Underwriters) or by operation of law (including the death
of an individual Selling Shareholder or the dissolution of a corporate Selling
Shareholder) or by the occurrence of any other event or events, except as set
forth in the Custody Agreement. If any such event should occur prior to the
delivery to the Underwriters of the Firm Shares or the Option Shares hereunder,
certificates for the Firm Shares or the Options Shares, as the case may be,
shall be delivered by the Custodian in accordance with the terms and conditions
of this Agreement as if such event has not occurred. The Custodian is authorized
to receive and acknowledge receipt of the proceeds of sale of the Shares held by
it against delivery of such Shares.

(c) Payment for the Firm Shares to be sold hereunder is to be
made by wire transfer of Federal (same day) funds to an account designated by
the Company for the shares to be sold by it and to an account designated by the
Custodian for the shares to be sold by the Selling Shareholders, in each case
against delivery of certificates therefor to the Representatives for the several
accounts of the Underwriters. Such payment and delivery are to be made through
the facilities of the Depository Trust Company at 10:00 a.m., New York time, on
the fourth business day after the date of this Agreement or at such other time
and date not later than six business days thereafter as you and the Company
shall agree upon, such time and date being herein referred to as the "Closing
Date." (As used herein, "business day" means a day on which the New York Stock
Exchange is open for trading and on which banks in New York are open for
business and not permitted by law or executive order to be closed.)

(d) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and the certain Selling Shareholders listed on SCHEDULE III
hereto hereby grants an option to the several Underwriters to purchase the
Option Shares at the price per share as set forth in the first paragraph of this
Section 2. The maximum number of Option Shares to be sold by the Company and the
Selling Shareholders is set forth opposite their respective names on SCHEDULE
III hereto. The option granted hereby may be exercised in whole or in part by
giving written notice (i) at any time before the Closing Date and (ii) only once
thereafter within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company, the
Attorney-in-Fact, and the Custodian setting forth the number of Option Shares as
to which the several Underwriters are exercising the option, the names and
denominations in which the Option Shares are to be registered and the time and
date at which such certificates are to be delivered. If the option granted
hereby is exercised in part, the respective number of Option Shares to be sold
by the Company and each of the Selling Shareholders listed in SCHEDULE III
hereto shall be determined on a pro rata basis in accordance with the
percentages set forth opposite their names on SCHEDULE III hereto, adjusted by
you in such manner as to avoid fractional shares. The time and date at which
certificates for Option Shares are to be delivered shall be determined by the
Representatives but shall not be earlier than three nor later than 10 full
business days after the exercise of such option, nor in any event prior to the
Closing Date (such time and date being herein referred to as the "Option Closing
Date"). If the date of exercise of the option is three or more days before the
Closing Date, the notice of exercise shall

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<PAGE> 10

set the Closing Date as the Option Closing Date. The number of Option Shares to
be purchased by each Underwriter shall be in the same proportion to the total
number of Option Shares being purchased as the number of Firm Shares being
purchased by such Underwriter bears to the total number of Firm Shares, adjusted
by you in such manner as to avoid fractional shares. The option with respect to
the Option Shares granted hereunder may be exercised only to cover
over-allotments in the sale of the Firm Shares by the Underwriters. You, as
Representatives of the several Underwriters, may cancel such option at any time
prior to its expiration by giving written notice of such cancellation to the
Company and the Attorney-in-Fact. To the extent, if any, that the option is
exercised, payment for the Option Shares shall be made on the Option Closing
Date by wire transfer of Federal (same day) funds to an account designated by
the Company for the Option Shares to be sold by it and to an account designated
by the Custodian for the Option Shares to be sold by the Selling Shareholders
against delivery of certificates therefor through the facilities of the
Depository Trust Company, New York, New York.

(e) If on the Closing Date or Option Closing Date, as the case
may be, any Selling Shareholder fails to sell the Firm Shares or Option Shares
which such Selling Shareholder has agreed to sell on such date as set forth in
SCHEDULE III hereto, the Company agrees that it will sell or arrange for the
sale of that number of shares of Common Stock to the Underwriters which
represents Firm Shares or the Option Shares which such Selling Shareholder has
failed to so sell, as set forth in SCHEDULE III hereto, or such lesser number as
may be requested by the Representatives.

3. OFFERING BY THE UNDERWRITERS.

It is understood that the several Underwriters are to make a
public offering of the Firm Shares as soon as the Representatives deem it
advisable to do so. The Firm Shares are to be initially offered to the public at
the initial public offering price set forth in the Prospectus. The
Representatives may from time to time thereafter change the public offering
price and other selling terms. To the extent, if at all, that any Option Shares
are purchased pursuant to Section 2 hereof, the Underwriters will offer them to
the public on the foregoing terms.

It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of the Shares in
accordance with a Master Agreement Among Underwriters entered into by you and
the several other Underwriters.

4. COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.

(a) The Company covenants and agrees with the several
Underwriters that:

(i) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule 430A of
the Rules and Regulations is followed, to prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus in a form
approved by the Representatives containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A of
the Rules and Regulations, and (B) not file any amendment to the Registration
Statement or supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with

10
<PAGE> 11

a copy or to which the Representatives shall have reasonably objected in writing
or which is not in compliance with the Rules and Regulations.

(ii) The Company will advise the Representatives promptly (A)
when the Registration Statement or any post-effective amendment thereto shall
have become effective, (B) of receipt of any comments from the Commission, (C)
of any request of the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, and (D) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the use of the Prospectus or of the institution of
any proceedings for that purpose. The Company will use its best efforts to
prevent the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof, if issued.

(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of such
United States or foreign jurisdictions as the Representatives may reasonably
have designated in writing and will make such applications, file such documents,
and furnish such information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction where it
is not now so qualified or required to file such a consent. The Company will,
from time to time, prepare and file such statements, reports and other
documents, as are or may be required to continue such qualifications in effect
for so long a period as the Representatives may reasonably request for
distribution of the Shares.

(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary Prospectus
as the Representatives may reasonably request. The Company will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representatives may
reasonably request. The Company will deliver to the Representatives at or before
the Closing Date, four conformed copies of the Registration Statement and all
amendments thereto, including all exhibits filed therewith, and will deliver to
the Representatives such number of copies of the Registration Statement
(including such number of copies of the exhibits filed therewith that may
reasonably be requested), and of all amendments thereto, as the Representatives
may reasonably request.

(v) The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of the
Commission thereunder, so as to permit the completion of the distribution of the
Shares as contemplated in this Agreement and the Prospectus. If during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the Underwriters, it
becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Prospectus to comply with any law, the
Company promptly will prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the

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<PAGE> 12

light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with the law.

(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later than
18 months after the effective date of the Registration Statement, an earnings
statement (which need not be audited) in reasonable detail, covering a period of
at least 12 consecutive months beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the requirements
of Section 11(a) of the Act and Rule 158 of the Rules and Regulations and will
advise you in writing when such statement has been so made available.

(vii) Prior to the Closing Date, the Company will furnish to
the Underwriters, as soon as they have been prepared by or are available to the
Company, a copy of any unaudited interim financial statements of the Company for
any period subsequent to the period covered by the most recent financial
statements appearing in the Registration Statement and the Prospectus.

(viii) No offering, sale, short sale or other disposition of
any shares of Common Stock of the Company or other securities convertible into
or exchangeable or exercisable for shares of Common Stock or derivative of
Common Stock (or agreement for such), will be made for a period of 180 days
after the date of this Agreement, directly or indirectly, by the Company
otherwise than hereunder or with the prior written consent of Deutsche Bank
Securities Inc., except that the Company may, without such consent (A) issue
shares upon the exercise of options and warrants outstanding on the date of this
Agreement, (B) issue shares in respect of the acquisition by the Company of the
assets or capital stock of another person or entity and (C) grant options and
offer to sell shares of Common Stock to its employees, directors, consultants
and advisors, and issue shares of Common Stock upon the exercise of any such
options, pursuant to the Company's 1998 Stock Incentive Plan, 1999 Stock
Incentive Plan and 1999 Employee Stock Purchase Plan.

(ix) The Company has caused each officer and director and
specific shareholders of the Company to furnish to you, on or prior to the date
of this agreement, a letter or letters, in form and substance satisfactory to
the Underwriters, pursuant to which each such person shall agree not to,
directly or indirectly, offer, sell, pledge, contract to sell (including any
short sale), grant any option to purchase or otherwise dispose of or enter into
any hedging transaction related to any shares of Common Stock of the Company or
other capital stock of the Company, for a period of 180 days after the date of
this Agreement, directly or indirectly, except with the prior written consent of
Deutsche Bank Securities Inc. ("Lockup Agreements") and except that such persons
may transfer any or all of the Common Stock subject to the Lockup Agreements (a)
by gift, will or intestacy, (b) to such person's partners, shareholders, members
or affiliates and (iii) if such person is an individual, to such person's
immediate family or to a trust, the beneficiaries of which are exclusively such
person and/or members of such person's immediate family; provided, however, that
in any such case it shall be a condition to the transfer that the transferee
execute an agreement stating that the transferee is receiving and holding the
Common Stock subject to the provisions of the Lockup Agreements, and there shall
be no further transfer of such Common Stock except in accordance with the Lockup
Agreements.

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<PAGE> 13

(x) The Company shall apply the net proceeds of its sale of
the Shares as set forth in the Prospectus and shall file such reports with the
Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the Act.

(xi) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a manner as
would require the Company or any of the Subsidiaries to register as an
investment company under the 1940 Act.

(xii) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a registrar
for the Common Stock.

(xiii) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company.

(b) Each of the Selling Shareholders covenants and agrees with
the several Underwriters that:

(i) No offering, sale, pledge, contract to sell (including any
short sale), grant of any option to purchase or other disposition or hedging
transaction relating to any shares of Common Stock of the Company or other
capital stock of the Company owned by the Selling Shareholder will be made for a
period of 180 days after the date of this Agreement, directly or indirectly, by
such Selling Shareholder except with the prior written consent of Deutsche Bank
Securities Inc. ("Lockup Agreements") and except that such Selling Shareholder
may transfer any or all of the Common Stock subject to the Lockup Agreements (a)
by gift, will or intestacy, (b) to such Selling Shareholder's partners,
shareholders, members or affiliates and (iii) if such Selling Shareholder is an
individual, to such Selling Shareholder's immediate family or to a trust, the
beneficiaries of which are exclusively such Selling Shareholder and/or members
of such Selling Shareholder's immediate family; provided, however, that in any
such case it shall be a condition to the transfer that the transferee execute an
agreement stating that the transferee is receiving and holding the Common Stock
subject to the provisions of the Lockup Agreements, and there shall be no
further transfer of such Common Stock except in accordance with the Lockup
Agreements

(ii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance Act of
1983 with respect to the transactions herein contemplated, each of the Selling
Shareholders agrees to deliver to you prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-8 or W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).

(iii) Except for the execution and delivery of a Lockup
Agreement or as otherwise contemplated herein, such Selling Shareholder will not
take, directly or indirectly, any action designed to cause or result in, or that
has constituted or might reasonably be expected to constitute, the stabilization
or manipulation of the price of any securities of the Company.

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<PAGE> 14

5. COSTS AND EXPENSES.

The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Sellers under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for the
Company and the Selling Shareholders; the cost of printing and delivering to, or
as requested by, the Underwriters copies of the Registration Statement,
Preliminary Prospectuses, the Prospectus, this Agreement, the Underwriters'
Selling Memorandum, the Underwriters' Invitation Letter, the Listing
Application, the Blue Sky Survey and any supplements or amendments thereto; the
filing fees of the Commission; the filing fees and expenses (including legal
fees and disbursements) incident to securing any required review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Shares; the Listing Fee of the Nasdaq Stock Market; and the expenses,
including the fees and disbursements of counsel for the Underwriters, incurred
in connection with the qualification of the Shares under State securities or
Blue Sky laws. Any transfer taxes imposed on the sale of the Shares to the
several Underwriters will be paid by the Sellers pro rata. The Company agrees to
pay all costs and expenses of the Underwriters, including the fees and
disbursements of counsel for the Underwriters, incident to the offer and sale of
directed shares of the Common Stock by the Underwriters to employees and persons
having business relationships with the Company and its Subsidiaries. The Sellers
shall not, however, be required to pay for any of the Underwriters expenses
(other than those related to qualification under (i) NASD regulation, (ii) State
securities or Blue Sky laws, and (iii) foreign securities laws) except that, if
this Agreement shall not be consummated because the conditions in Section 6
hereof are not satisfied, or because this Agreement is terminated by the
Representatives pursuant to Section 11 hereof, or by reason of any failure,
refusal or inability on the part of the Company or the Selling Shareholders to
perform any undertaking or satisfy any condition of this Agreement or to comply
with any of the terms hereof on their part to be performed, unless such failure
to satisfy said condition or to comply with said terms be due to the default or
omission of any Underwriter, then the Company shall reimburse the several
Underwriters for reasonable out-of-pocket expenses, including reasonable fees
and disbursements of counsel, reasonably incurred in connection with
investigating, marketing and proposing to market the Shares or in contemplation
of performing their obligations hereunder; but the Company and the Selling
Shareholders shall not in any event be liable to any of the several Underwriters
for damages on account of loss of anticipated profits from the sale by them of
the Shares.

6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.

The several obligations of the Underwriters to purchase the
Firm Shares on the Closing Date and the Option Shares, if any, on the Option
Closing Date are subject to the accuracy, as of the Closing Date or the Option
Closing Date, as the case may be, of the representations and warranties of the
Company and the Selling Shareholders contained herein, and to the performance by
the Company and the Selling Shareholders of their covenants and obligations
hereunder and to the following additional conditions:

(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all filings required
by Rule 424 and Rule 430A of the Rules and Regulations shall have been made, and
any request of the Commission for additional information

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<PAGE> 15

(to be included in the Registration Statement or otherwise) shall have been
disclosed to the Representatives and complied with to their reasonable
satisfaction. No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been taken or, to the knowledge of the
Company or the Selling Shareholders, shall be contemplated by the Commission and
no injunction, restraining order, or order of any nature by a Federal or state
court of competent jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance of the Shares.

(b) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of Hale and
Dorr LLP, counsel for the Company and counsel for SS&C Technologies, Inc.,
Durham Cam, Inc. and the Selling Shareholders who are natural persons
(collectively, the "Designated Selling Shareholders"), dated the Closing Date or
the Option Closing Date, as the case may be, addressed to the Underwriters (and
stating that it may be relied upon by counsel to the Underwriters) to the effect
that:

(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement; DC Systems,
Inc. ("DCS") has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement; the Company and DCS are
duly qualified to transact business in the respective jurisdictions indicated on
a schedule to such opinion; and the outstanding shares of capital stock of DCS
have been duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Company ; and, to such counsel's knowledge,
the outstanding shares of capital stock of DCS are owned free and clear of all
liens, encumbrances and equities and claims, and no options, warrants or other
rights to purchase, agreements or other obligations to issue or other rights to
convert any obligations into any shares of capital stock or of ownership
interests in DCS are outstanding.

(ii) The Company has authorized and outstanding capital stock
as set forth under the caption "Capitalization" in the Prospectus; the
authorized shares of the Company's Common Stock have been duly authorized; the
outstanding shares of the Company's Common Stock, including the Shares to be
sold by the Selling Shareholders, have been duly authorized and validly issued
and are fully paid and non-assessable; all of the Shares conform to the
description thereof contained in the Prospectus; the certificates for the
Shares, assuming they are in the form filed with the Commission, are in due and
proper form; the shares of Common Stock, including the Option Shares, if any, to
be sold by the Company pursuant to this Agreement have been duly authorized and
will be validly issued, fully paid and non-assessable when issued and paid for
as contemplated by this Agreement; and, to such counsel's knowledge, no
preemptive rights of stockholders exist with respect to any of the Shares or the
issue or sale thereof.

(iii) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no outstanding
securities of the Company convertible or exchangeable into or evidencing the
right to purchase or subscribe for any shares of capital stock of the Company
and there are no outstanding or authorized options, warrants or rights of any
character obligating the Company to issue any shares of its capital stock or any
securities convertible or exchangeable into

<PAGE> 16
or evidencing the right to purchase or subscribe for any shares of such stock;
and except as described in the Prospectus, to the knowledge of such counsel, no
holder of any securities of the Company or any other person has the right,
contractual or otherwise, which has not been satisfied or effectively waived, to
cause the Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, any of the Shares or the right to have any Common Stock
or other securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement, to require
registration under the Act of any shares of Common Stock or other securities of
the Company.

(iv) The Registration Statement has become effective under the
Act and, to the knowledge of such counsel, no stop order proceedings with
respect thereto have been instituted or are pending or threatened under the Act.

(v) The Registration Statement, the Prospectus and each
amendment or supplement thereto comply as to form in all material respects with
the requirements of the Act, and the applicable rules and regulations thereunder
(except that such counsel need express no opinion as to the financial
statements, schedules and statistical information therein).

(vi) The statements under the captions "Description of Capital
Stock" and "Shares Eligible for Future Sale" in the Prospectus, insofar as such
statements constitute a summary of documents referred to therein or matters of
law, fairly summarize in all material respects the information called for with
respect to such documents and matters.

(vii) Such counsel does not know of any contracts or documents
required to be filed as exhibits to the Registration Statement or described in
the Registration Statement or the Prospectus which are no so filed or described
as required, and such contracts and documents as are summarized in the
Registration Statement or the Prospectus are fairly summarized in all material
respects.

(viii) Such counsel knows of no material legal or United
States governmental proceedings pending or threatened against the Company or DCS
except as set forth in the Prospectus.

(ix) The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions herein
contemplated do not and will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, the Certificate of
Incorporation (or other organizational documents) or Bylaws of the Company or
DCS, or any agreement or instrument to which the Company or DCS is a party or by
which the Company or DCS may be bound.

(x) This Agreement has been duly authorized, executed and
delivered by the Company.

(xi) No approval, consent, order, authorization, designation,
declaration or filing by or with any United States regulatory, administrative or
other governmental body is necessary in connection with the execution and
delivery of this Agreement and the consummation of the

16
<PAGE> 17

transactions herein contemplated (other than as may be required by the NASD or
as required by State securities and Blue Sky laws as to which such counsel need
express no opinion) except such as have been obtained or made, specifying the
same.

(xii) The Company is not, and will not become, as a result of
the consummation of the transactions contemplated by this Agreement, and
application of the net proceeds therefrom as described in the Prospectus,
required to register as an investment company under the 1940 Act.

(xiii) This Agreement has been duly authorized, executed and
delivered on behalf of the Designated Selling Shareholders.

(xiv) Each Designated Selling Shareholder has full legal
right, power and authority, and any approval required by law (other than as
required by State securities and Blue Sky laws as to which such counsel need
express no opinion), to sell, assign, transfer and deliver the portion of the
Shares to be sold by such Designated Selling Shareholder.

(xv) The Custody Agreement and the Power of Attorney executed
and delivered by each Designated Selling Shareholder constitute the valid and
binding obligations of such Designated Selling Shareholder, subject to customary
qualifications relating to bankruptcy, fraudulent conveyance and equitable
principle exceptions.

(xvi) Upon the Underwriters obtaining control of the Shares to
be sold by the Designated Selling Shareholders and assuming the Underwriters
purchased such Shares for value and without notice of any adverse claim to such
Shares within the meaning of Section 8-102 of the Uniform Commercial Code as
enacted in the Commonwealth of Massachusetts, the Underwriters will have
acquired all rights of the Designated Selling Shareholders in such Shares free
of any adverse claim, any lien in favor of the Company and any restrictions on
transfer imposed by the Company.

In rendering such opinion, Hale and Dorr LLP may rely as to
matters governed by the laws of states other than The Commonwealth of
Massachusetts, the Delaware General Corporation Law Statute or Federal laws on
local counsel in such jurisdictions and as to the matters set forth in
subparagraphs (xiii), (xiv) and (xv) on representations made by the Designated
Selling Shareholders and on opinions of other counsel representing the
respective Selling Shareholders, provided that in each case Hale and Dorr LLP
shall state that they believe that they and the Underwriters are justified in
relying on such other counsel. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has come to
the attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the Act (but after
giving effect to any modifications incorporated therein pursuant to Rule 430A
under the Act), contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and Regulations and as
of the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements, in the light of the circumstances
under which they are made, not misleading (except that such counsel need express
no view as to financial statements, schedules and

17
<PAGE> 18

statistical information therein). With respect to such statement, Hale and Dorr
LLP may state that their belief is based upon the procedures set forth therein,
but is without independent check and verification.

(c) The Representatives shall have received from Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C., counsel for the Underwriters, an opinion
dated the Closing Date or the Option Closing Date, as the case may be,
substantially to the effect specified in subparagraphs (ii), (iii), (iv), (ix)
and (xi) of Paragraph (b) of this Section 6, and that the Company is a duly
organized and validly existing corporation under the laws of the State of
Delaware. In rendering such opinion, Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., may rely as to all matters governed other than by the laws of the
State of Delaware and the Commonwealth of Massachusetts or Federal laws on the
opinion of counsel referred to in Paragraph (b) of this Section 6. In addition
to the matters set forth above, such opinion shall also include a statement to
the effect that nothing has come to the attention of such counsel which leads
them to believe that (i) the Registration Statement, or any amendment thereto,
as of the time it became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act) as of
the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and (ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact, necessary in order to make the
statements, in the light of the circumstances under which they are made, not
misleading (except that such counsel need express no view as to financial
statements, schedules and statistical information therein). With respect to such
statement, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. may state that
their belief is based upon the procedures set forth therein, but is without
independent check and verification.

(d) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of [NAME(S) OF
COUNSEL], counsel for [NON-U.S. SUBSIDIARIES], dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Underwriters (and
stating that it may be relied upon by counsel to the Underwriters) substantially
to the effect specified in Paragraph (b) of this Section 6.

(e) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of [NAME(S)],
counsel for [CERTAIN ENTITY SELLING SHAREHOLDERS - OCM CAMINUS INVESTMENT, RIT
CAPITAL PARTNERS, AND/OR GFI II], dated the Closing Date or the Option Closing
Date, as the case may be, addressed to the Underwriters (and stating that it may
be relied upon by counsel to the Underwriters) to the effect that:

(i) This Agreement has been duly authorized, executed and
delivered on behalf of such [CERTAIN ENTITY SELLING SHAREHOLDER].

(ii) Each [CERTAIN ENTITY SELLING SHAREHOLDER] has full legal
right and power, and any approval required by law (other than as required by
State securities and Blue Sky laws as to which such counsel need express no
opinion), to sell, assign, transfer and deliver the portion of the Shares to be
sold by such [CERTAIN SELLING SHAREHOLDER].

18
<PAGE> 19

(iii) The Custody Agreement and the Power of Attorney executed
and delivered by each [CERTAIN SELLING SHAREHOLDER] constitute the valid and
binding obligations of such [CERTAIN SELLING SHAREHOLDER], subject to customary
qualifications relating to bankruptcy, fraudulent conveyance and equitable
principle exceptions.

(iv) Upon the Underwriters obtaining control of the Shares to
be sold by the [CERTAIN SELLING SHAREHOLDER] and assuming the Underwriters
purchased such Shares for value and without notice of any adverse claim to such
Shares within the meaning of Section 8-102 of the Uniform Commercial Code as
enacted in the Commonwealth of Massachusetts, the Underwriters will have
acquired all rights of the [CERTAIN SELLING SHAREHOLDER] in such Shares free of
any adverse claim, any lien in favor of the Company and any restrictions on
transfer imposed by the Company.

(e) The Representatives shall have received at or prior to the
Closing Date from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. a
memorandum or summary, in form and substance satisfactory to the
Representatives, with respect to the qualification for offering and sale by the
Underwriters of the Shares under the State securities or Blue Sky laws of such
jurisdictions as the Representatives may reasonably have designated to the
Company.

(f) You shall have received, on each of the date hereof, the
Closing Date and the Option Closing Date, as the case may be, a letter dated the
date hereof, the Closing Date or the Option Closing Date, as the case may be, in
form and substance satisfactory to you, of each of PricewaterhouseCoopers LLP
and Peters Elworthy & Moore confirming that they are independent public
accountants within the meaning of the Act and the applicable published Rules and
Regulations thereunder and stating that in their opinion the financial
statements and schedules examined by them and included in the Registration
Statement comply in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations; and
containing such other statements and information as is ordinarily included in
accountants' "comfort letters" to Underwriters with respect to the financial
statements and certain financial and statistical information contained in the
Registration Statement and Prospectus.

(g) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, a certificate or
certificates of the Chief Executive Officer and the Chief Financial Officer of
the Company to the effect that, as of the Closing Date or the Option Closing
Date, as the case may be, each of them severally represents as follows:

(i) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceedings for such purpose have been taken or are, to
his knowledge, contemplated by the Commission;

(ii) The representations and warranties of the Company
contained in Section 1 hereof are true and correct as of the Closing Date or the
Option Closing Date, as the case may be;

(iii) All filings required to have been made pursuant to Rules
424 or 430A under the Act have been made;

19
<PAGE> 20

(iv) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole or the earnings, business,
management, properties, assets, operations, financial condition or business
prospects of the Company and the Subsidiaries taken as a whole, whether or not
arising in the ordinary course of business.

(h) The Company and the Selling Shareholders shall have
furnished to the Representatives such further certificates and documents
confirming the representations and warranties, covenants and conditions
contained herein and related matters as the Representatives may reasonably have
requested.

(i) The Firm Shares and Option Shares, if any, have been
approved for listing upon notice of issuance on the Nasdaq National Market.

(j) The Lockup Agreements described in Section 4 (a)(ix) are
in full force and effect.

The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects satisfactory to the Representatives and to Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel for the Underwriters.

If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Representatives by notifying the Company and the Selling Shareholders of
such termination in writing or by telecopy at or prior to the Closing Date or
the Option Closing Date, as the case may be.

In such event, the Selling Shareholders, the Company and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 8 hereof).

7. CONDITIONS OF THE OBLIGATIONS OF THE SELLERS.

The obligations of the Sellers to sell and deliver the portion
of the Shares required to be delivered as and when specified in this Agreement
are subject to the conditions that at the Closing Date or the Option Closing
Date, as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.

8. INDEMNIFICATION.

(a) The Company and each of the Selling Shareholders listed on
Schedule IV hereto (the "Management Selling Shareholders"), jointly and
severally, agree:

20
<PAGE> 21

(i) to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities to which such Underwriter or
any such controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (A) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, (B) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances in which
they were made, or (C) any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (A) or (B) above (provided, that the Company shall not be
liable under this clause (C) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct); provided, however, that the Company and the
Management Selling Shareholders will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement, or omission or alleged
omission, made in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof; and provided
further, however, that neither the Company nor any of the Management Selling
Shareholders shall be liable to any Underwriter under this Section 8(a) with
respect to any Preliminary Prospectus to the extent that any such loss, claim,
damage or liability of such Underwriter results from an untrue statement of a
material fact contained in, or the omission of a material fact from, such
Preliminary Prospectus, which untrue statement or omission was corrected in the
Prospectus if such Underwriter sold shares to the person alleging such loss,
claim, damage or liability without sending or giving, at or prior to the written
confirmation of such sale, a copy of the Prospectus if the Company had
previously furnished copies thereof to such Underwriter. In no event, however,
shall the liability of any Management Selling Shareholder for indemnification
under this Section 8(a) exceed the proceeds received by such Management Selling
Shareholder in the offering. This indemnity obligation will be in addition to
any liability which the Company or the Management Selling Shareholders may
otherwise have.

(ii) to reimburse each Underwriter and each such controlling
person upon demand for any legal or other out-of-pocket expenses reasonably
incurred by such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or United States or foreign
governmental inquiry related to the offering of the Shares, whether or not such
Underwriter or controlling person is a party to any action or proceeding. In the
event that it is finally judicially determined that the Underwriters were not
entitled to receive payments for legal and other expenses pursuant to this
subparagraph, the Underwriters will promptly return all sums that had been
advanced pursuant hereto.

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<PAGE> 22

(b) Each of the Selling Shareholders not listed on Schedule IV
hereto (the "Non- Management Selling Shareholders"), severally and not jointly,
agrees to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of the Act, against any losses,
claims, damages or liabilities to which such Underwriter or any such controlling
person may become subject under the Act or otherwise to the same extent as
indemnity is provided by the Company pursuant to Section 8(a) above, provided,
however, that a Non-Management Selling Shareholder shall be liable only to the
extent that such untrue statement or alleged untrue statement or such omission
or alleged omission has been made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with written information furnished to the Company by such
Non-Management Selling Shareholder specifically for use in preparation thereof;
and provided further that the Non-Management Selling Shareholders shall not be
liable to any Underwriter under this Section 8(b) with respect to any
Preliminary Prospectus to the extent that any such loss, claim, damage or
liability of such Underwriter results from an untrue statement of a material
fact contained in, or the omission of a material fact from, such Preliminary
Prospectus, which untrue statement or omission was corrected in the Prospectus,
if such Underwriter sold Shares to the person alleging such loss, claim, damage
or liability without sending or giving, at or prior to the written confirmation
of such sale, a copy of the Prospectus if the Company had previously furnished
copies thereof to such Underwriter. In no event, however, shall the liability of
any Non-Management Selling Shareholder for indemnification under this Section
8(b) exceed the proceeds received by such Non-Management Selling Shareholder
from the Underwriters in the offering. This indemnity obligation will be in
addition to any liability which the Non-Management Selling Shareholder may
otherwise have.

(c) Each Underwriter severally and not jointly will indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed the Registration Statement, the Selling Shareholders, and each
person, if any, who controls the Company or the Selling Shareholders within the
meaning of the Act, against any losses, claims, damages or liabilities to which
the Company or any such director, officer, Selling Shareholder or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto or
(ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made; and
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer, Selling Shareholder or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding or in responding to a subpoena or United States
or foreign governmental inquiry relating to the offering of Shares, whether or
not the Company or such director, officer, Selling Shareholder or controlling
person is a party to any action or proceeding; provided, however, that each
Underwriter will be liable in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or such amendment or supplement, in reliance upon and
in conformity with written information furnished to the Company by or through
the Representatives

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<PAGE> 23

specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which such Underwriter may otherwise have.

(d) In case any proceeding (including any United States or
foreign governmental investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to this Section 8, such person
(the "indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a), (b) or (c) shall be available to
any party who shall fail to give notice as provided in this Section 8(d) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may have to
the indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a), (b) or (c). In case any such proceeding shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 30 days of presentation) the reasonable fees and
expenses of the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel reasonably acceptable to the indemnified party within a reasonable
period of time after notice of commencement of the action. It is understood that
the indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you in the case of parties indemnified
pursuant to Section 8(a) or (b) and by the Company and the Selling Shareholders
in the case of parties indemnified pursuant to Section 8(c). The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. In addition, the indemnifying party will not, without
the prior written consent of the indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action
or proceeding of which indemnification may be sought hereunder (whether or not
any indemnified party is an actual or potential party to such claim, action or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action or proceeding. The indemnifying party shall not be liable
for any settlement of any proceeding effected by the indemnified party without
the prior written consent of the indemnifying party.

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<PAGE> 24

(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Selling Shareholders on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling Shareholders
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Shareholders on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(e) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 8(e). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to above in this Section 8(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (e), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, (ii) no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation, and (iii) no
Selling Shareholder shall be required to contribute any amount in excess of the
proceeds received by such Selling Shareholder from the Underwriters in the
offering. The Underwriters' obligations in this Section 8(e) to contribute are
several in proportion to their respective underwriting obligations and not
joint.

(f) In any proceeding relating to the Registration Statement,
any Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this Section 8
hereby consents to the jurisdiction of any court having jurisdiction over any
other contributing party, agrees that process issuing from such court

24
<PAGE> 25

may be served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.

(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred, provided,
however, that in the event a court of competent jurisdiction determines that the
indemnified party is not entitled to such indemnification, the indemnifying
party shall reimburse the indemnifying party on demand. The indemnity and
contribution agreements contained in this Section 8 and the representations and
warranties of the Company set forth in this Agreement shall remain operative and
in full force and effect, regardless of (i) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter, the
Company, its directors or officers or any persons controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter, or to the
Company, its directors or officers, or any person controlling the Company, shall
be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.

9. DEFAULT BY UNDERWRITERS.

If on the Closing Date or the Option Closing Date, as the case
may be, any Underwriter shall fail to purchase and pay for the portion of the
Shares which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company or a Selling
Shareholder), you, as Representatives of the Underwriters, shall use your
reasonable efforts to procure within 36 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Shareholders such amounts as may be agreed upon and upon the terms set forth
herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during such 36
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter or Underwriters failed to purchase, or (b) if
the aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, the Company and the
Selling Shareholders or you as the Representatives of the Underwriters will have
the right, by written notice given within the next 36-hour period to the parties
to this Agreement, to terminate this Agreement without liability on the part of
the non-defaulting Underwriters or of the Company or of the Selling Shareholders
except to the extent provided in Section 8 hereof. In the event of a default by
any Underwriter or Underwriters, as set forth in this Section 9, the Closing
Date or Option Closing Date, as the case may be, may be postponed for such
period, not exceeding seven days, as you, as Representatives, may determine in

25
<PAGE> 26

order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.

10. NOTICES.

All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to Deutsche Bank
Securities Inc., One South Street, Baltimore, Maryland 21202, Attention:
_____________; with a copy to Deutsche Bank Securities Inc., One Bankers Trust
Plaza, 130 Liberty Street, New York, New York 10006, Attention: General
Counsel; if to the Company or the Selling Shareholders, to Caminus Corporation,
747 Third Avenue, New York, NY 10017, Attn: Chief Executive Officer.

11. TERMINATION.

(a) This Agreement may be terminated by you by notice to the
Sellers at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company and its Subsidiaries taken as
a whole or the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business, (ii) any outbreak or escalation of hostilities or declaration of
war or national emergency or other national or international calamity or crisis
or change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make it
impracticable or inadvisable to market the Shares or to enforce contracts for
the sale of the Shares, or (iii) suspension of trading in securities generally
on the New York Stock Exchange or the American Stock Exchange or limitation on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such Exchange, (iv) the enactment, publication, decree or
other promulgation of any United States or foreign statute, regulation, rule or
order of any court or other governmental authority which in your opinion
materially and adversely affects or may materially and adversely affect the
business or operations of the Company, (v) declaration of a banking moratorium
by United States or New York State authorities, (vi) any downgrading, or
placement on any watch list for possible downgrading, in the rating of the
Company's debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Exchange Act);
(vii) the suspension of trading of the Company's Common Stock by the Nasdaq
Stock Market, the Commission, or any other United States or foreign governmental
authority or, (viii) the taking of any action by any United States or foreign
governmental body or agency in respect of its monetary or fiscal affairs which
in your reasonable opinion has a material adverse effect on the securities
markets in the United States; or

(b) as provided in Sections 6 and 9 of this Agreement.

26
<PAGE> 27

12. SUCCESSORS.

This Agreement has been and is made solely for the benefit of
the Underwriters, the Company and the Selling Shareholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign merely because of such
purchase.

13. INFORMATION PROVIDED BY UNDERWRITERS.

The Company, the Selling Shareholders and the Underwriters
acknowledge and agree that the only information furnished or to be furnished by
any Underwriter to the Company for inclusion in any Prospectus or the
Registration Statement consists of the legends required by Item 502(b) of
Regulation S-K under the Act and the information under the caption
"Underwriting" in the Prospectus.

14. MISCELLANEOUS.

The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers and (c) delivery of and payment for the Shares under
this Agreement.

This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.

If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholders, the
Company and the several Underwriters in accordance with its terms.

27
<PAGE> 28

Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Shareholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-Fact to take
such action.

Very truly yours,

CAMINUS CORPORATION

By:_________________________________________

Selling Shareholders listed on Schedule II

By:_________________________________________
Attorney-in-fact

The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.

DEUTSCHE BANK SECURITIES INC.

BEAR, STEARNS & CO. INC.

CIBC WORLD MARKETS CORP.

As Representatives of the several
Underwriters listed on Schedule I

By: DEUTSCHE BANK SECURITIES INC.

By:_________________________________________
Authorized Officer

28
<PAGE> 29

EXHIBIT A

Subsidiaries

<TABLE>
<CAPTION>
Company Jurisdiction "Significant Subsidiary"
- ------- ------------ ------------------------

<S> <C> <C>
Caminus Limited United Kingdom [Yes/No]

DC Systems, Inc. Texas [Yes/No]

Caminus Energy Limited United Kingdom [Yes/No]

Zai*Net Software Limited United Kingdom [Yes/No]

Caminus Consultants Limited United Kingdom [Yes/No]

DCS*Gasnet Corporation Texas [Yes/No]

Caminus/DC Acquisition Corp. Delaware [Yes/No]

</TABLE>

29
<PAGE> 30

SCHEDULE I

SCHEDULE OF UNDERWRITERS

Number of Firm Shares
Underwriter to be Purchased
----------- ---------------

<S> <C>
Deutsche Bank Securities Inc.
Bear, Stearns & Co. Inc.
CIBC World Markets Corp.

----------

Total 4,372,000
</TABLE>

30
<PAGE> 31

SCHEDULE II

SCHEDULE OF SELLING SHAREHOLDERS

Selling Shareholder Number of Firm Shares to be Sold
------------------- --------------------------------

<S> <C>
OCM Principal Opportunities Fund, L.P. 434,657
RIT Capital Partners plc 114,015
Nigel L. Evans 89,455
Michael B. Morrison 59,637
GFI Two LLC 45,935
Durham Enterprises Limited 28,361
SS&C Technologies, Inc. 27,705
--------------

Total 799,765
</TABLE>

31
<PAGE> 32

SCHEDULE III

SCHEDULE OF OPTION SHARES

Maximum Number Percentage of
of Option Shares Total Number of
Name of Seller to be Sold Option Shares
- ---------------------------------------- -------------------------------------- -----------------------------
<S> <C> <C>
Caminus Corporation 515,884 78.7%
Simon Young 59,788 9.1%
David M. Stoner 50,488 7.7%
Richard Couron 13, 883 2.1%
Serena Hesmondalgh 9,163 1.4%
OCM Principal Opportunities Fund, L.P. 6,594 1.0%
----- ----
Total 655,800 100%
</TABLE>

32
<PAGE> 33

SCHEDULE IV

Management Selling Shareholders

[TO BE DETERMINED]
33

<PAGE> 1

EXHIBIT 2.1

MERGER AGREEMENT

MERGER AGREEMENT, dated this 17th day of December, 1999 is made among
Caminus Corporation, a Delaware corporation having its principal place of
business at 747 Third Avenue, New York, New York 10017 (the "Surviving
Company"), Caminus Merger LLC, a Delaware limited liability company and a wholly
owned subsidiary of the Surviving Company having its principal place of business
at 747 Third Avenue, New York, New York 10017 (the "Transitory Subsidiary"), and
Caminus LLC, a Delaware limited liability company having its principal place of
business at 747 Third Avenue, New York, New York 10017 (the "Company").

In consideration of the undertakings herein contained and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

ARTICLE I

MERGER OF THE TRANSITORY SUBSIDIARY
WITH AND INTO THE COMPANY

1.1 MERGER. The Transitory Subsidiary shall be merged with and into
the Company pursuant to Section 18-209 of the Delaware Limited Liability Company
Act. The Company shall survive the merger contemplated by this Section 1.1 and
shall continue to be governed by the laws of Delaware. The separate existence of
the Transitory Subsidiary shall cease forthwith at the First Merger Effective
Time (as defined below). The merger of the Transitory Subsidiary with and into
the Company shall herein be referred to as the "First Merger."

1.2 MANAGEMENT COMMITTEE AND BOARD APPROVAL. The Management
Committee of the Company has approved this Agreement and the First Merger in
accordance with the Delaware Limited Liability Company Act. The Board of
Directors of the Surviving Company has authorized the execution and performance
of this Agreement by the Surviving Company, including the issuance of the Shares
(as defined below) and the assumption of the Options (as defined below) as
contemplated by the First Merger, in accordance the General Corporation Law of
the State of Delaware.

1.3 MEMBER AND STOCKHOLDER APPROVAL. As soon as practicable after
the execution of this Agreement, the Company shall submit this Agreement to its
members (the "Members") for their approval. The Surviving Company, as the sole
member of the Transitory Subsidiary, has approved this Agreement and the First
Merger pursuant to Section 18-209 of the Delaware Limited Liability Company Act.
The Company, as the sole stockholder of the Surviving Company, has approved the
execution and performance of this Agreement by the Surviving Company, including
the issuance of

<PAGE> 2

the Shares as contemplated by the First Merger, pursuant to Section 228 of the
General Corporation Law of the State of Delaware.

1.4 FIRST MERGER EFFECTIVE TIME. The First Merger shall be
effective upon the filing of this Agreement or a Certificate of Merger with the
Secretary of State of the State of Delaware, which filing shall be made as soon
as practicable after all required member and stockholder approvals have been
obtained. The time of such effectiveness shall herein be referred to as the
"First Merger Effective Time."

1.5 CONVERSION OF MEMBERSHIP INTERESTS OF THE COMPANY. At the First
Merger Effective Time, by virtue of the First Merger and without any action on
the part of the Surviving Company, the Transitory Subsidiary, the Company, any
Member or any other person, each share of Membership Interest (as defined in the
Limited Liability Company Agreement of the Company, dated May 12, 1998, as
amended (the "LLC Agreement")) of the Company issued and outstanding immediately
prior to the First Merger Effective Time shall be converted into and represent
the right to receive .095238 (the "Conversion Ratio") of one share of common
stock, $0.01 par value per share (the "Common Stock"), of the Surviving Company
(collectively, the "Shares").

1.6 FRACTIONAL SHARES. No certificates or scrip representing
fractional Shares shall be issued to former Members, and such former Members
shall not be entitled to any voting rights, rights to receive any dividends or
distributions or other rights as a stockholder of the Surviving Company with
respect to any fractional Shares that would have otherwise been issued to such
former Members. In lieu of any fractional Shares that would have otherwise been
issued, each former Member that would have been entitled to receive a fractional
Share shall receive such whole number of Shares as is equal to the precise
number of Shares to which such person would be entitled, rounded up or down to
the nearest whole number (with a fractional interest equal to .5 rounded to the
nearest odd number); provided that each such holder shall receive at least one
Share.

1.7 OPTIONS AND WARRANTS.

(a) As of the First Merger Effective Time, all outstanding
options or other rights to purchase shares of Membership Interests of the
Company (the "Outstanding Options"), whether vested or unvested, shall be
assumed by the Surviving Company. Immediately after the First Merger Effective
Time, each Option outstanding at the First Merger Effective Time shall be deemed
to constitute an option to acquire, on the same terms and conditions as were
applicable under such Option immediately prior to the First Merger Effective
Time, such number of shares of Common Stock as is equal to the number of shares
of Membership Interest subject to the unexercised portion of such Option
multiplied by the Conversion Ratio (with any fraction resulting from such
multiplication to be rounded down to the nearest whole number). The exercise
price per share of each such assumed Option shall be equal to the exercise price
of such Option immediately prior to the First Merger Effective Time, divided by
the Conversion Ratio (rounded up to the nearest whole cent). The term,
exercisability, vesting schedule

2
<PAGE> 3

and all of the other terms of the Options shall otherwise remain unchanged. As
of the First Merger Effective Time, the Surviving Company shall assume the 1998
Stock Incentive Plan of the Company, including all rights and obligations of the
Company thereunder.

(b) As soon as practicable after the First Merger Effective
Time, the Surviving Company shall deliver to the holders of Options appropriate
notices setting forth such holders' rights pursuant to such Options, as amended
by this Section 1.7, and the agreements evidencing such Options shall continue
in effect on the same terms and conditions (subject to the amendments provided
for in this Section 1.7 and such notice).

1.8 NO FURTHER RIGHTS. From and after the First Merger Effective
Time, no shares of any series of Membership Interest that are outstanding
immediately prior to the First Merger Effective Time shall be deemed to be
outstanding, and the former holders thereof will cease to have any rights with
respect thereto, except as provided herein or by law.

1.9 EXISTING SHARES OF MEMBERSHIP INTEREST OF THE TRANSITORY
SUBSIDIARY. Each membership interest of the Transitory Subsidiary immediately
prior to the First Merger Effective Time shall be converted into and thereafter
evidence one share of Membership Interest of the Company.

1.10 EXISTING SHARES OF SURVIVING COMPANY. Each share of Common
Stock of the Surviving Company issued and outstanding immediately prior to the
First Merger Effective Time shall be canceled and no consideration shall be paid
therefor.

1.11 EXISTING SHARES OF MEMBERSHIP INTEREST IN THE COMPANY. Each
Membership Interest of the Company owned beneficially by the Surviving Company
shall be cancelled and no consideration shall be paid therefor.

1.12 LIMITED LIABILITY COMPANY AGREEMENT. At the First Merger
Effective Time, without any action on the part of the Company or any other party
thereto, the LLC Agreement shall be terminated and shall be of no further force
or effect; provided, however, that the provisions of Article IV of Appendix B of
the LLC Agreement shall survive such termination, and the obligations of the
Company thereunder shall be assumed by the Surviving Company.

1.13 OFFICERS. The officers of the Company as of the First Merger
Effective Time shall continue in office as officers of the Company following the
First Merger Effective Time until the expiration of their respective terms of
office and until their successors have been duly elected and qualified.

ARTICLE II

MERGER OF THE COMPANY
WITH AND INTO THE SURVIVING COMPANY

2.1 MERGER. Immediately following the First Merger Effective Time,
the Company shall be merged with and into the Surviving Company pursuant to
Section 18-209 of the Delaware Limited Liability Company Act and Section 264 of
the General Corporation Law of the State of Delaware. The Surviving Company
shall survive the

3
<PAGE> 4

merger contemplated by this Section 2.1 and shall continue to be governed by the
laws of Delaware. The separate existence of the Company shall cease at the
Second Merger Effective Time (as defined below). The merger of the Company with
and into the Surviving Company shall herein be referred to as the "Second
Merger."

2.2 BOARD APPROVAL. The Board of Directors of the Surviving Company
has approved this Agreement and the Merger in accordance the General Corporation
Law of the State of Delaware.

2.3 MEMBER APPROVAL. The Surviving Company, as the sole member of
the Company immediately prior to the Second Merger Effective Time, will approve
this Agreement and the Second Merger pursuant to Section 18-209 of the Delaware
Limited Liability Company Act. Approval by the stockholders of the Surviving
Company shall not be required pursuant to Sections 251 and 264 of the General
Corporation Law of the State of Delaware.

2.4 EFFECTIVE TIME. The Second Merger shall be effective upon the
filing of this Agreement or a Certificate of Merger with the Secretary of State
of the State of Delaware, which filing shall be made as soon as practicable
after the First Merger Effective Time. The time of such effectiveness shall
herein be referred to as the "Second Merger Effective Time."

2.5 CONVERSION OF MEMBERSHIP INTERESTS OF THE COMPANY. At the
Second Merger Effective Time, by virtue of the Second Merger and without any
action on the part of the Surviving Company, the Company or any other person,
each share of Membership Interest of the Company issued and outstanding
immediately prior to the Second Merger Effective Time shall be canceled and no
consideration shall be paid therefor.

2.6 SUCCESSION. As of the Second Merger Effective Time, the
Surviving Company shall succeed to all of the rights, privileges, debts,
liabilities, powers and property of the Company in the manner of and as more
fully set forth in Section 18-209(g) of the Delaware Limited Liability Company
Act and Section 259 of the Delaware General Corporation Law. Without limiting
the foregoing, at the Second Merger Effective Time, all property, rights,
privileges, franchises, patents, trademarks, licenses, registrations and other
assets of every kind and description of the Company shall be transferred to,
vested in and devolved upon the Surviving Company without further act or deed
and all property, rights and every other interest of the Company and the
Surviving Company shall be as effectively the property of the Surviving Company
as they were of the Company and the Surviving Company, respectively. All rights
of creditors of the Company and all liens upon any property of the Company shall
be preserved unimpaired, and all debts, liabilities and duties of the Company,
including, without limitation, all liabilities and duties of the Company shall
attach to the Surviving Company and may be enforced against it to the same
extent as if said debts, liabilities and duties had been incurred or contracted
by it. At the Second Merger Effective Time, the Surviving Company shall enter
into an escrow agreement in substantially the form

4
<PAGE> 5

attached as Exhibit A to that certain Purchase Agreement, dated as of July 30,
1999, among the Company, Caminus/DC Acquisition Corp., DC Systems, Inc. and
certain shareholders of DC Systems, Inc.

2.7 CERTIFICATE OF INCORPORATION AND BY-LAWS. The Certificate of
Incorporation of the Surviving Company in effect as of the Second Merger
Effective Time shall continue to be the Certificate of Incorporation of the
Surviving Company until further amended in accordance with the provisions
thereof and applicable law. The By-Laws of the Surviving Company in effect as of
the Second Merger Effective Time shall continue to be the By-Laws of the
Surviving Company until amended in accordance with the provisions thereof and
applicable law.

2.8 DIRECTORS AND OFFICERS. The members of the Board of Directors
and the officers of the Surviving Company as of the Second Merger Effective Time
shall continue in office until the expiration of their respective terms of
office and until their successors have been duly elected and qualified.

ARTICLE III

MISCELLANEOUS

3.1 FURTHER ASSURANCES. From time to time, as and when required by
the Surviving Company or by its successors and assigns, there shall be executed
and delivered on behalf of the Company such deeds and other instruments, and
there shall be taken or caused to be taken by it such further and other action,
as shall be appropriate or necessary in order to vest or perfect in or to
confirm of record or otherwise in the Surviving Company the title to and
possession of all the property, interests, assets, rights, privileges,
immunities, powers, franchises and authority of the Company, and otherwise to
carry out the purposes of this Agreement, and the officers and directors of the
Company are fully authorized in the name and on behalf of the Company or
otherwise to take any and all such action and to execute and deliver any and all
such deeds and other instruments.

3.2 AMENDMENT AND TERMINATION. This Agreement may be amended by the
Management Committee of the Company, the sole member of the Transitory
Subsidiary and the Board of Directors of the Surviving Company at any time prior
to the First Merger Effective Time, provided that an amendment made subsequent
to the approval of this Agreement by the Members of the Company shall not (i)
alter or change the amount or kind of shares, membership interests, securities,
cash, property and/or rights to be received in exchange for or on conversion of
all or any of the shares or membership interests, of any class or series thereof
of such entity, (ii) alter or change any term of the Certificate of
Incorporation of the Surviving Company to be effected by the Second Merger or
(iii) alter or change any of the terms and conditions of this Agreement if such
alteration or change would adversely affect the holders of any class or series
of the stock or membership interest of such entity. This Agreement may be

5
<PAGE> 6

terminated at any time prior to First Merger Effective Time by the vote of the
Management Committee of the Company, the sole member of the Transitory
Subsidiary or the Board of Directors of the Surviving Company, notwithstanding
prior approval of this Agreement by the Members of the Company, the sole member
of the Transitory Subsidiary or the stockholders of the Surviving Company.

3.3 COUNTERPARTS. This Agreement, may be executed in any number of
counterparts, each of which shall be deemed to be an original.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

6
<PAGE> 7

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and attested on its behalf by its officers thereunto
duly authorized, as of the date first above written.

THE SURVIVING COMPANY:

CAMINUS CORPORATION,
a Delaware corporation

By: /s/ David M. Stoner
------------------------------------
David M. Stoner
President

THE TRANSITORY SUBSIDIARY:

CAMINUS MERGER LLC,
a Delaware limited liability company

By: /s/ David M. Stoner
------------------------------------
David M. Stoner
Authorized Signatory

THE COMPANY:

CAMINUS LLC,
a Delaware limited liability company

By: /s/ David M. Stoner
------------------------------------
David M. Stoner
Authorized Signatory

7
<PAGE> 8
I, Mark A. Herman, Secretary of Caminus Corporation, a corporation
organized and existing under the laws of the State of Delaware, hereby certify
that the Agreement to which this certificate is attached has been adopted by a
majority of the votes represented by the outstanding shares of capital stock of
the Surviving Company entitled to vote on this Agreement.

WITNESS my hand on this 17th day of December, 1999.

/s/ Mark A. Herman
---------------------------------
Mark A. Herman, Secretary

I, David M. Stoner, an authorized signatory of Caminus Merger LLC, a
limited liability company organized and existing under the laws of the State of
Delaware, hereby certify that the Agreement to which this certificate is
attached, was approved by the members of said limited liability company
representing at least a majority of the outstanding membership interests of said
limited liability company entitled to vote thereon.

WITNESS my hand on this 17th day of December, 1999.

/s/ David M. Stoner
---------------------------------
David M. Stoner, Authorized Signatory

I, David M. Stoner, an authorized signatory of Caminus LLC, a limited
liability company organized and existing under the laws of the State of
Delaware, hereby certify that the Agreement to which this certificate is
attached, was approved by the members of said limited liability company
representing at least a majority of the outstanding membership interests of said
limited liability company entitled to vote thereon.

WITNESS my hand on this 17th day of December, 1999.

/s/ David M. Stoner
---------------------------------
David M. Stoner, Authorized Signatory

<PAGE> 1

EXHIBIT 10.3

CAMINUS CORPORATION

1999 EMPLOYEE STOCK PURCHASE PLAN

The purpose of this Plan is to provide eligible employees of Caminus
Corporation, a Delaware corporation (the "Company"), and certain of its
subsidiaries with opportunities to purchase shares of the Company's common
stock, $0.01 par value per share (the "Common Stock"). Ninety-five thousand, two
hundred thirty-eight (95,238) shares of Common Stock in the aggregate have been
approved for this purpose. This Plan is intended to qualify as an "employee
stock purchase plan" as defined in Section 423 of the Internal Revenue Code of
1986, as amended (the "Code"), and the regulations promulgated thereunder, and
shall be interpreted consistent therewith.

1. Administration. The Plan will be administered by the Board or by a
Committee appointed by the Board (the "Committee"). The Board or the Committee
has authority to make rules and regulations for the administration of the Plan
and its interpretation and decisions with regard thereto shall be final and
conclusive.

2. Eligibility. All employees of the Company, including Directors who are
employees, and all employees of any subsidiary of the Company (as defined in
Section 424(f) of the Code) designated by the Board or the Committee from time
to time (a "Designated Subsidiary"), are eligible to participate in any one or
more of the offerings of Options (as defined in Section 9) to purchase Common
Stock under the Plan provided that:

(a) they are customarily employed by the Company or a Designated
Subsidiary for more than 20 hours a week and for more than five months in a
calendar year; and

(b) they have been employed by the Company or a Designated Subsidiary
for at least three months prior to enrolling in the Plan; provided,
however, that, with respect to the first Plan Period (as defined below),
the have been employed by the Company or a Designated Subsidiary since
December 31, 1999; and

(c) they are employees of the Company or a Designated Subsidiary on
the first day of the applicable Plan Period (as defined below).

No employee may be granted an option hereunder if such employee,
immediately after the option is granted, owns 5% or more of the total combined
voting power or value of the stock of the Company or any subsidiary. For
purposes of the preceding sentence, the attribution rules of Section 424(d) of
the Code shall apply in

<PAGE> 2

determining the stock ownership of an employee, and all stock which the employee
has a contractual right to purchase shall be treated as stock owned by the
employee.

3. Offerings. The Company will make one or more offerings ("Offerings")
to employees to purchase stock under this Plan. Offerings will begin on such
date or dates as may be established by the Board or the Committee from time to
time (the "Offering Commencement Dates"). Each Offering Commencement Date will
begin a six-month period (a "Plan Period") during which payroll deductions will
be made and held for the purchase of Common Stock at the end of the Plan Period.
The Board or the Committee may, at its discretion, choose a different Plan
Period of twelve (12) months or less for its Offerings.

4. Participation. An employee eligible on the Offering Commencement Date
of any Offering may participate in such Offering by completing and forwarding a
payroll deduction authorization form to the employee's appropriate payroll
office on or before the applicable Offering Commencement Date, as determined by
the Board or the Committee from time to time. The form will authorize a regular
payroll deduction from the Compensation received by the employee during the Plan
Period. Unless an employee files a new form or withdraws from the Plan, his
deductions and purchases will continue at the same rate for future Offerings
under the Plan as long as the Plan remains in effect. The term "Compensation"
means the amount of money reportable on the employee's Federal Income Tax
Withholding Statement, excluding overtime, shift premium, allowances and
reimbursements for expenses such as relocation allowances for travel expenses,
income or gains on the exercise of Company stock options or stock appreciation
rights, and similar items, whether or not shown on the employee's Federal Income
Tax Withholding Statement, but including, in the case of salespersons, sales
commissions to the extent determined by the Board or the Committee.

5. Deductions. The Company will maintain payroll deduction accounts for
all participating employees. With respect to any Offering made under this Plan,
an employee may authorize a payroll deduction, as set forth below, from the
Compensation he or she receives during the Plan Period or such shorter period
during which deductions from payroll are made. Payroll deductions may be at the
rate of 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9% or 10% of Compensation with any
change in compensation during the Plan Period to result in an automatic
corresponding change in the dollar amount withheld.

No employee may be granted an Option (as defined in Section 9) which
permits his rights to purchase Common Stock under this Plan and any other
employee stock purchase plan (as defined in Section 423(b) of the Code) of the
Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the
fair market value of such

-2-

<PAGE> 3

Common Stock (determined at the Offering Commencement Date of the Plan Period)
for each calendar year in which the Option is outstanding at any time.

6. Deduction Changes. An employee may decrease or discontinue his payroll
deduction once during any Plan Period, by filing a new payroll deduction
authorization form. However, an employee may not increase his payroll deduction
during a Plan Period. If an employee elects to discontinue his payroll
deductions during a Plan Period, but does not elect to withdraw his funds
pursuant to Section 8 hereof, funds deducted prior to his election to
discontinue will be applied to the purchase of Common Stock on the Exercise Date
(as defined below).

7. Interest. Interest will not be paid on any employee accounts, except
to the extent that the Board or the Committee, in its sole discretion, elects to
credit employee accounts with interest at such per annum rate as it may from
time to time determine.

8. Withdrawal of Funds. An employee may at any time prior to the close of
business on the last business day in a Plan Period and for any reason
permanently draw out the balance accumulated in the employee's account and
thereby withdraw from participation in an Offering. Partial withdrawals are not
permitted. The employee may not begin participation again during the remainder
of the Plan Period. The employee may participate in any subsequent Offering in
accordance with terms and conditions established by the Board or the Committee.

9. Purchase of Shares. On the Offering Commencement Date of each Plan
Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option ("Option") to purchase on the last business
day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter
provided for, the largest number of whole shares of Common Stock of the Company
as does not exceed the number of shares determined by multiplying $2,083 by the
number of full months in the Plan Period and dividing the result by the closing
price (as defined below) on the Offering Commencement Date of such Plan Period.

The purchase price for each share purchased will be 85% of the closing
price of the Common Stock on (i) the first business day of such Plan Period or
(ii) the Exercise Date, whichever closing price shall be less. Such closing
price shall be (a) the closing price on any national securities exchange on
which the Common Stock is listed, (b) the closing price of the Common Stock on
the Nasdaq National Market or (c) the average of the closing bid and asked
prices in the over-the-counter-market, whichever is applicable, as published in
The Wall Street Journal. If no sales of Common Stock were made on such a day,
the price of the Common Stock for purposes of clauses (a) and (b) above shall be
the reported price for the next preceding day on which sales were made.
Notwithstanding the foregoing, in the event the first business day of a Plan
Period is the

-3-

<PAGE> 4

effective date of the Registration Statement on Form S-1 relating to the
Company's initial public offering of Common Stock, the closing price for such
first business day shall be deemed to be the initial public offering price of
the Common Stock.

Each employee who continues to be a participant in the Plan on the Exercise
Date shall be deemed to have exercised his Option at the Option Price on such
date and shall be deemed to have purchased from the Company the number of full
shares of Common Stock reserved for the purpose of the Plan that his accumulated
payroll deductions on such date will pay for, but not in excess of the maximum
number determined in the manner set forth above.

Any balance remaining in an employee's payroll deduction account at the end
of a Plan Period will be automatically refunded to the employee, except that any
balance which is less than the purchase price of one share of Common Stock will
be carried forward into the employee's payroll deduction account for the
following Offering, unless the employee elects not to participate in the
following Offering under the Plan, in which case the balance in the employee's
account shall be refunded.

10. Issuance of Certificates. Certificates representing shares of Common
Stock purchased under the Plan may be issued only in the name of the employee,
in the name of the employee and another person of legal age as joint tenants
with rights of survivorship, or (in the Company's sole discretion) in the name
of a brokerage firm, bank or other nominee holder designated by the employee.
The Company may, in its sole discretion and in compliance with applicable laws,
authorize the use of book entry registration of shares in lieu of issuing stock
certificates.

11. Rights on Retirement, Death or Termination of Employment. In the event
of a participating employee's termination of employment prior to the last
business day of a Plan Period, no payroll deduction shall be taken from any pay
due and owing to an employee and the balance in the employee's account shall be
paid to the employee or, in the event of the employee's death, (a) to a
beneficiary previously designated in a revocable notice signed by the employee
(with any spousal consent required under state law) or (b) in the absence of
such a designated beneficiary, to the executor or administrator of the
employee's estate or (c) if no such executor or administrator has been appointed
to the knowledge of the Company, to such other person(s) as the Company may, in
its discretion, designate. If, prior to the last business day of the Plan
Period, the Designated Subsidiary by which an employee is employed shall cease
to be a subsidiary of the Company, or if the employee is transferred to a
subsidiary of the Company that is not a Designated Subsidiary, the employee
shall be deemed to have terminated employment for the purposes of this Plan.

-4-

<PAGE> 5

12. Optionees Not Stockholders. Neither the granting of an Option to an
employee nor the deductions from his pay shall constitute such employee a
stockholder of the shares of Common Stock covered by an Option under this Plan
until such shares have been purchased by and issued to him.

13. Transferability; Lock-up. Rights under this Plan are not transferable
by a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee. The Board or the Committee, in its sole discretion, may provide that
shares of Common Stock issuable upon the exercise of an Option may not be sold,
assigned, transferred, pledged or otherwise encumbered by the employee for a
period of up to 180 days from the Exercise Date of the applicable Plan Period
(the "Lock-up Provisions"); provided, however, that all participants exercising
Options during such Plan Period shall be subject to the same Lock-up Provisions;
and provided further, however, that the Company shall provide all participants
in such Plan Period with written notice (including electronic notice) of the
Lock-up Provisions at least 10 days prior to the Exercise Date of such Plan
Period.

14. Application of Funds. All funds received or held by the Company under
this Plan may be combined with other corporate funds and may be used for any
corporate purpose.

15. Adjustment in Case of Changes Affecting Common Stock. In the event of
a subdivision of outstanding shares of Common Stock, or the payment of a
dividend in Common Stock, the number of shares approved for this Plan, and the
share limitation set forth in Section 9, shall be increased proportionately, and
such other adjustment shall be made as may be deemed equitable by the Board or
the Committee. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Board or the
Committee to give proper effect to such event.

16. Merger. If the Company shall at any time merge or consolidate with
another corporation and the holders of the capital stock of the Company
immediately prior to such merger or consolidation continue to hold at least 80%
by voting power of the capital stock of the surviving corporation ("Continuity
of Control"), the holder of each Option then outstanding will thereafter be
entitled to receive at the next Exercise Date upon the exercise of such Option
for each share as to which such Option shall be exercised the securities or
property which a holder of one share of the Common Stock was entitled to upon
and at the time of such merger or consolidation, and the Board or the Committee
shall take such steps in connection with such merger or consolidation as the
Board or the Committee shall deem necessary to assure that the provisions of
Section 15 shall thereafter be applicable, as nearly as reasonably may be, in
relation to the said securities or property as to which such holder of such
Option might thereafter be entitled to receive thereunder.

-5-

<PAGE> 6

In the event of a merger or consolidation of the Company with or into
another corporation which does not involve Continuity of Control, or of a sale
of all or substantially all of the assets of the Company while unexercised
Options remain outstanding under the Plan, (a) subject to the provisions of
clauses (b) and (c), after the effective date of such transaction, each holder
of an outstanding Option shall be entitled, upon exercise of such Option, to
receive in lieu of shares of Common Stock, shares of such stock or other
securities as the holders of shares of Common Stock received pursuant to the
terms of such transaction; or (b) all outstanding Options may be cancelled by
the Board or the Committee as of a date prior to the effective date of any such
transaction and all payroll deductions shall be paid out to the participating
employees; or (c) all outstanding Options may be cancelled by the Board or the
Committee as of the effective date of any such transaction, provided that notice
(including electronic notice) of such cancellation shall be given to each holder
of an Option, and each holder of an Option shall have the right to exercise such
Option in full based on payroll deductions then credited to his account as of a
date determined by the Board or the Committee, which date shall not be less than
ten (10) days preceding the effective date of such transaction.

17. Amendment of the Plan. The Board may at any time, and from time to
time, amend this Plan in any respect, except that (a) if the approval of any
such amendment by the stockholders of the Company is required by Section 423 of
the Code, such amendment shall not be effected without such approval, and (b) in
no event may any amendment be made which would cause the Plan to fail to comply
with Section 423 of the Code.

18. Insufficient Shares. In the event that the total number of shares of
Common Stock specified in elections to be purchased under any Offering plus the
number of shares purchased under previous Offerings under this Plan exceeds the
maximum number of shares issuable under this Plan, the Board or the Committee
will allot the shares then available on a pro rata basis.

19. Termination of the Plan. This Plan may be terminated at any time by
the Board. Upon termination of this Plan all amounts in the accounts of
participating employees shall be promptly refunded.

-6-

<PAGE> 7

20. Governmental Regulations. The Company's obligation to sell and deliver
Common Stock under this Plan is subject to listing on a national stock exchange
or quotation on the Nasdaq National Market (to the extent the Common Stock is
then so listed or quoted) and the approval of all governmental authorities
required in connection with the authorization, issuance or sale of such stock.

21. Governing Law. The Plan shall be governed by Delaware law except to
the extent that such law is preempted by federal law.

22. Issuance of Shares. Shares may be issued upon exercise of an Option
from authorized but unissued Common Stock, from shares held in the treasury of
the Company, or from any other proper source.

23. Notification upon Sale of Shares. Each employee agrees, by entering
the Plan, to promptly give the Company notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the Option pursuant to which such shares were purchased.

24. Effective Date and Approval of Shareholders. The Plan shall take
effect upon the effectiveness of the Company's registration statement under the
Securities Act of 1933, as amended, relating to the Company's initial public
offering of Common Stock, subject to approval by the stockholders of the Company
as required by Section 423 of the Code, which approval must occur within twelve
months of the adoption of the Plan by the Board.

Adopted by the Board of Directors
on September 30, 1999

Approved by the stockholders
on September 30, 1999

-7-

<PAGE> 1

EXHIBIT 10.28

AGREEMENT

This Agreement dated as of January 21, 2000 is entered into by and between
Caminus LLC, a Delaware limited liability company (the "Company"), and GFI Two
LLC (formerly, GFI Energy Ventures LLC) ("GFI").

WHEREAS, the Company and GFI are each party to that certain Limited
Liability Company Agreement dated as of May 12, 1998 (the "LLC Agreement");

WHEREAS, pursuant to Section 6.5.2 of the LLC Agreement, GFI provides
certain financial, strategic mergers and acquisition, tax and general
administrative services to the Company in exchange for certain payments by the
Company;

WHEREAS, the Company is effecting a reorganization (the "Reorganization")
pursuant to which the members of the Company will exchange their shares of
membership interest in the Company for shares of common stock of a Delaware
C-corporation (the "Surviving Corporation");

WHEREAS, effective upon the closing of the Reorganization and pursuant to
that certain Merger Agreement by and among the Company, the Surviving
Corporation and a wholly-owned subsidiary of the Surviving Corporation, certain
portions of the LLC Agreement, including Section 6.5.2 thereof, will be
terminated; and

WHEREAS, the Company and GFI desire to formally memorialize their mutual
understanding with respect to the termination of Section 6.5.2 of the LLC
Agreement and the payment in full by the Company of all amounts due thereunder
to GFI for financial, tax and general administrative services provided by GFI to
the Company.

NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the Company and GFI agree as follows:

1. Effective upon the closing of the Reorganization, (i) the provisions
of Section 6.5.2 of the LLC Agreement be and hereby are terminated and (ii)
except as set forth in Section 2 below, the Company and GFI hereby waive their
respective rights and hereby release each other from their respective
obligations under Section 6.5.2 of the LLC Agreement.

2. Notwithstanding the foregoing, (i) the Company shall continue to pay
GFI a management fee, calculated in accordance with Section 6.5.2 of the LLC
Agreement, for financial, tax and general administrative services provided by
GFI through the Reorganization; and (ii) within three business days following
the closing date of the

<PAGE> 2

initial public offering of common stock of the Surviving Corporation, the
Company shall pay to GFI an amount equal to $1,300,000 in consideration for
termination of the provisions of Section 6.5.2 of the LLC Agreement.

3. If the initial public offering does not close by February 15, 2000,
this Agreement will automatically terminate and be of no force or effect
proactively or retroactively and the Company and GFI will both be in such
position as if this Agreement was never entered into.

4. The existence, validity and construction of this Agreement shall be
governed by the laws of the State of Delaware.

5. This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.

IN WITNESS WHEREOF the parties hereto have executed this Amendment on the
date first above written.

CAMINUS LLC

/s/ Mark A. Herman
-----------------------------
By: Mark A. Herman
Its: CFO

GFI TWO LLC
/s/ Lawrence D. Gilson
------------------------------
By: Lawrence D. Gilson
Its: Chairman

<PAGE> 1

EXHIBIT 10.36

AMENDMENT TO LIMITED LIABILITY COMPANY AGREEMENT

This Amendment to that certain Limited Liability Company Agreement dated as
of May 12, 1998 (the "LLC Agreement") among Caminus LLC, a Delaware limited
liability company (the "Company"), and the members of the Company (the
"Members") is dated as of January 19, 2000. Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings ascribed to such
terms in the LLC Agreement.

WHEREAS, the Company is effecting a reorganization (the "Reorganization")
pursuant to which the members of the Company will exchange their Membership
Interests in the Company for shares of common stock of a Delaware C-corporation
(the "Surviving Corporation");

WHEREAS, pursuant to Article IV of Appendix B to the LLC Agreement, the
Securityholders of the Company have been granted registration rights as provided
therein;

WHEREAS, the definition of "Securityholders" in Section 1.3(h) of Appendix
B to the LLC Agreement is limited to those Members of the Company who held
Membership Interests on the date of the LLC Agreement; and

WHEREAS; the Company and the Members desire that, after the closing of the
Initial Public Offering (as defined below), the registration rights contained in
Article IV of Appendix B to the LLC Agreement be extended to each Member that
holds shares of common stock of the Surviving Corporation immediately prior to
the effectiveness of the first registration statement registering shares of
common stock of the Surviving Corporation under the Securities Act of 1933, as
amended (the "Initial Public Offering").

NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the Company and at least a Majority in Interest of the Members, representing all
of the parties necessary to amend the LLC Agreement as provided in Section
11.2.2 thereof, agree as follows:

1. Effective upon the closing of the Initial Public Offering, the
definition of "Securityholders" contained in Section 1.3(h) of Appendix B to the
LLC Agreement shall be deleted in its entirety and the following shall be
substituted in its place:

<PAGE> 2

"(h) 'Securityholders' means the holders of Securities as of the date
on which the Company's first registration statement registering
Securities under the Securities Act of 1933, as amended, is declared
effective by the Securities and Exchange Commission, as well as, in
accordance with the terms of the Agreement and this Appendix B, their
respective successors and assigns."

2. The LLC Agreement, as supplemented and modified by this Amendment,
together with the other writings referred to in the LLC Agreement or delivered
pursuant thereto which form a part thereof, contain the entire agreement between
the parties with respect to the subject matter thereof and amend, restate and
supersede all prior and contemporaneous arrangements or understandings with
respect thereto.

3. Upon the effectiveness of this Amendment, on and after the date
hereof, each reference in the LLC Agreement to "this Agreement," "the
Agreement," "hereunder," "hereof," "herein" or words of like import, and each
reference in the other documents entered into in connection with the Agreement,
shall mean and be a reference to the LLC Agreement, as amended hereby. Except as
specifically amended above, the LLC Agreement shall remain in full force and
effect and is hereby ratified and confirmed.

4. The existence, validity and construction of this Amendment shall be
governed by the laws of the State of Delaware.

5. This Amendment may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.

IN WITNESS WHEREOF the parties hereto have executed this Amendment on the
date first above written.

CAMINUS LLC

By: /s/ Mark A. Herman
-----------------------------
Title: CFO
--------------------------

<PAGE> 3

OCM CAMINUS INVESTMENT, INC.

By: /s/ Christopher S. Brothers /s/ Kenneth Liang
---------------------------- -----------------
Its: VP/VP
----------------------------

RIT CAPITAL PARTNERS PLC

By: /s/ Anthony H. Bloom
-----------------------------
Its: Authorized Signatory
-----------------------------

GFI TWO LLC

By: /s/ Lawrence D. Gilson
-----------------------------
Its: President
-----------------------------

ZAK ASSOCIATES, INC.

By: Brian J. Scanlan
-----------------------------
Its: President
-----------------------------

Nigel L. Evans

/s/ Nigel L. Evans
---------------------------------

<PAGE> 1

EXHIBIT 10.39

CAMINUS LLC

AMENDMENT NO. 1

TO EMPLOYMENT AGREEMENT

This Amendment No. 1 to Employment Agreement is made as of January 14,
2000, by and between Dr. Nigel Evans (the "Employee") and Caminus Limited, a
company incorporated in the United Kingdom whose registered office is Caminus
House, Castle Park, Cambridge CB3 ORA, United Kingdom. (the "Company"), and
amends the Service Agreement by and between the Employee and the Company., dated
as of May 12, 1998 (the "Agreement").

In conjunction with an Initial Public Offering ("IPO") of Caminus Corporation
("Caminus") the following are agreed to:

1. Commencing January 31, 2000 the Employee's Base Salary (as defined in
the Agreement) shall be Pound Sterling 163,500 per annum, payable in
accordance with the terms of the Agreement.

2. Commencing January 31, 2000 the second sentence in Section 3.1 of the
Agreement which reads "The Employee shall be entitled to an annual
bonus payment (which is targeted at Pound Sterling 100,000) in
addition to his salary and other benefits, with the actual bonus
amount to be based upon a review of performance by the Board following
the conclusion of each year" will hereby be deleted.

3. The Employee within ten days after the IPO will receive a one-time
bonus of Pound Sterling 158,723.

4. In the event that the IPO does not close by January 31, 2000 the one
time bonus amount in Section 3 above will be recalculated using the
same assumptions and methodology, adjusting the calculation for the
numbers of days between January 31, 2000 and the IPO date.
Additionally, the Employee's new Base salary will commence on the IPO
date.

5. Except as set forth above, the Agreement shall remain in full force
and effect.

EXECUTED as of the date set forth above.

CAMINUS LLC

/s/ Mark A. Herman
---------------------------
By: Mark A. Herman
Its: CFO

EMPLOYEE

/s/ Nigel Evans
---------------------------
Dr. Nigel Evans

<PAGE> 1

EXHIBIT 10.51

CAMINUS LLC

AMENDMENT NO. 2

TO EMPLOYMENT AGREEMENT

This Amendment No. 2 to Employment Agreement is made as of January 14,
2000, by and between Dr. Michael Morrison (the "Employee") and Caminus Limited,
a company incorporated in the United Kingdom whose registered office is Caminus
House, Castle Park, Cambridge CB3 ORA, United Kingdom. (the "Company"), and
amends the Service Agreement by and between the Employee and the Company., dated
as of May 12, 1998 (the "Agreement").

In conjunction with an Initial Public Offering ("IPO") of Caminus Corporation
("Caminus") the following are agreed to:

1. Commencing January 31, 2000 the Employee's Base Salary (as defined in
the Agreement) shall be Pound Sterling 136,500 per annum, payable in
accordance with the terms of the Agreement.

2. Commencing January 31, 2000 the second sentence in Section 3.1 of the
Agreement which reads "The Employee shall be entitled to an annual
bonus payment (which is targeted at Pound Sterling 83,000) in addition
to his salary and other benefits, with the actual bonus amount to be
based upon a review of performance by the Board following the
conclusion of each year" will hereby be deleted.

3. The Employee within ten days after the IPO will receive a one-time
bonus of Pound Sterling 131,977.

5. Except as set forth above, the Agreement shall remain in full force
and effect.

EXECUTED as of the date set forth above.

CAMINUS LLC

/s/ Mark A. Herman
-----------------------------
By: Mark A. Herman
Its: CFO

EMPLOYEE

/s/ Michael B. Morrison
-----------------------------
Dr. Michael Morrison

<PAGE> 1

Exhibit 10.52

FORM OF SECURITY AGREEMENT
(Caminus Corporation)

THIS SECURITY AGREEMENT, dated as of January ___, 2000 (the "Agreement"
or the "Security Agreement"), is between Caminus Corporation, a Delaware
corporation, as obligor (the "Obligor"), and Fleet Bank, N.A., a national
banking association organized under the laws of the United States, as lender
(hereinafter, in such capacity, together with its successors in such capacity,
the "Lender").

As of June 23, 1999, Caminus LLC, a Delaware limited liability
corporation, (the "Prior Debtor") and the Lender were parties to a Credit
Agreement (such Credit Agreement, as the same may be amended or supplemented
from time to time is referred to herein as the "Credit Agreement") providing,
subject to the terms and conditions thereof, for extensions of credit to be made
by the Lenders to the Prior Debtor in an aggregate principal amount not
exceeding $5,000,000.00 (the "Loans"). Pursuant to a certain merger agreement
between the Obligor and the Prior Debtor, dated _________, 2000 (the "Merger
Agreement"), the Obligor has become the successor by Merger to the Prior Debtor
and, accordingly, has assumed the liabilities of the Prior Debtor. To induce the
Lender to consent to the Merger of the Prior Debtor with and into the Obligor,
in accordance with the terms and conditions of that certain Consent Letter,
dated as of ___________, 2000 between the Lender, the Prior Debtor and the
Obligor, the Obligor agreed to execute and deliver this Security Agreement to
the Lender.

For other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Obligor has agreed to execute and deliver
this Agreement.

As used herein, "UCC" shall mean the Uniform Commercial Code of the
State of New York (except as otherwise defined in Section 7 hereof) as amended
and in effect as of the date hereof. All other capitalized terms, unless defined
herein or in the Schedules attached hereto and made a part hereof, shall have
the meanings set forth in the Credit Agreement.

SECTION 1. Security Interest.

1(a) As security for the prompt and complete payment, performance
and observance of all indebtedness, obligations, liabilities and agreements of
the Obligor to the Lender pursuant to, under or arising out of the Credit
Agreement, the Notes, the other Loan Documents and any amendments, extensions,
renewals, increases, refundings or modifications thereto or of any part thereof,
whether now existing or hereafter incurred, matured or unmatured, direct or
contingent, together with interest and costs of enforcement and collection
thereof and of this Security Agreement, including all reasonable actual
attorneys' fees and disbursements incurred by the Lenders (collectively, the
"Liabilities"), the Obligor hereby grants to the Lender, a continuing security
interest of first priority in, and the Obligor hereby assigns and pledges to the
Lender, all of the Obligor's right, title and interest in the property described
on Schedule A-1 attached hereto, whether now owned by the Obligor or hereafter
coming into existence, and wherever located (all being collectively referred to
herein as the "Collateral").

<PAGE> 2

1(b) The Obligor irrevocably appoints the Lender as its lawful
attorney and agent to execute financing statements and amendments thereto (to
the extent permitted by applicable law), notices of any assignments of any of
the Collateral on the Obligor's behalf, and on its behalf to file financing
statements and amendments thereto in any appropriate public office.

1(c) This Security Agreement is in addition to and without
limitation of any right of the Lender and/or any of the other Lender under any
other security agreement, pledge or leasehold assignment, mortgage or guarantee
granted by the Obligor or any third party to the Lender.

1(d) Except as otherwise herein provided, this Security Agreement is
absolute and without any conditions. The Lender can enforce its rights in the
Collateral immediately upon an Event of Default without having first to attempt
any collection from the Obligor.

SECTION 2. Collection.

Upon the occurrence and continuation of an Event of Default pursuant to
Section 9(a) hereof, the Lender shall have the following rights and powers in
addition to those specified in Section 9(b) hereof:

2(a) The Lender shall have the right to notify the parties obligated
on any or all of the Obligor's Accounts, Contracts, Chattel Paper, Instruments,
Insurance, Documents or General Intangibles to make payment thereof directly to
the Lender, and the Lender may take control of all proceeds of any of the
Accounts, Contracts, Chattel Paper, Instruments, Insurance or General
Intangibles. The costs of collection and enforcement, including reasonable
attorney's fees and reasonable out-of-pocket expenses, shall be borne solely by
the Obligor, whether the same are incurred by the Lender or the Obligor. The
Obligor will not thereafter without the Lender's written consent make any
adjustment, extend or renew, compromise, compound or settle any of the Accounts,
Contracts, Chattel Paper, Instruments, Insurance or General Intangibles, or
release, wholly or partly, any person liable for payment thereof.

2(b) The Obligor hereby irrevocably appoints the Lender to be the
Obligor's true and lawful attorney, with full power of substitution, in the
Lender's name or the Obligor's name or otherwise for the Lender's sole use and
benefit, but at the Obligor's cost and expense, to exercise at any time all or
any of the following powers with respect to all or any of the Collateral:

(i) to demand, sue for, collect, receive and give acquittance for
any and all moneys due or to become due upon or by virtue
thereof;

(ii) to receive, take, sign, endorse, assign and deliver any and all
checks, notes, drafts, acceptances, invoices, freight or
express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and
other negotiable and non-negotiable instruments and documents
taken or received by the Lender in connection therewith;

-2-
<PAGE> 3

(iii) to receive, open and dispose of all mail addressed to the
Obligor and to notify the post office authorities to change the
address for delivery of mail addressed to the Obligor to such
address as the Lender may designate;

(iv) to sign the name of the Obligor on any Document, on invoices
relating to any Account or Contract, drafts against and notices
to account debtors or obligors of the Obligor, on financing
statements and other public records and on notices to
customers;

(v) to execute endorsements, assignments or other instruments of
conveyance or transfer and proofs of claim and loss and to
adjust and compromise any claims under insurance policies or
otherwise;

(vi) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto;

(vii) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds thereof and to apply for and obtain any
required consents of governmental authority for any sale or
other disposition of the Collateral, as full and effectually as
if the Lender were the absolute owner thereof; and

(viii) to apply any or all amounts then in, or thereafter deposited
in, the Company Account in the manner provided in Section
9(b)(iii) hereof; and

(ix) to make any allowances and other adjustments with reference
thereto and to take all other actions necessary or advisable in
the sole discretion of the Lender to carry out and enforce this
Security Agreement or the Liabilities.

All acts done under the foregoing authorization are hereby ratified and
approved by the Obligor and neither the Lender nor any designee or agent of the
Lender shall be liable for any acts of commission or omission (other than acts
committed or omitted through gross negligence or willful misconduct), for any
error of judgment or for any mistake of fact or law. The foregoing power of
attorney being coupled with an interest is irrevocable while any Liabilities
shall remain unpaid. The foregoing authorization shall not be construed in
limitation of any other similar authorization to the Lender under the Credit
Agreement or otherwise.

2(c) The Obligor will immediately deliver to the Lender all proceeds
of the Collateral and all original evidence of Accounts, Contracts, Chattel
Paper, Instruments, Insurance, Documents, Patents, Trademarks, Records or
General Intangibles, including without limitation all notes or other instruments
or contracts for the payment of money, appropriately endorsed to the Lender's
order and, regardless of the form of such endorsement, the Obligor hereby waives
presentment, demand, notice of dishonor, protest and notice of protest and all
other notices with respect thereto; and the Obligor hereby appoints the Lender
as the Obligor's agent and attorney-in-fact to make such endorsement on behalf
of and in the name of the Obligor.

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<PAGE> 4

2(d) The exercise by the Lender of or failure to so exercise any
authority granted hereinabove shall in no manner affect the Obligor's liability
to the Lender, and provided, further, that the Lender shall be under no
obligation or duty to exercise any of the powers hereby conferred upon it and it
shall be without liability for any act or failure to act in connection with the
collection of, or the preservation of any rights under any of, the Collateral.

SECTION 3. General Representations and Warranties.

In addition to the Obligor's representations made in the other Loan
Documents, the Obligor represents and warrants to the Lender, which
representations and warranties shall survive execution and delivery of this
Agreement, as follows:

3(a) All filings, registrations and recordings necessary or
appropriate to create, preserve, protect and perfect the security interest
granted by the Obligor to the Lender hereby in respect to the Collateral have
been accomplished and the security interest granted to the Lender pursuant to
this Agreement in and to the Collateral constitutes a perfected security
interest therein superior and prior to the rights of all other Persons therein
(except for Liens permitted under the Credit Agreement) and subject to no other
Liens (except for Liens permitted under the Credit Agreement), and is entitled
to all the rights, priorities and benefits afforded by the UCC or other relevant
laws as enacted in any relevant jurisdiction to perfected security interests.

3(b) The Obligor is, and as to Collateral acquired by it from time
to time after the date hereof the Obligor will be, the owner of all Collateral
free from any Lien, security interest, encumbrance or other right, title or
interest of any Person (other than Liens permitted under the Credit Agreement),
and the Obligor shall defend its Collateral against all claims and demands of
all Persons at any time claiming the same or any interest therein adverse to the
Lender.

3(c) There is no financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) covering or
purporting to cover any interest of any kind in the Collateral except for
filings and recordings permitted under the Credit Agreement and filings and
recordings in favor of the Lender created or provided for herein, and so long as
any of the Liabilities remain unpaid the Obligor will not execute or authorize
to be filed in any public office any financing statement (or similar statement
or instrument of registration under the law of any jurisdiction) or statements
relating to the Collateral, except (i) financing statements filed or to be filed
in respect of and covering the security interests granted hereby by the Obligor,
and (ii) financing statements to be filed in connection with the creation of
Liens permitted under the Credit Agreement.

3(d) The office location(s) of the Obligor set forth on Schedule B
attached hereto as the Obligor's principal place of business and chief executive
office and all other places of business are true and correct.

3(e) Schedule B attached hereto contains a true and complete listing
of all of the locations of all the Collateral. In the case of Inventory,
Schedule B also sets forth each Warehouseman (as defined in the Uniform
Commercial Code as in effect in the state in which the warehouse owned or
operated by such Person is located) that from time to time holds Inventory of
the Obligor and the Permitted Inventory Location (as defined herein) at which
such

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<PAGE> 5

Inventory is so held. In the case of such Inventory, the Obligor further
represents and warrants that none of the Inventory is subject to a negotiable
warehouse receipt (as defined in the Uniform Commercial Code as in effect in the
state in which such Inventory is located).

3(f) The Obligor further represents and warrants, as to any
Inventory, that all such Inventory, other than Inventory in transit in the
normal course of business, is held at a Permitted Inventory Location (as defined
herein). "Permitted Inventory Location" is defined herein to mean (i) a
warehouse or other storage facility owned or leased by the Obligor, or (ii) a
warehouse or other storage facility owned, leased or operated by a Warehouseman
from whom the Lender has received a warehouse bailment agreement in form and
substance satisfactory to the Lender with respect to Inventory there held, and,
in either case, in jurisdictions where appropriate UCC financing statements
shall have liens filed against the Obligor for the benefit of the Lender and the
other Lender.

SECTION 4. Special Provisions Concerning Accounts.

4(a) As of the time when each of its Accounts arises, the Obligor
shall be deemed to have represented and warranted that such Accounts and all
records, papers and documents relating thereto (if any) are genuine and in all
respects what they purport to be, and that all papers and documents (if any)
relating thereto (i) will represent the genuine, legal, valid and binding
obligation of the account debtor evidencing indebtedness unpaid and owed by such
account debtor arising out of the performance of labor or services or the sale
or lease and delivery of the merchandise listed therein, or both, (ii) will be
the only original writings evidencing and embodying such obligation of the
account debtor named therein (other than copies created for purposes other than
general accounting purposes), (iii) will evidence true and valid obligations,
enforceable in accordance with their respective terms, not subject to the
fulfillment of any contract or condition whatsoever or to any defenses, set offs
or counterclaims (except with respect to refunds, returns and allowances in the
ordinary course of business), or stamp or other taxes, and (iv) will be in
compliance and will conform with all applicable federal, state and local laws
and applicable laws of any relevant foreign jurisdiction.

4(b) The Obligor will keep and maintain at its own cost and expense
satisfactory and complete records of its Accounts, including, but not limited
to, records of all payments received, credits granted thereon, all merchandise
returned and all other dealings therewith, and the Obligor will make the same
available to the Lender for inspection, at the Obligor's own cost and expense,
at any and all reasonable times upon demand.

4(c) The Obligor shall endeavor to cause to be collected from the
account debtor named in each of its Accounts, as and when due (including,
without limitation, Accounts which are delinquent, such Accounts to be collected
in accordance with generally accepted lawful collection procedures), any and all
amounts owing under or on account of such Accounts, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Accounts, except that, so long as no Event of Default exists and is
continuing, the Obligor may allow in the ordinary course of business as
adjustments to amounts owing under its Accounts an extension or renewal of the
time or times of payment, or settlement for less than the total unpaid balance,
which the Obligor finds appropriate in accordance with sound business

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<PAGE> 6

judgment. The costs and expenses (including, without limitation, attorneys' fees
and expenses) of collection, whether incurred by the Obligor or the Lender,
shall be borne by the Obligor.

4(d) If any of the Accounts becomes evidenced by an Instrument, the
Obligor will within ten (10) days notify the Lender thereof, and upon request by
the Lender promptly deliver such Instrument to the Lender appropriately endorsed
to the order of the Lender as further security hereunder.

4(e) The Obligor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Lender from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments and take such further steps relating to its
Accounts and other property or rights covered by the security interest hereby
granted, as the Lender may reasonably require which are consistent with the
terms hereunder.

SECTION 5. Special Provisions Concerning Contracts.

5(a) The Obligor represents and warrants that no consent of any
party (other than the Obligor) to any Contract is required, or purports to be
required, in connection with the execution, delivery and performance of this
Security Agreement. Each Contract is in full force and effect and is enforceable
in accordance with its respective terms and there is no default under any of the
terms thereof. The Obligor does hereby further represent and warrant that it has
not assigned or pledged, and hereby covenants that it will not assign or pledge,
except as permitted under the Credit Agreement, the whole or any part of the
rights hereby assigned to anyone other than the Lender, its successors or
assigns so long as this Security Agreement shall remain in effect. The Obligor
also covenants and agrees that it will not take any action or fail to take any
action or institute any proceedings the taking or omission of which might result
in the material alteration or impairment of this Security Agreement or any of
the material rights created by any of the Contracts or this Security Agreement.
Except as specified by a detailed notation corresponding to the applicable
Contract on Schedule A-2, the Obligor hereby further represents and warrants
that no consent or authorization of, filing with or other act by or in respect
of any Governmental Authority is required in connection with the execution,
delivery, performance, validity or enforceability of any of the Contracts by any
party thereto other than those which have been duly obtained, made or performed,
are in full force and effect and do not subject the scope of any such Contract
to any material adverse limitations, either specific or general in nature. The
right, title and interest of the Obligor in, to and under each Contract are not
subject to any defense, offset, counterclaim or claim which could reasonably be
expected to have a Material Adverse Effect, nor, as of the date of this Security
Agreement and to the best of the Obligor's knowledge, have any of the foregoing
been asserted or alleged against the Obligor as to any Contract. The Obligor has
delivered to the Lender a complete and correct copy of each Contract, including
all amendments, supplements and other modifications thereto. No amount payable
to the Obligor under or in connection with any Contract is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Lender.

The Obligor agrees that, so long as this Security Agreement is in
effect, it will not, without the prior written consent of the Lender, amend,
modify or permit to be amended or modified any of the Contracts or waive or
permit to be waived any material provisions of any of

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<PAGE> 7

the Contracts, or exercise any right to terminate or cancel any of the Contracts
or consent or agree to, or suffer or permit, the termination thereof whether or
not on account of any default therein specified if any such amendment,
modification or waiver, termination or cancellation could have a Material
Adverse Effect.

SECTION 6. Rights and Obligations Concerning Accounts and Contracts.

6(a) Anything herein to the contrary notwithstanding, the Obligor
shall remain liable under each of the Accounts and Contracts to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise to
each such Account and in accordance with and pursuant to the terms and
provisions of each such Contract. The Lender shall have no obligation or
liability under any Account (or any agreement giving rise thereto) or under any
Contract by reason of or arising out of this Security Agreement or the receipt
by the Lender of any payment relating to such Account or Contract pursuant
hereto, nor shall the Lender be obligated in any manner to perform any of the
obligations of the Obligor under or pursuant to any Account (or any agreement
giving rise thereto) or under or pursuant to any Contract, to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received
by it or as to the sufficiency of any performance by any party under any Account
(or any agreement giving rise thereto) or under any Contract, to present or file
any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.

6(b) The Obligor hereby agrees that no liability shall be asserted
or enforced against the Lender in the exercise of the rights and powers granted
to the Lender hereunder, all such liability being hereby expressly waived and
released by the Obligor. Without limiting the application of Section 11(a)
hereof, the Obligor hereby agrees to indemnify and hold the Lender harmless for
and against any and all liability, expense, cost, loss or damage which the
Lender may incur by reason of any act or omission of the Obligor under any of
the Contracts ("Losses"), except to such extent such Losses arise by reason of
the gross negligence or willful misconduct of the Lender. Should the Lender
incur any liability, expense, cost, loss, or damage, (i) under the Contracts for
which it is to be indemnified by the Obligor as aforesaid, or (ii) by reason of
the exercise of the Lender's rights hereunder, the amount thereof, including
costs, expenses and reasonable actual attorney's fees and expenses, shall be
secured hereby and shall be immediately due and payable by the Obligor to the
Lender.

6(c) The Lender has the right to make test verifications of the
Accounts in any manner and through any medium that it reasonably considers
advisable, and the Obligor shall furnish all such assistance and information as
the Lender may require in connection therewith. At any time and from time to
time, upon the Lender's request and at the expense of the Obligor, the Obligor
shall cause independent public accountants or others satisfactory to the Lender
to furnish to the Lender reports showing reconciliations, aging and test
verifications of, and trial balances, for, the Accounts. The Lender may in its
own name or in the name of others communicate with account debtors on the
Accounts and parties to the Contracts to verify with them to its satisfaction
the existence, amount and terms of any Accounts or Contracts, provided that, so
long as no Event of Default has occurred and is continuing, the Lender agrees to
provide the Obligor notice prior to initiating such verification.

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<PAGE> 8

6(d) The Obligor shall promptly notify the Lender of, and provide to
the Lender copies of, any default notices under any of the Contracts.

SECTION 7. Special Provisions Concerning Patents and Trademarks.

7(a) The Obligor represents and warrants that it is the true and
lawful exclusive owner of the entire and unencumbered right, title and interest
in and to each of the Trademarks listed on Schedule A-3 and the Patents listed
on Schedule A-4 attached hereto, free and clear of all liens and encumbrances
(including, without limitation, any covenant not to sue a third party); that the
Trademarks and Patents are subsisting, valid, enforceable, and have not been
adjudged invalid or unenforceable, in whole or in part; and that the Trademarks
and the Patents constitute all the registered trademarks and patents,
respectively, in the United States Patent and Trademark Office and
non-registered trademarks that the Obligor now owns or uses in connection with
its business.

7(b) The Obligor represents and warrants that it has made all
necessary filings and recordations to protect its interest in the Trademarks,
Patents, and its other intellectual property; that it has and will continue to
pay all required taxes, fees, and costs to maintain all of its rights in the
Trademarks, Patents, and its other intellectual property; and that it has
received no notice or claim that its use of any of the Trademarks, Patents, or
other intellectual property infringes the rights of any third party.

7(c) Prior to licensing or assigning any of the Trademarks, Patents,
or its other intellectual property, the Obligor will give the Lender written
notice of any such license or assignment plus a copy of the draft license
agreement or assignment, and, upon execution, a copy of any final agreement or
assignment.

7(d) The Obligor shall, promptly upon learning thereof, notify the
Lender in writing of the name and address of, and furnish such pertinent
information that may be available with respect to, any party who may be
infringing or otherwise violating any of the Obligor's rights in and to any
Trademarks, Patents, or other intellectual property or of any party who makes a
claim that the use of any of the Trademarks, Patents, or other intellectual
property otherwise violates any property of any nature of that party or any
third party. Unless the Obligor shall reasonably determine that such Trademark,
Patents, or other intellectual property is not of material economic value to the
Obligor, the Obligor further shall diligently prosecute any and all persons who
infringe any of its Trademarks, Patents, or other intellectual property to
recover any and all damages and take such other actions as the Obligor shall
deem appropriate under the circumstances to protect such Trademarks, Patents, or
other intellectual property. The Lender shall have the option, but not the
obligation, to participate in any such action at Obligor's expense and to
maintain suits against parties for infringement or misappropriation if Lender
believes the Obligor is not diligently and vigorously proceeding in such
action(s).

7(e) If any trademark or service mark registration or patent
registration is issued hereafter to the Obligor as a result of any application
or registration now or hereafter pending before the United States Patent and
Trademark Office or foreign equivalent thereof, the Obligor shall forthwith
execute and deliver a copy of the certificate of registration within thirty (30)
days of receipt of such certificate and a grant of security in such trademark,
service mark or

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<PAGE> 9

patent to the Lender confirming the grant thereof hereunder, the form of such
confirmatory grant to be substantially the same as the form hereof.

7(f) The Obligor will perform all acts and execute all documents
including, without limitation, documents in form suitable for filing with the
United States Patent and Trademark Office, other governmental office, and any
foreign equivalent thereof, as reasonably requested by the Lender at any time to
evidence, perfect, maintain, record and enforce the Lender's interest in the
Trademarks, Patents, and the Obligor's other intellectual property or otherwise
in furtherance of the provisions of this Agreement. In the event of foreclosure
hereunder upon all or any part of the Collateral, the Obligor shall, and hereby
does, constitute the Lender as the Obligor's attorney-in-fact to transfer, in
the Obligor's name, the Trademarks (including all goodwill associated with the
Trademarks), the Patents, and the Obligor's other intellectual property to a
third party capable, in the Lender's judgment, of using and maintaining the
nature and quality of the Trademarks, the Patents, and the Obligor's other
intellectual property. Such power-of-attorney shall include, without limitation,
the right to execute all documents and to do all acts as the Lender considers
necessary to effect any of the foregoing, and all acts of such attorney are
hereby ratified and confirmed; such power being coupled with an interest which
is irrevocable until the Liabilities are paid in full.

7(g) Except to the extent that the Lender shall consent in writing,
the Obligor will, unless the Obligor shall reasonably determine that a Trademark
is not of material economic value to the Obligor, (i) continue to use each
Trademark in order to maintain each Trademark in full force free from any claim
of abandonment for non-use, (ii) employ each Trademark with the appropriate
notice of application or registration, (iii) not adopt or use any mark which is
confusingly similar or a colorable imitation of any Trademark, (iv) not use any
Trademark except for the uses for which registration or application for
registration of such Trademark has been made, (v) not (and not permit any
licensee or sublicensee thereof, if any, to) do any act or knowingly omit to do
any act whereby any Trademark may be subject to dilution, misappropriation, or
invalidation, and (vi) ensure and warrant that the quality of the goods and
services bearing each applicable Trademark will be maintained at not less than
the quality level thereof as exists as of the date of this Agreement, and in
that regard, during normal business hours the Lender and its representatives may
inspect the Obligor's books, records, and facilities which manufacture, inspect,
or store products to ensure that quality of the applicable goods and services
are being maintained.

7(h) The Obligor shall notify the Lender immediately if it knows, or
has reason to know, of any reason that any application or registration relating
to any Trademark, Patent, or other intellectual property of the Obligor may
become abandoned or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark Office or any
court) regarding the Obligor's ownership of any Trademark, Patent, other
intellectual property, its right to register or use the same, or to keep and
maintain the same.

7(i) In no event shall the Obligor, either itself or through any
agent, employee, licensee or designee, file an application for the registration
of any Trademark, Patent, or other intellectual property with the United States
Patent and Trademark Office, other governmental office, or any similar office or
agency in any other country or any political subdivision thereof,

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<PAGE> 10

unless it promptly informs the Lender, and, upon request of the Lender, executes
and delivers any and all agreements, instruments, documents and papers as the
Lender may request to evidence the Lender's security interest in such Trademark,
Patent, or other intellectual property and the goodwill and general intangibles
of the Obligor relating thereto or represented thereby, and the Obligor hereby
constitutes the Lender its attorney-in-fact to execute and file all such
writings for the foregoing purposes, including without limitation to modify this
Agreement by amending Schedule A-3 and/or Schedule A-4 (as the case may be) to
include any future Trademarks, Patents, and other intellectual property, all
acts of such attorney being hereby ratified and confirmed; such power being
coupled with an interest which is irrevocable until the Liabilities are paid in
full.

7(j) The Obligor will take all commercially reasonable steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, any other governmental office, or any other office or
agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the Trademarks and Patents, except to the extent
permitted under Section 7(g), including but not limited to the appropriate and
timely payment of any required fees and the appropriate and timely filing of any
documents or declarations necessary to maintain and renew such Trademarks and
Patents which may be necessary or appropriate under applicable federal, state,
and foreign law.

7(k) Upon the occurrence and during the existence of an Event of
Default, the Lender may, by written notice to the Obligor, take any or all of
the following actions: (i) declare the entire right, title and interest of the
Obligor in and to each of the Trademarks, Patents, and other intellectual
property, together with all related rights and rights of protection to the same,
vested, in which event such rights, title and interest shall immediately vest,
in the Lender, in which case the Obligor agrees to execute assignments in form
and substance satisfactory to the Lender, of all its rights, title and interest
in and to the Trademarks, Patents, and other intellectual property to the
Lender; (ii) take and use or sell the Trademarks, Patents, and other
intellectual property and the goodwill of the Obligor's business symbolized by
the Trademarks and the right to carry on the business of such Obligor in
connection with which the Trademarks have been used; and (iii) direct the
Obligor to refrain, in which event the Obligor shall refrain, from using the
Trademarks, Patents, and its other intellectual property in any manner
whatsoever, directly or indirectly, and, if requested by the Lender, change the
Obligor's corporate name to eliminate therefrom any use of any Trademarks and
execute such other and further documents that the Lender may request to further
confirm this and to transfer ownership of the Trademarks, Patents, and other
intellectual property, and any pending trademark and patent application(s) for
trademarks, patents, and other intellectual property in the United States Patent
and Trademark Office, any other governmental office, and in any similar foreign
office to the Lender. After any Event of Default, the Obligor shall cooperate
and use its best efforts to obtain any consents, waivers, or agreements
necessary to enable the Lender to exercise its rights and remedies with respect
to any Trademark, Patent, and other intellectual property of the Obligor.

SECTION 8. Covenants of Obligor.

In addition to the Obligor's covenants contained in the Credit
Agreement, the Obligor covenants that:

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<PAGE> 11

8(a) Subject to Section 3(e) and Section 3(f) hereof, the Collateral
is and will be located at the Obligor's chief executive office and such other
places of business and Permitted Inventory Locations as indicated on Schedule B
attached hereto. The Obligor's records of the Collateral will be located at the
Obligor's chief executive office. The chief executive office of the Obligor is
located at the address shown on Schedule B attached hereto. The Obligor will not
move its chief executive office, the location of the Collateral or any Records
Office (as defined below) except to such new location as the Obligor may
establish in accordance with the last sentence of this Section 8(a) and with
respect to Inventory, to Permitted Inventory Locations. The originals of all
documents and all electronically stored data and information evidencing all
Accounts and Contracts of the Obligor and the only original books of account and
records of the Obligor relating thereto are, and will continue to be, kept at
its chief executive office shown on Schedule B attached hereto (each, a "Records
Office"), or at such new Records Office as the Obligor may establish in
accordance with the last sentence of this Section 8(a). All Accounts, Contracts
and records of the Obligor are, and will continue to be, maintained at, and
controlled and directed (including, without limitation, for general accounting
purposes) from, such Records Office location shown above, or such new location
as the Obligor may establish in accordance with the last sentence of this
Section 8(a). The Obligor shall not establish a new location for its chief
executive office, the location of the Collateral or any Records Office until (i)
it shall have given to the Lender not less than 45 days' prior written notice of
its intention so to do, clearly describing such new location and providing such
other information in connection therewith as the Lender may reasonably request,
and (ii) with respect to such new location, it shall have taken all action,
satisfactory to the Lender, to maintain the security interest of the Lender in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.

8(b) The Collateral used or useful in its business, in whomsoever's
possession they may be, shall be kept in good repair, working order and
condition, and that from time to time there will be made to such Collateral all
needful and proper repairs, renewals, replacements, extensions, additions,
betterments and improvements thereto, to the extent and in the manner customary
for companies in similar lines of business under similar circumstances. The
Obligor will not encumber, sell, erase, transfer, assign, abandon or otherwise
dispose of the Collateral except for: (i) collection, discharge, discount,
compromise or expiration of the Accounts, Chattel Paper, Instruments or General
Intangibles in the ordinary course of the Obligor's business, (ii) sale or
transfer of Inventory in the ordinary course of business, (iii) dispositions of
items of Equipment no longer needed by the Obligor in the ordinary course of
business, (iv) Liens as permitted under the Credit Agreement and (v) trade-ins,
replacements or exchanges of items of Equipment for other items of Equipment to
the extent the same shall promptly be replaced by Equipment having an equal or
greater value (in excess of purchase money liens on such items) and useful in
the Obligor's business. The inclusion of "products" and "proceeds" of the
Collateral under the security interest granted herein shall not be deemed a
consent by the Lender to any sale or other disposition of the Collateral except
as expressly permitted herein or in the Credit Agreement.

8(c) The Obligor will have and maintain insurance at its expense as
required of the Company pursuant to Section 6.04 of the Credit Agreement. The
Lender is authorized by the Obligor to act as its attorney in collecting,
adjusting, settling or cancelling such insurance and endorsing any drafts drawn
by insurers. The Lender may apply any insurance proceeds received by it to the
Liabilities, whether due or not; provided, however, that the Lender will hold
such

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<PAGE> 12

proceeds as a special deposit for use by the Obligor in replacing any damaged
Equipment which gave rise to such proceeds, so long as the Obligor is taking
steps to replace such Equipment with due diligence and in good faith and so long
as no Event of Default has occurred and is continuing hereunder. The Obligor
will immediately notify the Lender of any damage to or loss of the Collateral in
excess of $50,000. Not later than the expiration date of each insurance policy
then in effect, the Obligor shall deliver to the Lender a certificate of
insurance certifying as to (i) the extension of such policy or the issuance of a
renewal policy therefor, describing the same in reasonable detail satisfactory
to the Lender and (ii) the payment in full of the portion of the premium
therefor then due and payable (or accompanied by other proof of such payment
satisfactory to the Lender). The Obligor shall be required forthwith to notify
the Lender if the Obligor shall determine at any time not to, or at any time be
unable to, extend or renew any such insurance policy then in effect.

8(d) The Obligor will use the Collateral for business purposes and
not for personal, family, household or farming purposes and not in violation of
any statute or ordinance.

8(e) The Obligor will pay promptly when due all taxes,
contributions, charges or levies and assessments upon the Collateral owned by
the Obligor or upon its use or sale (other than those the amount or validity of
which is currently being contested in good faith by appropriate proceeding and
with respect to which appropriate reserves are maintained on the books of the
Obligor in accordance with GAAP). At its option the Lender may discharge taxes,
liens or other encumbrances at any time levied against or placed on the
Collateral which have not been stayed as to execution and contested with due
diligence in appropriate legal proceedings, and the Lender may pay for insurance
on the Collateral and maintenance and preservation of the Collateral if the
Obligor fails to do so. The Obligor shall reimburse the Lender on demand for any
such expense incurred by the Lender pursuant to the foregoing authorization,
together with interest thereon, from the date paid by the Lender until payment
in full by the Obligor, at the per annum rate of the Base Rate plus four percent
(4%).

8(f) The Obligor will at all times and in all material respects keep
accurate and complete records of the Collateral. Subject to such notice required
pursuant to the Credit Agreement (if any), the Lender, or any of its agents,
shall have the right (in addition to the rights granted to the Lender pursuant
to Section 6(c) hereof) to call at the Obligor's place or places of business
during normal business hours, at intervals to be determined by the Lender, to
examine and inspect the Collateral and to inspect, audit, make test
verifications and otherwise check and make extracts from the books, records,
journals, orders, receipts, correspondence and other data relating to the
Collateral or to any other transactions between the parties hereto.

8(g) The Obligor agrees to stamp its books and records pertaining to
Accounts, Contracts, Chattel Paper, Instruments, Documents, Trademarks and
General Intangibles to evidence the Lender's security interest therein in form
satisfactory to the Lender immediately upon the Lender's written demand.

8(h) The Obligor will obtain the consent of any Governmental
Authority or other Person to the assignment hereunder of any of the Collateral
if such consent may be required by the terms of any contract or statute.

-12-
<PAGE> 13

8(i) If any action or proceeding shall be commenced, other than any
action to collect the Liabilities, to which action or proceeding the Lender or
any Lender is made a party and in which it becomes necessary to defend or uphold
the Lender's security interest hereunder, all costs incurred by the Lender for
the expenses of such litigation (including reasonable actual attorney fees and
expenses) shall be deemed part of the Liabilities secured hereby, which the
Obligor agrees to pay or cause to be paid.

8(j) The Obligor agrees that if any warehouse receipt or receipt in
the nature of a warehouse receipt is issued with respect to any of its
Inventory, such warehouse receipt or receipt in the nature thereof shall not be
"negotiable" (as such term is used in Section 7-104 of the UCC).

8(k) The Obligor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Lender from time to time such lists,
descriptions and designations of its Collateral, warehouse receipts, receipts in
the nature of warehouse receipts, bills of lading, documents of title, vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments and take such further steps relating to the
Collateral and other property or rights covered by the security interest hereby
granted, which the Lender deems appropriate or advisable to perfect, preserve or
protect its security interest in the Collateral consistent with the terms
hereunder, and the Obligor hereby authorizes the Lender to execute and file at
any time and from time to time one or more financing statements or copies
thereof or of this Security Agreement with respect to the Collateral signed only
by the Lender.

8(l) If the Obligor is not the owner of any premises where any
Equipment is located, the Obligor will use its reasonable best efforts to
furnish such consents and waivers executed by the owners of such premises as the
Lender shall request.

SECTION 9. Events of Default.

9(a) An Event of Default ("Event of Default") shall have occurred
under this Agreement upon (i) the failure by the Obligor to pay when due any
Liabilities, whether by acceleration or otherwise, (ii) the occurrence of any
event, condition or act which is defined or described as an Event of Default in
any Loan Document, or (iii) the occurrence of any event, condition or act which
pursuant to the terms of any Loan Document gives the Lender, for the benefit of
the Lender, the right to accelerate the payment of any Liabilities, regardless
of whether the Lender exercises such right.

9(b) Upon the occurrence and during the existence of an Event of
Default, the Lender shall have all of the rights, powers and remedies set forth
in the Credit Agreement, the Notes, this Agreement, the other Loan Documents and
any other instrument or other evidence of any of the Liabilities secured hereby,
together with the rights and remedies of a secured party under the Uniform
Commercial Code of the jurisdictions where the Collateral is located, and,
without limiting the foregoing, the Lender may:

(i) personally, or by agents or attorneys,
immediately retake possession of the Collateral or any part thereof,
from the Obligor or any other Person who then has possession of any

-13-
<PAGE> 14

part thereof with or without notice or process of law, and for that
purpose may enter upon the Obligor's premises where any of the
Collateral is located and remove the same and use in connection with
such removal any and all services, supplies, aids and other facilities
of the Obligor; and

(ii) instruct the obligor or obligors on any
agreement, instrument or other obligation (including, without
limitation, the Accounts and the Contracts) constituting the Collateral
to make any payment required by the terms of such instrument or
agreement directly to the Lender; and

(iii) withdraw all monies, securities and
instruments in the Company Account or any other account for application
to the Liabilities; and

(iv) sell or otherwise liquidate, or direct the
Obligor to sell or otherwise liquidate, any or all investments made in
whole or in part with the Collateral or any part thereof, and take
possession of the proceeds of any such sale or liquidation; and

(v) take possession of the Collateral or any part
thereof, by directing the Obligor in writing to deliver the same to the
Lender at any place or places designated by the Lender, in which event
the Obligor shall at its own expense

(A) forthwith cause the same to be moved to
the place or places so designated by the Lender and there
delivered to the Lender,

(B) store and keep any Collateral so
delivered to the Lender at such place or places pending further
action by the Lender as provided in Section 9(c) hereof, and

(C) while the Collateral shall be so stored
and kept, provide such guards and maintenance services as shall
be necessary to protect the same and to preserve and maintain
them in good condition;

it being understood that the Obligor's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly,
upon application to a court of equity having jurisdiction, the Lender
shall be entitled to a decree requiring specific performance by the
Obligor of said obligation.

9(c) Any Collateral repossessed by the Lender under or pursuant to
Section 7(k) or 9(b) and any other Collateral whether or not so repossessed by
the Lender, may be sold, leased or otherwise disposed of under one or more
contracts or as an entirety, and without the

-14-
<PAGE> 15

necessity of gathering at the place of sale the property to be sold, and in
general in such manner, at such time or times, at such place or places and on
such terms as the Lender may, in compliance with any mandatory requirements of
applicable law, determine to be commercially reasonable. Any of the Collateral
may be sold, leased or otherwise disposed of, in the condition in which the same
existed when taken by the Lender or after any overhaul or repair which the
Lender shall determine to be commercially reasonable at a public or private sale
or proceeding, or otherwise, by one or more contracts, in one or more parcels,
at the same or different times, for cash and/or credit and upon any terms, at
such places and times and to such persons as the Lender deems best, and for that
purpose the Lender may enter peaceably any premises on which the Collateral or
any part thereof may be situated and remove the same therefrom and the Obligor
will not resist or interfere with such action. If an Event of Default shall have
occurred and be continuing, the Lender may require the Obligor to assemble
and/or remove the Collateral and make it available to the Lender at a place to
be designated by the Lender which is reasonably convenient to both parties. The
Obligor hereby agrees that its address and the place or places of location of
the Collateral are places reasonably convenient to it to assemble the
Collateral. Unless the Collateral is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, if an
applicable statute requires reasonable notice of sale or other disposition, the
Lender will send to the Obligor reasonable notice of the time and place of any
public sale or reasonable notice of the time after which any private sale or any
other disposition thereof is to be made. The Obligor agrees that requirement of
sending reasonable notice shall be met if such notice is mailed, postage
prepaid, to the Obligor at least ten (10) days before the time of the sale or
disposition. If an Event of Default shall have occurred and be continuing, the
Lender may at any time in its discretion transfer any property constituting
Collateral into its own name or that of its nominee and receive the income
thereon and hold the same as security for the Liabilities. To the extent
permitted by any law, the Lender may itself bid for and purchase the Collateral
or any item thereof offered for sale in accordance with this Section without
accountability to the Company (except to the extent of surplus money received as
provided in Section 9(f)).

9(d) The Obligor recognizes that the Collateral may not be readily
marketable and may not be marketable at all if an Event of Default has occurred.
Therefore, in order to enable the Lender to use such means as it may determine
necessary or advisable to realize upon the Collateral from time to time, the
Obligor consents that the Lender may use whatever means it may reasonably
consider necessary or advisable to sell any or all of the Collateral at any time
or times after default thereunder, including but not restricted to the giving of
an option to purchase any or all of the Collateral to any party and the
extending of credit to any purchaser of such Collateral. The Lender may sell any
or all of the Collateral or commit itself to sale without limiting the amount
sold to the amount of indebtedness secured thereby, plus costs and expenses of
collection.

9(e) The Lender may appropriate, set off and apply to the payment of
the Liabilities, any Collateral in or coming into the possession of the Lender
or its agents, without notice to the Obligor and in such manner as the Lender
may in its discretion determine.

9(f) The proceeds of any Collateral obtained pursuant to Section
2(a), 7(k) or 9(b) or disposed of pursuant to Section 9(c) shall be applied as
follows:

-15-
<PAGE> 16

(i) to the payment of any and all expenses and
fees (including reasonable actual attorneys' fees and expenses)
incurred by the Lender in obtaining, taking possession of, removing,
insuring, repairing, storing and disposing of Collateral and any and
all amounts incurred by the Lender in connection therewith;

(ii) next, any surplus then remaining to the
payment of the Liabilities in such order as the Lender may determine
(subject to any statutory requirements), and the Obligor shall remain
liable for, and shall pay on demand, any deficiency; and

(iii) after payment in full of all amounts due
under subparagraphs 9(f)(i) and 9(f)(ii) above, any surplus then
remaining shall be paid to the Obligor, subject, however, to the rights
of the holder of any then existing Lien of which the Lender has actual
notice (without investigation).

9(g) Each and every right, power and remedy hereby specifically
given to the Lender shall be in addition to every other right, power and remedy
specifically given under this Agreement or under the other Security Documents or
now or hereafter existing at law or in equity, or by statute and each and every
right, power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time or simultaneously and as often and in such
order as may be deemed expedient by the Lender. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of exercise of
one shall not be deemed a waiver of the right to exercise of any other or
others. The Lender may exercise its rights with respect to Collateral without
resorting to or regard to other Collateral or sources of reimbursement for any
of the Liabilities. No delay or omission of the Lender in the exercise of any
such right, power or remedy and no renewal or extension of any of the
Liabilities shall impair any such right, power or remedy or shall be construed
to be a waiver of any Default or Event of Default or an acquiescence therein. In
the event that the Lender shall bring any suit to enforce any of its rights
hereunder and shall be entitled to judgment, then in such suit the Lender may
recover reasonable expenses, including attorneys' fees, and the amounts thereof
shall be included in such judgment.

9(h) In case the Lender shall have instituted any proceeding to
enforce any right, power or remedy under this Agreement by foreclosure, sale,
entry or otherwise, and such proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Lender,
then and in every such case the Obligor, the Lender and each holder of any of
the obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Lender shall continue
as if no such proceeding had been instituted.

SECTION 10. Waivers.

10(a) Except as otherwise provided in this Agreement, THE OBLIGOR
HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE

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<PAGE> 17

OR JUDICIAL HEARING IN CONNECTION WITH THE LENDER'S TAKING POSSESSION OR THE
LENDER'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION,
ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND
ANY SUCH RIGHT WHICH THE OBLIGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR
ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and the Obligor hereby further
waives:

(i) all damages occasioned by such taking of
possession except any damages which are the direct result of the
Lender's gross negligence or willful misconduct;

(ii) all other requirements as to the time, place
and terms of sale or other requirements with respect to the enforcement
of the Lender's rights hereunder; and

(iii) all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or hereafter in force
under any applicable law in order to prevent or delay the enforcement
of this Agreement or the absolute sale of the Collateral or any portion
thereof, and the Obligor, for itself and all who may claim under
insofar as it or they, now or hereafter, lawfully may, hereby waives
the benefit of all such laws.

Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the Obligor therein and thereto, and
shall be a perpetual bar both at law and in equity against the Obligor and
against any and all Persons claiming or attempting to claim the Collateral so
sold, optioned or realized upon, or any part thereof, from, through and under
the Obligor.

10(b) The Obligor waives demand, notice, protest, notice of
acceptance of this Agreement, notice of loans made, credit extended, Collateral
received or delivered or other action taken in reliance hereon and all other
demands and notices of any description except as hereinbefore provided. With
respect to Liabilities and Collateral, the Obligor assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of Collateral, to the addition or release of
any party or person primarily or secondarily liable, to the acceptance of
partial payments thereon and the settlement, compromising or adjusting of any
thereof, all in such time or times as the Lender may deem advisable. The Obligor
waives all rules of suretyship law and any other law whatsoever which is legally
permitted to be waived and which would, if not waived, impair the Lender's
enforcement of its security interests hereunder. By way of example, but not in
limitation of the Lender's rights under this Security Agreement, subject to the
terms and conditions of this Security Agreement and the Credit Agreement, the
Lender may do any of the following without notice to the Obligor (unless such
notice or other action is otherwise required pursuant to any of the Loan
Documents to which the Obligor is a party):

(i) change, renew or extend the time for payment of all
or any part of the Liabilities;

-17-
<PAGE> 18

(ii) change any provision with respect to all or any part
of the Liabilities;

(iii) release, surrender, sell or otherwise dispose of any
money or property which is in the Lender's possession as collateral
security for the Liabilities;

(iv) fail to perfect a security interest in any property
which is pledged or mortgaged as security for payment of the
Liabilities;

(v) release or discharge any party liable to the Lender
in whole or in part for the Liabilities, or accept any additional
parties or guarantors;

(vi) delay or refrain from exercising any of the Lender's
rights;

(vii) settle or compromise any and all claims pertaining to
the Liabilities and the Collateral; and

(viii) apply any money or property of the Obligor or that of
any other party liable to the Lender for any part of the Liabilities in
any order the Obligor chooses.

10(c) The Lender shall have no duty as to the collection or
protection of Collateral not in the Lender's possession, and the Lender's duty
with reference to Collateral in its possession shall be to use reasonable care
in the custody and preservation of such Collateral, but such duty shall not
require the Lender to do any of the following (although the Lender is authorized
to reasonably undertake any such action if the Lender deems such action
appropriate):

(i) exercise any rights under the Collateral or
act upon any request made by the Obligor;

(ii) collect any sums due on the Collateral;

(iii) notify the Obligor of any maturities or other
similar matters concerning the Collateral; or

(iv) preserve or protect the Obligor's rights in
the Collateral or take any action to protect any of the Collateral
against claims of others or to preserve rights against prior parties.

SECTION 11. Indemnity and Costs and Expenses.

11(a) The Obligor agrees to pay, or reimburse the Lender for any and
all fees, costs and expenses of whatever kind or nature incurred in connection
with (i) the enforcement or attempted enforcement of the Lender's rights under
this Security Agreement, and (ii) the creation, preservation or protection of
the Lender's Liens on, and security interest in, the Collateral, including,
without limitation, all fees and taxes in connection with the recording or
filing of instruments and documents in public offices, payment or discharge of
any taxes or Liens upon or in respect of the Collateral, premiums for insurance
with respect to the Collateral and all

-18-
<PAGE> 19

other fees, costs and expenses in connection with protecting, maintaining or
preserving the Collateral and the Lender's interest therein, whether through
judicial proceedings or otherwise, or in defending or prosecuting any actions,
suits or proceedings arising out of or relating to the Collateral.

11(b) Without limiting the application of Section 11(a) hereof, the
Obligor agrees to pay, indemnify and hold the Lender (herein, the "Indemnitee")
harmless from and against any loss, costs, damages and expenses which any such
Indemnitee may suffer, expend or incur in consequence of or growing out of any
misrepresentation by the Obligor in this Agreement or any of the other Loan
Documents or in any statement or writing contemplated by or made or delivered
pursuant to or in connection with this Agreement or any of the other Security
Documents or any breach by the Obligor of this Agreement or any of the other
Loan Documents.

11(c) If and to the extent that the obligations of the Obligor under
this Section 11 are unenforceable for any reason, the Obligor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.

11(d) Any amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement shall constitute Liabilities secured by the
Collateral. The indemnity obligations of the Obligor contained in this Section
11 shall continue in full force and effect notwithstanding the full payment of
all Liabilities and notwithstanding the discharge thereof.

SECTION 12. [Intentionally Omitted]

SECTION 13. Successors and Assigns. The covenants, representations,
warranties and agreements herein set forth shall be binding upon the Obligor,
its legal representatives, successors and assigns, and shall inure to the
benefit of the Lender and its successors and assigns. The successor of the
Lender hereunder shall forthwith become vested with and shall be entitled to
exercise all the powers and rights given by this Agreement to the Lender, as if
said successor were originally named as secured party herein.

SECTION 14. Lender May Perform. If Obligor fails to perform any
agreement contained herein, the Lender may itself perform, or cause performance
of, such agreement, and the expenses of the Lender incurred in connection
therewith shall be payable by Obligor on demand.

SECTION 15. No Waiver; Remedies. No failure on the part of the Lender
to exercise, and no delay in exercising, and no course of dealing with respect
to, any right, power, or remedy under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder and
under any of the other Loan Documents preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege. The remedies
provided herein and in the other Loan Documents are cumulative and not exclusive
of any remedies provided by law.

SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE

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<PAGE> 20

STATE OF NEW YORK WITHOUT REGARD TO ANY CHOICE OF LAW RULES WHICH WOULD REQUIRE
THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION EXCEPT TO THE EXTENT THAT
THE LAWS OF THE JURISDICTIONS WHERE THE COLLATERAL IS LOCATED APPLY TO THE
CREATION, ATTACHMENT, PERFECTION, PRIORITY AND ENFORCEMENT OF LIENS ON AND
SECURITY INTERESTS IN THE COLLATERAL.

SECTION 17. Severability. If any provision hereof shall be held to be
invalid, illegal or unenforceable in any jurisdiction, then, to the fullest
extent permitted by law, (i) the other provisions hereof shall remain in full
force and effect in such jurisdiction, and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.

SECTION 18. Amendments. None of the terms or provisions of this
Security Agreement may be waived, altered, modified, or amended except by an
agreement in writing signed by the Lender and the Obligor.

SECTION 19. Notices. All notices, statements, requests and demands
herein provided for shall be in writing and shall be deemed to have been given
or made when delivered to the respective addresses and in the manner specified
in Section 9.01 of the Credit Agreement.

SECTION 20. Counterparts. This Agreement may be executed in any number
of counterparts, all of which, when taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.

SECTION 21. Termination. When all Liabilities shall have been paid in
full and the Guarantee has expired or been terminated, this Agreement shall
terminate, and the Lender shall cause to be assigned, transferred and delivered,
against receipt but without any recourse, warranty or representation whatsoever,
any remaining Collateral and money received in respect thereof, to or for the
account of the Obligor. The Lender shall also execute and deliver to the Obligor
upon such termination such UCC termination statements and such other
documentation as shall be reasonably requested as necessary by the Obligor to
effect the termination and release of the Liens on the Collateral, all at the
expense of the Obligor.

-20-
<PAGE> 21

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date and year
first above written.

CAMINUS CORPORATION

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

FLEET BANK, N.A.,
as Lender

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

-21-

<PAGE> 1
Exhibit 10.53

EXCHANGE AGREEMENT

This Exchange Agreement (this "Agreement"), dated as of January 21,
2000, by and among OCM Caminus Investment, Inc., a Delaware corporation ("OCM
Investment") and Caminus Corporation, a Delaware corporation ("Caminus
Corporation").

WHEREAS, OCM Investment is a member of Caminus LLC, a Delaware limited
liability company ("Caminus LLC"), and holds approximately 40% of its membership
interests;

WHEREAS, Caminus LLC intends to enter into a transaction whereby the
legal status of Caminus LLC will be reorganized from a limited liability company
into a subchapter C corporation through a merger of Caminus LLC with and into
Caminus Corporation, and all of the membership interests in Caminus LLC will be
converted into common stock of Caminus Corporation (the "Reorganization");

WHEREAS, immediately prior to the Reorganization, OCM Investment wishes
to transfer all of its assets, consisting solely of membership interests in
Caminus LLC, to Caminus Corporation solely in exchange for common stock of
Caminus Corporation (the "Exchange") in a transaction intended to qualify as a
"reorganization" within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the "Code"), and Caminus Corporation desires
to effect such Exchange;

NOW, THEREFORE, in consideration of the mutual covenants set forth, the
parties hereto agree as follows:

1. The Exchange
------------

(a) Immediately prior to the Reorganization, OCM Investment
shall transfer to Caminus Corporation all of OCM Investment's
membership interests in Caminus LLC, its sole asset, in exchange for
common stock of Caminus Corporation (the "Shares"). Each share of
membership interest in Caminus LLC will be exchanged for 0.095238 of
one share of Caminus Corporation common stock.

(b) The parties hereto acknowledge that this Agreement is part
of a plan of reorganization, which reorganization is intended to
qualify as a "reorganization" within the meaning of Code Section
368(a)(1)(C).

(c) Although the Exchange is scheduled to occur immediately
prior to the Reorganization, the Exchange shall be deemed not to have
occurred, and the closing of the Exchange shall be rescinded, if the
Reorganization is not consummated immediately after the Exchange.

(d) Immediately after receipt of the Shares, OCM Investment
shall liquidate its assets and in connection with such liquidation,
distribute the Shares to its sole shareholder, OCM Principal
Opportunities Fund, L.P.

<PAGE> 2

2. Representations
---------------

(a) OCM Investment is an "accredited investor" as defined in
Rule 501(a) under the Securities Act.

(b) OCM Investment and Caminus Corporation each has full power
and authority to enter into and to perform this Agreement in accordance
with its terms.

(c) OCM Investment had carefully reviewed the representations
made by Caminus Corporation contained in this Agreement and has made
detailed inquiry concerning the Company, its business and its
personnel; the officers of Caminus Corporation have made available to
OCM Investment any and all written information requested by OCM
Investment and have answered to OCM Investment's satisfaction all
inquiries made by it; and OCM Investment has sufficient knowledge and
experience in finance and business such that it is capable of
evaluating the risks and merits of its investment in Caminus
Corporation, and OCM Investment is able financially to bear the risks
thereof.

3. Miscellaneous
-------------

(a) This Agreement may be terminated by any party prior to the
consummation of the Exchange.

(b) This Agreement may be amended, supplemented or modified
with the consent of each party hereto.

2
<PAGE> 3

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

OCM CAMINUS INVESTMENT, INC.

By: /s/ Kenneth Liang
---------------------------
Name: Kenneth Liang
Title: Vice President

By: /s/ B. James Ford
---------------------------
Name: B. James Ford
Title: Vice President

CAMINUS CORPORATION

By: /s/ Mark A. Herman
---------------------------
Name: Mark A. Herman
Title: CFO

<PAGE> 1
Exhibit 21.1

SUBSIDIARIES OF THE REGISTRANT

Company Jurisdiction
------- ------------

1. Caminus Limited United Kingdom
(subsidiary of the Registrant)

2. DC Systems, Inc. Texas
(subsidiary of the Registrant)

3. Caminus Energy Limited United Kingdom
(subsidiary of Caminus Limited)

4. Zai*Net Software Limited United Kingdom
(subsidiary of Caminus Limited)

5. Caminus Consultants Limited United Kingdom
(subsidiary of Caminus Limited)

6. DCS*Gasnet Corporation Texas
(subsidiary of DC Systems, Inc.)

7. Caminus/DC Acquisition Corp. Delaware

<PAGE> 1
Exhibit 23.2

Consent of Independent Accountants
----------------------------------

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated May 28, 1999, except as
to the fourth and fifth paragraphs of Note 1 which are as of November 12, 1999,
relating to the consolidated financial statements and financial statement
schedule of Caminus LLC, and of our report dated August 28, 1998, relating to
the financial statements of ZAI*NET Software, Inc., which appear in such
Prospectus. We also consent to the references to us under the headings
"Experts" and "Selected Consolidated Financial Data" in such Registration
Statement. However, it should be noted that PricewaterhouseCoopers LLP has not
prepared or certified such "Selected Consolidated Financial Data."

PricewaterhouseCoopers LLP

New York, New York
January 21, 2000

<PAGE> 1
Exhibit 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1 of our
report dated 30 September 1998, relating to the financial statements of Caminus
Limited (formerly Caminus Energy Limited), which appear in such Registration
Statement. We also consent to the reference to us under the heading "Experts" in
such Registration Statement.

PETERS, ELWORTHY & MOORE
Cambridge, United Kingdom
20 January 2000

<PAGE> 1
Exhibit 23.4

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1 of our
reports dated October 5, 1999, relating to the consolidated financial statements
of DC Systems, Inc. and Subsidiary, which appear in such Registration
Statement. We also consent to the references to us under the headings "Experts"
and "Selected Consolidated Financial Data" in such Registration Statement.

PricewaterhouseCoopers LLP

Dallas, Texas
January 21, 2000