<PAGE>

================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-K

(Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                   For the fiscal year ended December 31, 2002

                                       or

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

           For the transition period from ____________ to ____________.

                        Commission file number 000-28085

                               Caminus Corporation
             (Exact name of Registrant as specified in its charter)

           Delaware                                              13-4081739
(State or other jurisdiction of                                 (IRS employer
incorporation or organization)                               identification no.)

                                825 Third Avenue
                            New York, New York 10022
              (Address of principal executive offices and zip code)

               Registrant's telephone number, including area code:
                                 (212) 515-3600

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $.01 par value

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X] No [_]

     The aggregate market value of the common equity held by non-affiliates of
the registrant, computed using the closing sale price of common stock on June
28, 2002, as reported on the Nasdaq National Market, was approximately
$111,459,304 (affiliates included for this computation only: directors,
executive officers and holders of more than 5% of the registrant's common
stock).

     The number of shares outstanding of the registrant's common stock as of
June 28, 2002 was 19,118,234.

                       Documents Incorporated by Reference

     None.

================================================================================



<PAGE>

                               CAMINUS CORPORATION

                            Index to Annual Report on
                            Form 10-K filed with the
                       Securities and Exchange Commission
                          Year Ended December 31, 2002

                               Items in Form 10-K

<TABLE>
<CAPTION>
          Item                                                                                                Page
          ----                                                                                                ----
<S>              <C>                                                                                           <C>
Part I.    1.    Business..................................................................................     2
           2.    Properties................................................................................    15
           3.    Legal Proceedings.........................................................................    16
           4.    Submission of Matters to a Vote of Security Holders.......................................    16
                 Executive Officers of the Registrant......................................................    16
Part II.   5.    Market for Registrant's Common Equity and Related Stockholder Matters.....................    17
           6.    Selected Financial Data...................................................................    18
           7.    Management's Discussion and Analysis of Financial Condition and Results of Operations.....    19
           7A.   Quantitative and Qualitative Disclosures About Market Risk................................    35
           8.    Financial Statements and Supplementary Data...............................................    35
           9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure......    35
Part III.  10.   Directors and Executive Officers of the Registrant........................................    36
           11.   Executive Compensation....................................................................    37
           12.   Security Ownership of Certain Beneficial Owners and Management............................    43
           13.   Certain Relationships and Related Transactions............................................    45
           14.   Controls and Procedures...................................................................    49
Part IV.   15.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K..........................    49
Signatures.................................................................................................    51
</TABLE>


                                       i



<PAGE>

          This annual report, including the documents incorporated by reference
into this annual report, contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of historical facts,
included in this annual report, or in documents incorporated by reference into
this annual report, regarding our strategy, future operations, financial
position, future revenues, projected costs, prospects, plans and objectives of
management are forward-looking statements. The words "anticipates," "believes,"
"estimates," "expects," "predicts," "potential," "intends," "continue," "may,"
"plans," "projects," "will," "should," "could," "would" and similar expressions
are intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. We cannot guarantee
that we actually will achieve the plans, intentions or expectations disclosed in
our forward-looking statements, and you should not place undue reliance on our
forward-looking statements. Forward-looking statements are inherently subject to
risks, uncertainties and assumptions. Actual results or events could differ
materially from the plans, intentions and expectations disclosed in the
forward-looking statements that we make. We have included important factors in
the cautionary statements included in this annual report, particularly under the
heading "Management's Discussion and Analysis of Financial Condition and Results
of Operations--Certain Factors that May Affect Our Business," that we believe
could cause actual results or events to differ materially from the
forward-looking statements that we make. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers, dispositions,
joint ventures or investments that we may be a party to or make. We do not
assume any obligation to update any forward-looking statements. You should also
carefully review the risks outlined in other documents that we file from time to
time with the Securities and Exchange Commission.

          We use the following registered trademarks: Caminus('r'), Altra('r'),
AltraNet('r'), Aces('r'), and Zai*Net('r'). We also use the following
trademarks: Zai*Net Software('TM'), Zai*Net Manager('TM'), Zai*Net Risk
Analytics('TM'), Zai*Net Physicals('TM'), Zai*Net Models('TM'),
WeatherDelta('TM'), Zai*Net GasMaster II('TM'), Gas*Master('TM'),
PowerMarkets('TM'), PowerOptions('TM'), GasOptions('TM'), ProjectFinance('TM'),
Power*Master('TM'), Zai*Net PowerMaster('TM'), Plant*Master('TM'),
StoreFront('TM'), Nucleus('TM'), Nucleus Software('TM'), Nucleus Manager('TM'),
Nucleus Risk Analytics('TM'), Nucleus Physicals('TM'), Altra('TM'), Altra
Software('TM'), Altra Gas('TM'), Altra Power('TM'), Altra Pipeline('TM'),
Altra Web('TM'), and Altra WebExchange('TM'), Caminus Gas('TM'), Caminus
Power('TM'), Caminus Pipeline('TM'), Caminus Web('TM'), Caminus ETM, and
Caminus WebExchange('TM'). All other trademarks and registered trademarks
used in this annual report are the property of their respective owners.

          We use market data, industry forecasts, and industry projections
throughout this annual report, which we have obtained from market research,
publicly available information and industry publications. These sources
generally state that the information that they provide has been obtained from
sources believed to be reliable, but that the accuracy and completeness of such
information are not guaranteed. The forecasts and projections included in this
annual report are based on industry surveys and the preparers' experience in the
industry, and there is no assurance that any of the projected amounts will be
achieved. Similarly, while we believe that the surveys and market research that
others have performed are reliable, we have not independently verified this
information.


                                       1



<PAGE>

                                     PART I

Item 1. Business

Recent Developments

          On January 20, 2003, the Company entered into an agreement for the
acquisition by SunGard Data Systems Inc. ("SunGard") of all the shares of the
Company for $9.00 per share in cash (the "Merger Agreement"). Pursuant to the
Merger Agreement, a wholly owned subsidiary of SunGard commenced a cash tender
offer to acquire all of the Company's outstanding shares at a price of $9.00 per
share. The tender offer is pending. Following successful completion of the
tender offer, any remaining shares of the Company will be cancelled and
converted into the right to receive the same price in a cash merger (the
"Merger"). The consummation of the transaction is subject to customary
conditions, including the tender of at least a majority of the outstanding
shares of the Company in the tender offer.

Overview

          We are a leading provider of software and software services that
facilitate energy transaction processing, risk management, analytics and
decision support within the wholesale energy markets. Our integrated software
solutions enable energy companies to more efficiently and profitably trade and
schedule energy, streamline transaction management, manage complex risk
scenarios, and make optimal operational decisions. Our software can be used by
any entity that buys, sells, delivers, or takes a position in energy. We believe
that we offer the broadest array of integrated software solutions available in
the marketplace today. We serve customers in every segment of the wholesale
energy industry, including traders, marketers, generators, producers, gatherers,
processors, pipeline companies, utilities, distribution companies, and public
agencies. We currently have approximately 250 customers, including Consolidated
Edison, Exelon, Conoco, Endesa, Royal Dutch/Shell, and Southern California
Edison.

          Our products cover all functional areas across the energy value chain,
including production, analytics and decision support, trading, risk, scheduling,
operations, settlement, invoicing, and accounting. Our software also handles all
major commodities and related products, including natural gas, or gas, electric
power, or power, oil, coal, emissions, and weather derivatives, as well as all
major traded instruments, from simple spot deals to complex financial
derivatives such as options and swaps.

          We have built a depth of industry expertise that we believe is
unmatched in the energy trading, transaction processing, and risk management
software markets. Focused exclusively on the energy markets since our inception,
we have built a team of approximately 400 individuals located primarily in
Houston, New York and London. The majority of our professionals are dedicated to
understanding competitive market requirements, mastering the intricacies of
energy risk management, and studying regulatory and market trends. The result is
a portfolio of software products and services that serves the unique needs of
companies operating in today's competitive wholesale energy markets.

Industry Background: Competitive Wholesale Energy Markets

   Introduction

          The energy industry comprises one of the largest vertical markets in
the United States and Europe. While the annual retail market for power and gas
in the United States currently stands at more than $350 billion according to the
U.S. Department of Energy, Energy Information Administration, or EIA, the traded
wholesale market for these physical commodities is several times greater. By the
time the final sale is made to end-users, every molecule of gas and electron of
power will likely have been bought and sold several times. Traditionally,
vertically integrated energy market participants have captured the entire power
and gas market by controlling the value chain from exploration and generation to
distribution and settlement. However, over the past two decades, governments in
the United States and Europe have significantly reduced the regulation of the
power and gas markets


                                       2



<PAGE>

in order to stimulate competition. As a result, in some markets competitive
wholesale energy markets have emerged, as transactions that were previously
internal to integrated energy enterprises have now become arms-length business
transactions between different entities along the value chain.

          In the United States, deregulation of the gas industry began in the
1980s, when distributors of gas were relieved of their obligation to purchase
gas supplies from pipeline companies. The result was the entry of a new wave of
gas marketers into the wholesale markets. According to the EIA, from 1986 to
1994, the number of wholesale marketers grew from 51 to 353 entities. The
wholesale gas market continued to grow through deregulation during the 1990s
when pipelines were required to unbundle transportation and product sales. More
recently, the wholesale U.S. power market was opened to competition through
deregulation beginning in the mid-1990s. The Federal Energy Regulatory
Commission's mandate for open access to the transmission network resulted in the
rise of independent merchant generators as well as power marketers who buy and
sell power without owning any generation assets. At the retail level, each state
has taken its own approach and timing to deregulation. According to the EIA, 24
states have enacted some form of legislation addressing retail electric
deregulation, and 22 states have enacted similar legislation concerning retail
gas.

          The governments of Europe have also been opening their energy markets
to competition, fostering an active and growing wholesale trading market. At the
retail level, deregulation has already occurred in the United Kingdom and
Germany. In addition, the European Commission has issued a number of directives
calling for wholesale and retail deregulation of energy markets across
continental Europe over the next four years. The European Commission's
directives require a fully deregulated power market for business consumers by
2003, for gas business users by 2004, and for all power and gas consumers by
2005. These directives are expected to generate considerable momentum towards
continued deregulation in European Union member states, which include the
significant energy markets of Spain, Italy, and France.

   Emerging Trends

          The past year has seen a significant change in the competitive
wholesale energy markets. These markets continue to be very active--wholesale
energy transactions will always be necessary as long as multiple players along
the value chain must buy, sell, and schedule energy. However, the nature of the
participants and the market dynamics shifted during the course of 2002.

          o    The increased importance of physical asset players. The year 2002
               was extremely challenging for energy market participants who
               operated under the assumption that assets mattered little and
               that simply creating exposure and profit opportunity via trading
               was the optimal approach. In the wake of Enron, many pure trading
               companies found themselves facing more strenuous collateral
               obligations and/or counterparty credit requirements. And many
               counterparties themselves were scaling down their trading
               organizations, making it more difficult to find a trading
               counterparty. Most importantly, the credit ratings agencies were
               no longer willing to assign high debt ratings to companies whose
               cash flows were contingent upon purely speculative trading with
               no hard assets to provide collateral. As a result, the market
               participants who own the physical assets--thereby enabling them
               to both provide colleteral to the more demanding capital markets
               as well as providing them ready access to supply enabling them to
               ride out any rough waters--have emerged as the most financially
               stable and commercially attractive to investors. This is not to
               say that the physical players are simply returning to the days of
               vertically integrated utilities. Nor does this mean that these
               physical asset players are exiting the wholesale trading market
               and sourcing all of their transactions in-house. They are doing
               neither. On the first point, FERC requires that transactions
               between affiliated entities of the same company (i.e. the
               regulated utility subsidiary wants to buy power from the
               unregulated merchant generator subsidiary, both of the same
               parent company) to be arms-length transactions. In essence, there
               are wholesale transactions within the same company. But for a
               company that owns the assets, they have the luxury of knowing
               they have a stable, credit worth counterparty--their own
               subsidiary. And on the second point, physical asset owners are
               not exiting the trading market, but rather trading around their
               assets and leveraging their financial strength for increasing
               market advantage.


                                       3



<PAGE>

          o    The entrance of financial institutions into the energy markets.
               The asset-light energy trading model may be more difficult in the
               post-Enron era. Counterparties are reluctant to trade without
               sometimes onerous collateral requirements. However, financial
               institutions have the massive resources and credit worthiness
               necessary to participate in such an uncertain environment. While
               counterparties may be reluctant to extend credit to a pure energy
               trading shop with no assets, a trading floor of a bank or
               financial institution with billions of financial capital is a
               much more attractive proposition. Not only can these financial
               institutions easily meet any collateral requirements, but their
               credit worthiness per se makes onerous collateral requirements
               even less relevant or necessary. Financial institutions are
               uniquely positioned both in terms of liquidity and also relevant
               expertise. They are skilled in the practices of risk management
               and trading. This mix of financial strength and core
               trading-related capabilities has resulted in the emergence of the
               financial institutions as an increasingly important energy
               trading segment. Banks and hedge funds such as Bank of America
               and Citadel Investment Group have entered the wholesale trading
               market. These firms are beginning to understand that there is a
               vacuum created by the stumble of the larger energy traders. This
               is a profit opportunity that is not going unnoticed.

          o    The active market for physical assets. The last year has seen a
               flurry of activity in the acquisition and divesture of energy
               physical plants, including power generators, gas pipelines, and
               natural gas storage facilities. The increasing importance of
               physical assets in the role of the wholesale trading business
               model, as well as the financial pressure many of the publicly
               traded companies faced to improve their balance sheets, resulted
               in a fairly active market for the buying and selling of assets.
               Companies needing to raise capital and reduce debt unloaded
               assets to financially healthy players who were able to take
               advantage of the market conditions. The year saw MidAmerican
               Energy purchase significant pipeline assets, as well as smaller
               purchases made by AIG. The wholesale market will continue to
               exist--and must--to support the energy transactions that will
               continue among the different owners of these assets. These assets
               are still producing energy, and the demand in North America has
               not decreased. It is simply a new set of more financially healthy
               owners who are gaining market share in this space.

          o    The breakup of vertically integrated providers. In order to
               remain competitive and take advantage of deregulation, over the
               past several years traditional utilities are breaking up to focus
               on specific pieces of the energy value chain. Electrical power
               generation and gas production assets have been sold, marketing
               affiliates have been created, new merchant power producers have
               been spun off, and separate competitive retail electric providers
               have emerged from local distribution utilities. Transactions
               previously controlled by a single vertically integrated provider
               are now handled by a variety of unrelated market participants. In
               the U.S. power market, for example, according to the EIA, the
               share of generation controlled by utilities has fallen from 89%
               in 1998 to 71% in 2001. In some regions, electric power is being
               sold by generators into electric power pools and is then
               purchased from the pool by electric power marketers and
               end-users. In other cases, competing suppliers negotiate
               contracts with end-users directly.

          o    Convergence of power and gas markets. The EIA estimates that 88%
               of generation capacity added in the United States over the next
               20 years will be gas-fired plants. According to the EIA, gas will
               grow from accounting for 13% of power production to 28% by 2020.
               This sharp increase in gas-fired generation links prices and
               risks across gas and power, with volatility in either commodity
               directly impacting the other. Changes in the price of gas will
               directly impact the price of power, and changes in the demand for
               power will directly impact the price of gas. As a result, energy
               market participants will increasingly be forced to manage risks
               across commodities, even if they do not participate in all
               markets. The convergence of the two markets has been illustrated
               by recent corporate restructuring activity. Between 1997 and
               2000, 23 mergers between primarily gas and primarily power
               businesses occurred as experienced gas marketers attempted to
               leverage their expertise in the more recently deregulated
               wholesale power markets.


                                       4



<PAGE>

          o    Increased exposure to risk. The development of competitive
               wholesale energy markets and the turmoil of the markets in the
               past year have created new types and levels of risk. As wholesale
               supply has moved towards arms-length transactions instead of
               vertically integrated supply chains, participants have been
               exposed to, and in some cases profited from, significant price
               volatility. For example, substantial price volatility has been
               experienced in power markets, partly due to the unique nature of
               the commodity. Power is worth different amounts in different
               locations, cannot be stored in significant quantities
               economically or transported long distances economically, and
               costs of generation and transmission vary significantly. Demand
               can vary dramatically by time of day, day of week, and weather
               conditions. All of these factors contribute to substantial price
               volatility, and, thus, growing risk exposure. The summer of 1998
               saw the wholesale prices of power in the midwestern United States
               increase from $25 per megawatt hour, or Mwh, to over $7,500 per
               Mwh due to a record heat wave and transmission constraints.
               Similar price spikes were experienced in California during the
               winter of 2000-2001, resulting in rolling blackouts and financial
               crises for several California-based energy companies. Given that
               many participants effectively hold long or short positions,
               depending on whether they have energy obligations without
               controlling assets or have assets without firm obligations,
               exposure to price risk can be significant. Credit and cash flow
               risk have certainly emerged as important sources of risk in the
               past year. The default of counterparties, the increasingly
               burdensome collateral requirements, more frequent margin
               calls--all of these are risky events that have become
               increasingly common.

Our Market Opportunity

          Our opportunity is defined in large part by the structural changes
affecting the competitive wholesale energy markets.

          o    New players are entering the wholesale energy markets. There are
               an increasing number of financial institutions and energy asset
               owners entering wholesale energy markets. Although the past year
               has been a turbulent time for the market, the firms with the
               financial resources to take advantage of attractive pricing and
               the expertise to appropriately evaluate risk in this market have
               decided that this is an attractive opportunity. Of course, these
               new players will need the requisite software and systems
               necessary to physically manage these assets and assess the
               associated risk. Except for a few specific cases of mothballed
               power plants, assets remain in the market.

          o    The wholesale energy business has becoming increasingly complex.
               Participating in the wholesale energy markets has become an
               increasingly difficult proposition. The rapid pace of the market
               requires enterprises to constantly monitor various sources of
               risk, to interact with an ever changing pool of counterparties,
               to manage a continually shifting regulatory regime, to
               communicate with different market entities using different
               operating rules (e.g. various ISOs, then RTOs). The operational
               challenge of optimizing the operation of physical assets has only
               grown tougher as well. The market uncertainty, the changing
               market structures, and the skittish capital markets to finance
               these assets have all made the business problem of evaluating,
               operating, and optimizing assets more complex. Caminus has
               solutions that can address this growing need. Caminus analytics
               products are used to value and optimize assets and solve complex
               portfolio optimization problems. Caminus market interfaces are
               used by physical market participants who require electronic
               communication with counterparties, pipelines, and ISOs.
               Additionally, Caminus risk products help market participants
               evaluate and monitor a variety of risks using the latest
               methodologies.

          o    Regulators and investors are demanding more information.
               Regulatory agencies and the investment community are demanding
               more transparency from energy merchants. Quarterly wholesale
               electric power reports detailing transaction information and
               counterparties are now required by FERC. Investors and ratings
               agencies demand more visibility into risk exposure and earnings
               events. FASB requirements for hedge accounting of derivatives
               requires specific effectiveness testing and documentation. All of
               this additional reporting and visibility into the business
               requires effective systems that can capture and report
               information. Caminus transaction and risk management systems
               address this requirement.


                                       5



<PAGE>

          o    Deregulation has increased risk exposure for market participants.
               The development of wholesale energy markets has created new types
               and levels of risk faced by market participants, including as a
               result of significant price volatility such as that seen in the
               midwestern United States in 1998 and in California in 2000 and
               2001. In turn, organizations functioning within this new paradigm
               are increasingly turning to third-party provided software
               solutions to manage the increased types and levels of risk that
               they now face. Third-party provided software typically offers
               many benefits, including greater innovation, faster
               implementation, more frequent upgrades, subject matter
               specialization and expertise, and cost savings. As the complexity
               of the market continues to grow, we believe that the risks faced
               will become more difficult to manage, and that market
               participants will increasingly look to third-party provided
               software solutions and services in order to better compete in
               their respective markets.

          o    The increasing convergence of the power and gas markets is adding
               risk and complexity to wholesale energy markets. As gas-fired
               power plants account for an increasing percentage of total
               generating capacity, the two commodities are becoming
               increasingly interrelated. As a result there is an increasing
               demand for systems that can handle multiple energy commodities.
               Firms that were previously unconcerned about risks in "unrelated"
               markets now find that they need to manage risk across multiple
               markets, including some in which they do not directly
               participate. This interrelation between and among commodities,
               from a risk evaluation and management point of view, is further
               enhancing the need for sophisticated software solutions and
               related services.

          The emerging trends in the wholesale energy markets have resulted in a
substantial opportunity for providers of third-party trading, transaction
processing, and risk management software such as us. The increase in market
complexity, the emphasis on managing multiple energy-related risks, and the
convergence of energy commodity markets have fueled demand for third-party
software that can manage the transactions, processes, risks, and operational
challenges that market participants now face. This demand is further enhanced by
the fact that almost all wholesale market participants, with the exception of
gas pipeline companies, are devoid of legacy systems that can address the
challenges they face in the nascent competitive energy markets. These companies
thus need new software across their wholesale energy businesses.

Market Size

          The size and growth of the wholesale energy market is a key driver
behind the continued growth of the energy information technology market. The
wholesale physical energy trading market in North America was estimated at over
$1.4 trillion in 2001 by Forrester Research and was predicted to grow over 10%
annually for the foreseeable future. The European wholesale physical market is
estimated, according to industry publications, to be at least half the size of
the North American market. Furthermore, North American financial wholesale
energy transactions are valued at an additional $3.5 trillion annually according
to Forrester Research.

          The META Group estimates the worldwide market for energy trading,
transaction processing, and risk management software and services to be
approximately $2.5 billion annually. Based on our analysis and industry
research, we believe that a more conservative estimate of the North American and
European market for the types of products and services that we provide, from all
sources including third-party providers and in-house development, is
approximately $1.5 billion annually. The above estimates reflect only the
wholesale energy markets, and do not reflect penetration into other markets such
as the retail energy market.

   Number of Wholesale Energy Market Participants

          Based on U.S. Commerce Department data, U.S. Office of Pipeline Safety
data, U.S. Department of Energy reports, and industry publications, there are
over 4,000 wholesale energy market participants in the United States. These
range from leading marketers and pipelines to small municipalities and gathering
companies. The majority of these entities are potential customers for our
current products and services. The META Group estimates that 121 of these
entities are major market participants with annual revenues of more than $1.0
billion, 100 of these entities have annual revenues of between $500 million and
$1.0 billion, and 206 of these entities have annual revenues of between $250
million and $500 million. We believe that the competitive


                                       6



<PAGE>

European wholesale energy markets have experienced a similar proliferation in
the number of market participants.

   Categories of Wholesale Energy Market Participants

          The categories of wholesale energy market participants who are
potential customers of our products and services include:

<TABLE>
<CAPTION>
Market                                              Participants
------                                              ------------
<S>                                                 <C>
Power............................................   Power generating companies
                                                    Merchant power producers
                                                    Utilities
                                                    Independent system operators
                                                    Power pools
                                                    Public power agencies
                                                    Transmission companies
                                                    Distribution companies
                                                    Marketers
                                                    Municipalities

Related Commodities..............................   Oil producers and marketers
                                                    Coal producers and marketers

Gas..............................................   Producers
                                                    Gatherers
                                                    Processors
                                                    Storage operators
                                                    Pipeline companies
                                                    Distribution companies
                                                    Marketers
                                                    Retailers

Energy Trading...................................   Commodity exchanges
                                                    Over-the-counter traders
                                                    Brokers
                                                    Financial institutions
                                                    Commodities traders
</TABLE>

Our Strategy

          Our goal is to be the leading provider of trading, transaction
processing, and risk management software solutions to the global energy market.
To achieve our goal, we intend to:

          o    Extend Our Product Leadership. Our products and services are
               largely differentiated by the fact that they have been designed
               and built exclusively for the wholesale energy markets. We
               believe this is a critical point of distinction as the wholesale
               energy markets have many unique requirements, in terms of both
               functionality and flexibility, which generally do not lend
               themselves to more generic solutions. We provide customers with a
               suite of specialized, innovative and highly sophisticated
               products and services that deliver substantial added value and
               meet their specific needs.

          o    Extend Our Product Integration. A guiding principle of our
               strategy is to build on our position as the only complete
               solution for all energy market participants by strengthening our
               product integration as well as our product line's
               interoperability with other systems. By successfully implementing
               this strategy, the Caminus product line will continue to enhance
               its competitive advantage over point solutions typically offered
               by other energy industry software vendors.


                                       7



<PAGE>

          o    Establish Technology Leadership. We plan to continue to enhance
               our position as a leading software technology provider to energy
               market participants. We plan to translate our investment in our
               next generation energy transaction management platform into
               continued technology leadership by using the platform to connect
               Caminus products with each other and to enable energy companies
               to achieve front-, mid-, and back- office system integration. We
               also plan to expand our leadership in the area of Energy
               Analytics by establishing Caminus analytics as a standard and by
               customizing our Analytics offering to serve the needs of the new
               financial market entrants into the energy space.

          o    Build a Global Distribution Channel. We aim to build on the
               success we have achieved in the North American marketplace by
               opportunistically expanding into other worldwide markets,
               including the Pacific Rim and Latin America.

          o    Develop Strategic Alliances. Through our recently developed
               Caminus Alliance Partner program (CAP), we plan to enhance our
               sales and development efforts by forming strategic alliances with
               major system integration and services firms. This expanded
               alliance effort will provide substantial benefits to our
               customers, further distinguish us from the competition, and help
               to generate more customer leads for our sales team. We also plan
               to partner with other technology companies to enhance the quality
               of our products and enhance our customer service.

          o    Provide Superior Customer Service. We plan to enhance our
               commitment to customer satisfaction by transforming Caminus into
               a customer-driven organization. We plan to achieve this by
               strengthening our product management capabilities, measuring
               business unit manager performance on customer satisfaction,
               establishing an executive-led customer satisfaction program, and
               developing a standard, company-wide reporting system for tracking
               and enhancing customer service.

          o    Grow Through Targeted Acquisitions. We intend to carefully
               analyze companies and products that may help to enhance our
               product leadership and solution offering. Based on a number of
               rigorous criteria, we will target companies for acquisition that
               we believe enhances our product offerings and provides additional
               benefit to our current and future customers.

Software Solutions

          We provide energy market participants with sophisticated software to
compete in every segment of the competitive wholesale markets. Since our
inception, we have been exclusively focused on providing software solutions and
strategic consulting services to the wholesale energy markets. We have developed
highly sophisticated risk management software by combining an intimate knowledge
of the energy sector with a large, highly skilled staff of quantitative PhDs.
Our software solutions enhance our customers' efficiency, risk management, and
profitability across the wholesale energy value chain, from production and
decision analysis through distribution and settlement. Specifically, our
software solution groups include:

          o    trading and transaction management solutions;

          o    energy risk management solutions;

          o    advanced analytics solutions;

          o    physical gas solutions; and

          o    physical power solutions.

   Trading and Transaction Management Solutions


                                       8



<PAGE>

          Overview and Benefits. Our trading and transaction management
solutions suite enables energy market participants to efficiently control all
elements of a transaction, including trading, risk, credit, back office, and
accounting, on a single platform, in real time. The suite allows users to manage
multiple physical commodities and financial instruments. Specifically, the
system handles power, gas, oil, coal, emissions, and weather-related
transactions as well as multiple traded instruments, ranging from simple spot
deals to complex options and swaps.

          Target Market. The suite is designed specifically to meet the
requirements of wholesale energy trading and marketing companies, utilities,
generating companies, power pools, oil and gas producers, processors, and
pipelines. Its integrated front-, mid-, and back office functionality, modular
design, and sophisticated user interface enables customers to evaluate
portfolios, execute trades, manage risks, and schedule and account for
transactions on a single system.

          Key Features. The suite's key features include:

          o    real-time physical and financial trade capture;

          o    multi-commodity trading and scheduling functionality;

          o    real-time management of trading risks across trading portfolios;

          o    intelligent real-time portfolio valuation and "what if" scenario
               functionality;

          o    support for both wholesale and retail operations, consolidated at
               the corporate level; and

          o    ability to generate enterprise wide and customized reports in
               real time.

   Energy Risk Management Solutions

          Overview and Benefits. Our energy risk management solutions suite
provides an array of proprietary and standard risk management solutions that can
be tailored to meet the needs of energy market participants that have varying
market strategies, exposure levels, and risk tolerances. Users can measure,
calculate and analyze the wide range of risks faced by them, including price
risk, basis risk, interest rate risk, volatility risk, correlation risk, and
cash flow risk. Built on an integrated platform, the suite allows users to
perform integrated risk management across a wide spectrum of commodities, traded
instruments, markets and geographies.

          Target Market. The suite is useful to any entity that buys, sells, or
takes a position in energy. Within these entities, our software directly
benefits traders, risk managers, credit officers, structured product
specialists, and senior managers.

          Key Features. The suite's key features include:

          o    standard mark-to-market and Value-at-Risk calculations;

          o    proprietary Monte Carlo Value-at-Risk models;

          o    real-time, seamless integration of proprietary valuation models
               developed by customers;

          o    exotic option pricing and analysis tools;

          o    standard and complex portfolio simulations and stress-testing;
               and

          o    standard and customizable reports covering, among other things,
               profits and losses, portfolio valuation, audit and potential
               exposure.


                                       9



<PAGE>

   Advanced Analytics Solutions

          Overview and Benefits. Our advanced analytics solutions suite provides
customers with a comprehensive energy-specific suite of high-end analytics and
decision support software. Included in the suite are a number of sophisticated
tools that help energy market participants value, hedge, optimize and operate
their physical assets and contracts as well as manage their broad range of
energy exposure. As part of our advanced analytics solutions, we have developed
the industry's first software application for assessing the impact of weather
variations and volumetric risk on energy load, generation assets, retail
contracts, and traded positions.

          Target Market. The suite is useful to energy market participants that
own or operate physical assets, buy or supply energy, or face exposure to energy
price fluctuations. Examples of such participants include power generation
companies, oil and gas producers, energy trading and marketing companies, and
gas storage owners.

          Key Features. The suite's key features include:

          o    highly accurate trinomial tree models;

          o    use of empirical analysis of energy assets and data to generate
               more accurate valuations and enhance quality of asset management
               decisions;

          o    complex risk applications that assess the impact of weather and
               volumetric variations on energy demand and traded positions;

          o    for gas storage asset owners, valuation of gas storage facilities
               as well as the associated real options linked to these assets;
               and

          o    for generation asset owners, valuation of generation assets and
               associated real options based on actual physical constraints.

   Physical Gas Solutions

          Overview and Benefits. Our physical gas solutions suite enables
customers to efficiently integrate and manage their gas operations, including
purchases and sales, transportation, settlement, invoicing, and accounting. The
suite manages all aspects of physical gas life cycle from production to end use,
with the scalability to manage transaction volumes of the largest players in the
industry and the depth of functionality to manage the complexity of region- and
pipeline-specific operations. The benefits of streamlining the gas management
process include the ability to handle increased throughput, reduce operational
risk, increase cash flow, and enhance enterprise-wide transaction transparency
and reporting functionality.

          Target Market. The suite targets companies that buy, sell, trade,
transport, or distribute gas. These entities include gas producers, gatherers,
processors, traders, marketers, pipelines, and local distribution companies.

          Key Features. The suite's key features include:

          o    wellhead accounting and division of interest functionality for
               gas producers;

          o    comprehensive contract administration;

          o    built-in interfaces between marketers and third-party pipeline
               operators;

          o    integrated operations features, including gas trading,
               nominations and scheduling;


                                       10



<PAGE>

          o    comprehensive gas accounting, invoicing and settlement
               functionality;

          o    integrated monitoring of transportation and storage contracts;
               and

          o    complete and continuously updated compliance with energy
               regulatory standards.

   Physical Power Solutions

          Overview and Benefits. Our physical power solutions suite facilitates
the process of buying and selling, scheduling, monitoring, and recording
electricity transactions among market participants. Our software facilitates the
process of physical power management, including managing purchase and sales
contracts, settlement calculations, real-time generation dispatch, curtailment
management, billing, and invoicing. Among the benefits of this solution suite
are increased efficiency of the power scheduling process, a reduction in the
operational risk of managing physical power assets, and increased profit
opportunities through a real-time, integrated view of capacity available for
purchase or sale.

          Target Market. The suite benefits entities that manage schedules for
buying, selling, or transmitting power, including merchant power producers,
marketers, utilities, municipalities, power cooperatives, and public agencies.

          Key Features. The suite's key features include:

          o    ability to create hourly and to-the-minute power schedules;

          o    automatic export of data to market operators via interfaces to
               all Independent System Operators;

          o    automatic generation and exchange of tagging information required
               by the North America Energy Reliability Council, or NERC, for
               both tag agents, or marketers, and tag authorities, or utilities;

          o    accurate modeling of all physical generation parameters, such as
               heat curves and ramp rates, for precise scheduling and
               settlement; and

          o    capability to manage meter data for invoicing and billing.

   Leading Brands

          Our software solution suites are marketed and sold under
industry-leading brand names, including ZaiNet, Nucleus, Caminus Gas, Caminus
Pipeline, Caminus Webexchange, Aces, FrontOffice, Caminus Analytics,
GenPortfolio, GasStorage, and WeatherDelta. We believe that these brands have
strong name recognition in the wholesale energy markets in which we compete.

   Product Pricing

          We license our software for a one-time perpetual license fee, which
typically consists of a base fee plus charges for optional modules and system
users. The one-time perpetual license fee for base packages can range from
$200,000 to $400,000 for a system with basic functionality, the ability to
manage only across a single commodity, and a small number of users. Incremental
modules for enhanced functionality, additional commodities, specialized
features, and specific market interfaces are priced from approximately $10,000
to over $200,000. Depending on the number of users and modules licensed, our
initial system license fees typically range from $500,000 to $1 million.

          Substantially all of our customers enter into an annual maintenance
agreement providing them with regularly published software upgrades and
post-implementation customer support. Customers pay an annual maintenance fee
that is typically equal to 20% of the license fee.


                                       11



<PAGE>

Software Services

          We offer a broad range of professional services to assist our
customers in implementing our software products. Our software is configured,
implemented, and integrated to meet each customer's trading, risk management,
scheduling, and operations needs. Our philosophy is to focus on the needs of
each customer and to tailor our services accordingly. Our consultants provide
comprehensive training, support, and advice on the effective application of our
software to each customer's business operations. The types of services we offer
include:

          o    Implementation Consulting. Assisting customers with the initial
               installation of our software or newly licensed modules,
               conversion of their historical data into system databases, and
               configuring the operational parameters of systems to match their
               business practices.

          o    Application Consulting. Advising and training our customers on
               best practices to help them maximize the benefits provided by our
               software. We offer detailed process documentation and training
               customized for each customer's business practices.

          o    Post-implementation Customer Support. Answering customer
               questions and resolving problems concerning both standard
               software functionality and customer-specific issues through
               remote diagnosis, telephone hotline support, and site visits.

          These services and the professionals that deliver them contribute to a
strong relationship with our customers, enabling us to assess their future
requirements and to sell them additional products and services.

Sales

          We sell our products and services exclusively through a direct sales
channel. We have a sales organization in both North America and Europe
responsible for selling our entire suite of products and services in these
respective regions. Both regions utilize a common sales methodology and process
for managing our sales pipeline. Global sales efforts are tightly coordinated.
Each sales organization is led by a highly experienced sales management
executive with a strong background in building and leading large enterprise
software sales teams.

          We use a team sales approach in which professional, commissioned
account representatives work with pre-sales product and service consultants who
have deep subject matter expertise in the prospect's requirements and the
solutions required to address them. Account representatives generate and qualify
leads, manage the sales process and are responsible for closing the sale.
Pre-sales consultants analyze requirements, recommend solutions, provide
technical information and demonstrate our software solutions. Subject matter
experts from product development supplement the sales team as the sales
situation dictates. In addition, our software consultants work closely with our
sales teams to identify additional sales opportunities with existing customers.

Marketing

          We have devoted significant resources and effort towards building a
strong and effective marketing team with the primary objectives of generating
sales leads and ensuring that the capabilities of our products and services are
accurately represented to our target markets. Our marketing efforts in North
America and Europe are largely focused on the following initiatives:

          o    proactively generating sales leads based on rigorous customer
               profiling and needs assessments;

          o    shaping and articulating our products' value propositions with
               respect to our specific software solution suites and consulting
               services through targeted advertising, speaking engagements,
               industry forums and communications with industry analysts and
               consultants; and


                                       12



<PAGE>

          o    further developing our intricate understanding of market,
               regulatory, and customer trends and providing this valuable
               feedback to our sales and product development teams for further
               leverage.

          We also have informal alliances and working relationships with most
leading systems integrators and major technology consulting firms. These
companies frequently work with our customers in the vendor selection process as
well as the enterprise-wide integration projects that may involve our software.

Research and Development

          Strong development capabilities are essential to delivering responsive
products to rapidly changing markets, continually improving the quality and
functionality of our current products, and enhancing our core technology. We
believe that we can best maximize our development capabilities through small,
entrepreneurial development teams focused on specific product groups. Our teams
operate under a structure that provides an "umbrella" of common strategy, plans,
technology, standards, methodologies, processes and culture. Each development
team consists of product managers, programmers, and documentation and quality
assurance specialists. Overall development management consists of the leaders of
each development team, led by our senior development executive. The team leaders
ensure that the development teams operate under a common approach and work
closely with product marketing to ensure that we develop products that the
market demands. They also manage the integration between products and coordinate
overall product suite quality assurance.

          A number of significant product development efforts are under way for
2003. These include the development of a new suite of asset-based trading tools,
including new developments in option modeling of generation assets. We believe
that these tools will find demand on the trading floors of generation operators
who need to integrate trading and hedging decisions with production scheduling.
We are also committed to maintaining the leadership of existing products by
developing product enhancements that preserve our competitive edge.

Technology

          The strength of our technology is a competitive advantage. Our
software products are integrated across the energy value chain, and they have
been designed to easily integrate with other enterprise software systems that
are commonly found in the back offices of energy companies. To facilitate
integration with a variety of architectures, our solution suites provide
standard interfaces to accept trades and prices from other systems and sources.
These interfaces are XML and messaging based, although we also support other
technologies to accommodate legacy systems. Our products have been integrated
with the majority of third-party software products specific to the energy
industry for trading, physical scheduling, and transportation. The integrated
result is a suite of object-oriented, high-performance systems that will run on
a variety of servers and databases.

          We have developed a next generation software platform in order to
maintain our technology leadership in competitive energy markets over the long
term. We believe that this platform is the wholesale energy industry's first
fully integrated suite of web-based, end-to-end transaction processing
management software, and will serve as the platform for all of our future
products. Our next generation software is built on Java 2 Platform, Enterprise
Edition, or J2EE, -based, messaging-oriented technology infrastructure. Its
fully web-based user interface, modular design, and N-tiered architecture
provides end-users with complete integration of transactions and business
processes across the wholesale energy value chain. We will employ a conservative
approach to migrating our current customers, and introducing new customers, to
the new platform as it is released in stages. We plan to sell and support our
existing products for the foreseeable future.

Customers

          We have approximately 250 customers worldwide. These companies include
many of North America's leading power and gas marketers, as well as leading
electric utilities, oil and gas producers, merchant power producers, pipelines,
and distribution companies throughout North America and Europe. In addition to
serving these major industry participants, we have successfully acquired
customers in new or niche segments of the competitive energy industry, including
power agencies,


                                       13



<PAGE>

transmission companies, energy services providers, municipalities, storage
operators, and financial institutions. We believe that the diversity of our
customer base demonstrates the strength and breadth of our software solutions
and the comprehensiveness of our value proposition across energy commodities,
business functions, and traded instruments.

          We believe that we are well-positioned to significantly grow our sales
to both existing and new customers. We believe that most of our existing
customers will require additional software solutions to handle the increasing
operational challenges as well as the new sources of energy risk they
continually face. Given the strength and breadth of our software solution suite
and the frequency of our new product innovation, we have the opportunity to
cross-sell products into our existing base as our customers face new challenges.
Our direct sales force is therefore trained on all of our product suites and is
focused on cross-selling our products to existing customers. In addition, we
believe that most wholesale energy market participants, including the more than
4,000 participants in the United States alone, have a need for advanced and
powerful solutions to their trading, transaction processing, and risk management
activities.

          We currently have approximately 250 customers located primarily in the
United States, United Kingdom, Italy, Spain, Denmark, and France, including:

<TABLE>
<S>                                            <C>
Ameren Energy, Inc.                            Gaz de France
American Electric Power Service Corporation    Hess Energy Trading
BP Amoco Corporation                           Louis Dreyfus Energy
British Energy Plc                             MidAmerican Energy Company
Calpine Corporation                            New York State Electric & Gas Corporation
Connectiv Resource Partners, Inc.              The Office of Gas and Electricity Markets
Conoco Inc.                                    Oneok Inc.
Consolidated Edison Company of New York, Inc.  PG&E National Energy Group
Dominion Resources, Inc.                       PP&L Resources, Inc.
Elsam                                          Royal Dutch/Shell Group
Emera                                          RWE Trading Americas Inc.
Endesa Servicios                               Sequent Energy Management, L.P.
ENI S.p.A.                                     Southern California Edison
Exelon Generation                              Tractebel Energy Marketing, Inc.
</TABLE>

          Information regarding domestic and foreign revenues is set forth in
our consolidated financial statements at Note 17 and Item 7A and is incorporated
herein by reference.

Competition

          The wholesale energy software market is relatively young, rapidly
evolving, and very competitive. We expect competition to persist and to
intensify as demand for our products and services continues to grow. We
currently face competition from a number of sources:

          o    Energy Software Providers. A number of smaller companies offer
               point solutions targeted specifically to the energy industry.
               These include pure-play startup energy software companies and
               hybrid software and technology consulting firms. We compete
               favorably against these participants as a result of our customer
               base, track record, global presence, and level of subject matter
               expertise and ongoing support that our customers demand.

          o    In-House Development. These in-house information technology
               departments provide custom home-built software tailored
               specifically to the parent corporation's needs. Initially, this
               option may appear to be a cost-effective approach to providing
               point or enterprise solutions. However, the growing cost of
               maintaining, supporting, and upgrading these custom solutions is
               an issue for some customers. Moreover, although in-house
               technology teams may be technically very capable, we compete
               favorably against them because we can provide our perspective of
               the best practices in the energy industry.


                                       14



<PAGE>

          o    Large Consultancies. These large systems integrators and
               consultancies build custom enterprise solutions. Like the global
               enterprise software companies, they frequently have a strong
               international presence and significant financial resources. They
               often rely on cross-industry technology solutions, which may
               result in expensive and lengthy implementations. We compete
               favorably against them because, instead of relying on
               cross-industry technology solutions, we provide the domain
               specific functionality that our customers demand.

          o    Enterprise Software Companies. These larger companies have the
               international presence and financial strength to deliver
               large-scale enterprise software solutions. We compete favorably
               against them because we have the detailed subject matter
               expertise required to deliver sophisticated energy trading,
               transaction processing, and risk management solutions, although
               they have the resources to acquire and develop this expertise
               over time.

          We believe that we compete primarily on the basis of functionality,
expertise, the ability to support larger enterprises, and price. Our ability to
compete successfully depends on elements both within and outside of our control,
including successful and timely development of new products, product
performance, intellectual property protection obtained by us and our
competitors, customer service, pricing, marketing, industry trends, and general
economic trends.

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, nondisclosure 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 that we can obtain replacements from other vendors.

Employees

          As of December 31, 2002, we had 392 full-time employees. We believe
that our relationship with our employees is good.

Available Information

          The Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and amendments to those reports are available
as soon as reasonably practicable after they are filed or furnished to the
Securities and Exchange Commission, through our internet website,
www.caminus.com.

Item 2. Properties

          Our principal administrative, sales, marketing, services and research
and development facility is located in leased facilities in New York, New York.
In addition, we lease sales, services and research and development offices in
the following cities: Houston, Texas; London, England; and Kirkland, Washington.
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.


                                       15



<PAGE>

Item 3. Legal Proceedings

          From time to time, we are involved in routine legal matters that arise
in the ordinary course of our business. We currently are not a party to any
matters that we believe will have, individually or in the aggregate, a material
adverse effect on our business, financial condition, or results of operations.

          On March 13, 2003 a complaint was filed in the U.S. District Court for
the Southern District of New York by Dennis Fasano, individually and on behalf
of others similarly situated, naming the Company, former executive officer David
Stoner, and current executive officers Joseph P. Dwyer and John A. Andrus as
defendants. On March 14, 2003, the Law Offices of Brian M. Felgoise, P.C. and
the Law Offices of Charles J. Piven, P.A. issued press releases appearing to
announce the filing of similar complaints in the U.S. District Court for the
Southern District of New York. The complaints allege that defendants violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and
Rule 10b-5 promulgated thereunder, by making material misrepresentations and
omissions in their public disclosures between February 12, 2002 and
July 8, 2002, thereby artificially inflating the price of the Company's
common stock. The complaints seek compensatory damages and other relief.
The Company believes the complaints are without merit and intends to defend
them vigorously. However, there can be no assurance that the pending litigation,
or any future similar litigation, will not have a material adverse effect on
the Company, whether due to the expense of defending the litigation, any
adverse judgment in the litigation, the devotion of management time and
resources to defending the litigation, and/or other similar factors.

Item 4. Submission of Matters to a Vote of Security Holders

          None.

Executive Officers of the Registrant

          Our executive officers, and their respective ages and positions as of
March 31, 2003, are as follows:

<TABLE>
<CAPTION>
      Name               Age                      Position
      ----               ---                      --------
<S>                      <C>   <C>
William P. Lyons......   58    President, Chief Executive Officer and Director
Joseph P. Dwyer.......   47    Executive Vice President, Chief Financial Officer,
                               Secretary and Treasurer
John A. Andrus........   48    Executive Vice President and Chief Operating Officer
</TABLE>

          William P. Lyons has served as president, chief executive officer, and
a director of the Company since July 2002. From January 2001 to July 2002 Mr.
Lyons served as president and chief executive officer of NeuVis Software Inc.,
an enterprise software company focused on selling Rapid Applications Development
platforms to leading global companies. From February 1998 to January 2001, he
served as president and chief executive officer of Finjan Software, Inc., an
Israeli-based internet security company. From April 1992 to July 1997, Mr. Lyons
served as president and chief executive officer of ParcPlace-Digitalk, Inc., the
largest object-oriented software company at that time. From October 1988 to
November 1991, Mr. Lyons served in a number of positions at Ashton-Tate
Corporation, a PC database provider, ultimately becoming its chairman and chief
executive officer. During his tenure at IBM from 1969 to 1988, he served in
numerous sales and marketing positions, as well as in the office of the
chairman, and rose to lead product management and marketing for all of IBM's PC
hardware and software products. Mr. Lyons also is a director of FileNET
Corporation.


                                       16



<PAGE>

          Joseph P. Dwyer has served as the Company's executive vice president
and chief financial officer since July 2001. He has served as the Company's
assistant secretary and treasurer since April 2001. From April 2001 to July
2001, Mr. Dwyer served as the Company's senior vice president and chief
financial officer. From June 2000 to April 2001, Mr. Dwyer served as executive
vice president and chief financial officer of ACTV, Inc., a digital media
company. From January 1990 to June 2000, he served as senior vice president,
finance, of Winstar Communications, Inc., a global broadband services company,
and, from January 1988 to January 1990, he was chief financial officer of Legal
Software Solutions, a software development firm.

          John A. Andrus has served as the Company's executive vice president
and chief operating officer since December 2001. From January 2001 to December
2001, Mr. Andrus served as the Company's executive vice president, North
American operations, and, from April 1999 to January 2001, he served as the
Company's senior vice president, North American sales. From April 1997 to March
1999, Mr. Andrus served as vice president, sales and marketing at JGI, a
privately held provider of enterprise software and supply chain solutions. From
November 1992 to April 1997, Mr. Andrus served in various roles, including vice
president, North American sales and operations, at Marcam Corporation, an
international provider of enterprise applications and services.

          Each executive officer serves at the discretion of our board of
directors and holds office until his or her successor is elected and qualified
or until his or her earlier resignation or removal. There are no family
relationships among any of our directors or executive officers.

                                    Part II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

          Our common stock has been traded on the Nasdaq National Market under
the symbol "CAMZ" since our initial public offering on January 28, 2000. The
following table sets forth the high and low sales prices of our common stock as
reported on the Nasdaq National Market for the periods indicated.

<TABLE>
<CAPTION>
                                                                  High     Low
                                                                 ------   ------
<S>                                                              <C>      <C>
Fiscal Year Ended December 31, 2001:
First Quarter.................................................   $28.00   $17.50
Second Quarter................................................    33.75    18.88
Third Quarter.................................................    27.79    11.50
Fourth Quarter................................................    24.40    14.37
</TABLE>

<TABLE>
<CAPTION>
                                                                  High     Low
                                                                 ------   ------
<S>                                                              <C>      <C>
Fiscal Year Ended December 31, 2002:
First Quarter.................................................   $24.60   $18.37
Second Quarter................................................    22.70     5.10
Third Quarter.................................................     6.00     1.75
Fourth Quarter................................................     3.52     1.60
</TABLE>

          On March 31, 2003, the last reported sale price of our common stock on
the Nasdaq National Market was $8.89 per share. As of the close of business on
December 31, 2002, we had 28 holders of record of our common stock. Because a
significant number of these shares are held by brokers and other institutions on
behalf of stockholders, we are unable to estimate the total number of
stockholders represented by these holders of record.

          We have never declared or paid cash dividends on our capital stock.
Because we currently intend to retain earnings, if any, to finance our
operations, we do not intend to pay cash dividends on our common stock in the
foreseeable future. Payment of


                                       17



<PAGE>

future dividends, if any, will be at the discretion of our board of directors
and will depend on our earnings and financial condition and such other factors
as our board of directors may consider appropriate at the time.

Item 6. Selected Financial Data

          The following selected consolidated financial data should be read
together with our audited 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 annual report. The statement
of operations data for the four-month period ended April 30, 1998 is derived
from, and is qualified by reference to, the audited financial statements of
Zai*Net Software, Inc., our predecessor, not included in this annual report. The
consolidated statement of operations data for the period from our inception on
April 29, 1998 through December 31, 1998 and the year ended December 31, 1999
and the consolidated balance sheet data at December 31, 1998 and 1999 are
derived from, and are qualified by reference to, our audited consolidated
financial statements, not included in this annual report. The consolidated
statement of operations data for the years ended December 31, 2000, 2001 and
2002 and the consolidated balance sheet data at December 31, 2001 and 2002 are
derived from, and qualified by reference to, our audited consolidated financial
statements, included elsewhere in this annual report, which have been audited by
KPMG LLP, independent accountants. The independent auditors' report refers to a
change in accounting regarding the adoption of statement No. 142, "Goodwill and
Other Intangible Assets".

<TABLE>
<CAPTION>
                                            Zai*Net
                                          Predecessor   Inception
                                          -----------   (April 29,                  Caminus
                                          Four Months     1998)      ---------------------------------------
                                             Ended       through               Fiscal Year Ended Dec 31,
                                           April 30,     Dec. 31,    ---------------------------------------
                                              1998        1998        1999       2000      2001       2002
                                          -----------   ----------   -------   --------   -------   --------
<S>                                          <C>         <C>         <C>       <C>        <C>       <C>
Statement of Operations Data:
   Revenues:
Licenses...............................      $1,495      $  3,639    $12,538   $ 24,573   $34,579   $ 29,714
Software services......................       1,335         3,091      7,816     18,576    32,416     51,620
Strategic consulting...................          --         2,896      6,556      8,565     7,722      1,919
                                             ------      --------    -------   --------   -------   --------
      Total revenues...................       2,830         9,626     26,910     51,714    74,717     83,253
Gross profit...........................       2,095         4.941     17,466     34,829    49,522     50,831
Operating expenses.....................       1,659        15,074     25,202     50,288    54,341     69,227
                                             ------      --------    -------   --------   -------   --------
Operating income (loss)................         436       (10,133)    (7,736)   (15,459)   (4,819)   (18,396)
Other income (expense), net............           8            97       (228)     2,258     2,629        613
Provision for income taxes.............          24            36        646      2,315     3,989     (1,813)
Minority interest......................          --          (299)        --         --        --         --
                                             ------      --------    -------   --------   -------   --------
Net income (loss)......................      $  420      $(10,371)   $(8,610)  $(15,516)  $(6,179)  $(15,970)
                                             ------      --------    -------   --------   -------   --------
Basic and diluted net loss per share...                  $  (1.41)   $ (1.01)  $  (1.04)  $ (0.38)  $  (0.88)
                                                         ========    =======   ========   =======   ========
Weighted average shares--basic
   and diluted.........................                     7,361      8,514     14,925    16,059     18,087
</TABLE>


                                       18



<PAGE>

<TABLE>
<CAPTION>

                                            Zai*Net
                                          Predecessor    Inception
                                          -----------   (April 29,                  Caminus
                                          Four Months     1998)      ----------------------------------------
                                             Ended       through                Fiscal Year Ended Dec 31,
                                           April 30,     Dec. 31,    -----------------------------------------
                                              1998        1998         1999       2000       2001       2002
                                          -----------   ----------   --------   --------   --------   --------
                                                                (in thousands)
<S>                                          <C>         <C>         <C>        <C>        <C>        <C>
Other Financial Data:
Cash provided by (used in)
   operating activities................      $1,054      $    952    $ (1,922)  $  4,095   $ 12,658   $ (3,972)
Cash used in investing activities......        (100)      (10,893)    (11,128)   (44,795)   (10,685)   (21,037)
Cash provided by (used in)
   financing activities................          (3)       12,700      10,953     57,145     16,942      7,064
</TABLE>

<TABLE>
<CAPTION>
                                              1998      1999       2000       2001       2002
                                             -------   -------   --------   --------   --------
<S>                                          <C>       <C>       <C>        <C>        <C>
Balance Sheet Data:                                        (in thousands)
Cash, cash equivalents and investments....   $ 2,771   $   662   $ 41,664   $ 42,027   $ 41,133
Working capital (deficiency)..............    (4,651)   (4,766)    33,614     32,016     25,423
Total assets..............................    31,069    41,478    104,045    166,979    145,231
Borrowings under credit facility..........        --     3,050         --     15,000         --
Stockholders' equity......................    17,160    25,739     87,791    117,605    121,196
</TABLE>

Item 7. 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 Financial
Data" and our audited consolidated financial statements and related notes
appearing elsewhere in this annual report. 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 a number of factors, including but not
limited to those set forth under "Certain Factors That May Affect Our Business"
and elsewhere in this annual report.

Recent Developments

          On January 20, 2003, the Company entered into an agreement for the
acquisition by SunGard Data Systems Inc. ("SunGard") of all the shares of the
Company for $9.00 per share in cash. Pursuant to the agreement, a wholly owned
subsidiary of SunGard commenced a cash tender offer to acquire all of the
Company's outstanding shares at a price of $9.00 per share. The tender offer is
pending. Following successful completion of the tender offer, any remaining
shares of the Company will be cancelled and converted into the right to receive
the same price in a cash merger. The consummation of the transaction is subject
to customary conditions, including the tender of at least a majority of the
outstanding shares of the Company in the tender offer.

Overview

          We are a leading provider of software and software services that
facilitate energy trading, transaction processing, risk management, and decision
support within the North American and European wholesale energy markets. We were
organized as a limited liability company in April 1998, and acquired Zai*Net
Software, L.P. and Caminus Limited in May 1998, Positron Energy Consulting in
November 1998, DC Systems, Inc. in July 1999, Nucleus Corporation and Nucleus
Energy Consulting


                                       19



<PAGE>

Corporation (collectively, "Nucleus") in August 2000, and Altra Software
Services, Inc. ("Altra") in November 2001. In February 2000, we closed the
initial public offering of 4.1 million shares of our common stock, realizing net
proceeds from the offering of approximately $59.0 million. In March 2002, we
closed a secondary offering of 1.6 million shares of our common stock, realizing
net proceeds of approximately $29.0 million.

          We generate revenues from licensing our software products, reselling
our products through distributors and providing related implementation services.
We generally license one or more products to our end user 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 typically purchase professional services from us, including
implementation and training services, and enter into renewable maintenance
contracts that provide for software upgrades and technical support over a stated
term, typically twelve months.

          Customer payments under our software license agreements are
non-refundable. Payment terms generally require that a significant portion of
the license fee is payable on contract signing or delivery of the licensed
product with the balance due in installments.

          Our critical accounting policies are those that relate to revenue
recognition and software development costs.

          The Company follows the provisions of Statement of Position ("SOP")
No. 97-2, "Software Revenue Recognition," as amended by SOP 98-9,
"Modification of SOP 97-2, Software Revenue Recognition, with Respect to
Certain Transactions." Under SOP No. 97-2, if the license agreement does not
provide for significant customization of or enhancements to the software,
software license revenues are recognized when a license agreement is executed,
the product has been delivered, all significant obligations are fulfilled, the
fee is fixed or determinable and collectibility is probable. For those license
agreements where customer acceptance is required and it is not probable,
license revenues are recognized when the software has been accepted. For those
license agreements where the licensee requires significant enhancements or
customization to adapt the software to the unique specifications of the
customer or the service elements of the arrangement are considered essential
to the functionality of the software products, both the license revenues and
services revenues are recognized using contract accounting. If acceptance of
the software and related software services is probable, the percentage of
completion method is used to recognize revenue for those types of license
agreements, where progress towards completion is measured by comparing
software services hours incurred to estimated total hours for each software
license agreement. If acceptance of the software and related software services
is not probable, then the completed contract method is used and license revenues
are recognized only when the Company's obligations under the license agreement
are completed and the software has been accepted. Accordingly, for these
contracts, payments received and software license costs are deferred until the
Company's obligations under the license agreement are completed. Anticipated
losses, if any, on uncompleted contracts are recognized in the period in which
such losses are determined. For non-exclusive software licenses with
distributors to resell the Company's software in exchange for royalty payments
based on the number of software products resold, the Company recognizes
nonrefundable software license fees as revenue when the software product master
is delivered and accepted and the cash is received from the reseller, assuming
all other revenue recognition criteria are met. Subsequent royalty revenue
related to the resale of the software is recognized as earned. Maintenance and
support revenues associated with new product licenses and renewals are deferred
and recognized ratably over the contract period. Software services revenues,
not required to be recognized using contract accounting, and strategic
consulting revenues are typically billed on a time and materials basis and
are recognized as such services are performed. When software licenses,
services and/or maintenance are bundled in one arrangement, the fair value of
the maintenance fees is determined by the contractual renewal rate and the
fair value of the services is based upon the amount the Company invoices
customers for such services when they are sold on a stand alone basis.

         Software development costs are expensed as incurred, except that
capitalization of software development costs begins upon establishment of
technological feasibility of the product. After technological feasibility is
established, significant software development costs are capitalized until the
product is available for general release. The capitalized software development
costs are then amortized on a straight-line basis over the estimated product
life, which is primarily four years, or on the ratio of current revenues to
total projected product revenues, whichever is greater. Through 2001, 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 had been short,
and software development costs qualifying for capitalization were
insignificant. Accordingly, the Company did not capitalize any software
development costs through December 31, 2001. At the end of 2001, the Company
acquired Altra Software Services, Inc, which was involved in major software
development efforts to create a new platform for


                                       20



<PAGE>

its software products and to create its next generation gas marketing product.
During the six months ended June 30, 2002, the Company continued the development
of this platform, on which the Company expects most of its future products would
reside, and continued the development of its next generation gas marketing
product. Certain elements of these efforts met the criteria for the
capitalization of software development costs, and accordingly $1,9 million of
these costs was capitalized during the first six months of 2002. As the related
products were available for general release as of June 30, 2002, no additional
costs were capitalized in the second half of 2002. The related amortization of
these capitalized software development costs for the years ended December 31,
2002, 2001 and 2000 was $0.2 million, 0 and 0, respectively, and is included in
cost of licenses revenues.

          We currently derive substantially all of our revenues from licensing
our software and providing consulting services to participants in the energy
industry. The success of our business is dependant on the success of our
energy-based customers, which is linked to the energy industry itself. Moreover,
because of the capital expenditures required in connection with investing in our
software and services, we believe that demand for our software and services
could be affected by fluctuations, disruptions, instability or downturns in the
energy market, which may cause current and potential customers to leave the
energy industry or delay, cancel or reduce any planned expenditures for our
software solutions and consulting services. In addition, tighter IT spending
budgets and the requirement for higher or multiple level contract approvals by
our customers may affect our revenues.

          Revenues from customers outside the United States represented 41%, 35%
and 20% of our total revenues for the years ended December 31, 2000, 2001 and
2002, respectively. A significant portion of our international revenues has
historically been derived from sales of our strategic consulting services and
software products in the United Kingdom. In the third quarter of 2002, the
Company ceased to operate its strategic consulting business for energy market
participants. The Company will continue to perform consulting services under a
few strategic consulting contracts for regulatory agencies. We intend to expand
our international operations and commit management time and financial resources
to developing our direct international sales channels. International revenues
may not, however, increase as a percentage of total revenues.

          Due to our acquisition of Nucleus and Altra, along with the
significant changes in our operations, the fluctuation of financial results,
including financial data expressed as a percentage of revenues for all periods,
does not necessarily provide a meaningful understanding of the expected future
results of our operations. The results of operations of Nucleus and Altra are
included in our consolidated results of operations beginning August 2000 and
December 2001, respectively.

Results of Operations

          The following table sets forth, except for cost of licenses, cost of
software services, and cost of strategic consulting, which are expressed as a
percentage of their related revenues, and amortization of acquired technology,
which is expressed as a percentage of license revenues, the consolidated
financial information expressed as a percentage of revenues for the years ended
December 31, 2000, 2001 and 2002. The consolidated financial information for the
periods presented are derived from the audited consolidated financial statements
included elsewhere in this annual report.


                                       21



<PAGE>

<TABLE>
<CAPTION>
                                                                Year Ended
                                                               December 31,
                                                          ---------------------
                                                           2000    2001    2002
                                                          -----   -----   -----
<S>                                                        <C>     <C>     <C>
Revenues:
   Licenses ...........................................     48%     46%     36%
   Software services ..................................     36      44      62
   Strategic consulting ...............................     16      10       2
                                                           ---     ---     ---
      Total revenues ..................................    100     100     100
Cost of revenues:
   Cost of licenses ...................................      4       3       3
   Cost of software services ..........................     58      50      42
   Cost of strategic consulting .......................     43      55      99
   Amortization of acquired technology ................      6      10      27
                                                           ---     ---     ---
      Gross profit ....................................     67      66      61
Operating expenses:
   Sales and marketing ................................     19      15      12
   Research and development ...........................     13      18      32
   General and administrative .........................     21      23      33
   Restructuring charges ..............................     --      --       4
   Acquired in-process research and development .......     --       2      --
   Amortization of intangible assets ..................     19      15       2
   Expenses related to our initial public offering ....     24      --      --
   Loss on office relocation ..........................      1      --      --
                                                           ---     ---     ---
      Total operating expenses ........................     97      73      83
Loss from operations ..................................    (30)     (7)    (22)
Other income (expense), net ...........................      4       4       1
Provision for income taxes ............................      4       5      (2)
                                                           ---     ---     ---
Net loss ..............................................    (30)%    (8)%   (19)%
                                                           ===     ===     ===
</TABLE>

Comparison of the Year Ended December 31, 2001 to the Year Ended December 31,
2002

   Revenues

          Licenses: License revenues represented 36% and 46% of the total
revenues for 2002 and 2001, respectively, and decreased $4.9 million, or 14%,
from $34.6 million in 2001 to $29.7 million in 2002. This decrease was primarily
attributable to softer demand for our software in 2002 resulting from widely
publicized adverse conditions in the energy markets and general softness in IT
spending.

          Software services: Software services revenues represented 62% and 44%
of the total revenues for 2002 and 2001, respectively, and increased by $19.2
million, or 59%, from $32.4 million in 2001 to $51.6 million in 2002. This
increase was primarily attributable to the growth in our installed customer base
with maintenance contracts and an increase in the number of implementations
partially attributable to our acquisition of Altra.

          Strategic consulting: Strategic consulting revenues represented 2% and
10% of the total revenues for 2002 and 2001, respectively, and decreased $5.8
million, or 75%, from $7.7 million in 2001 to $1.9 million in 2002. This
decrease was primarily attributable to our ceasing to operate separate strategic
consulting businesses in North America and Europe in the third quarter of 2002,
and the absence in the first half of 2002 of a comparable revenue stream to
replace the successful New Electricity Trading Arrangements ("NETA") consulting
engagement in Europe, which was completed on March 29, 2001. The Company will
continue to perform consulting services under a few strategic consulting
contracts for regulatory agencies.


                                       22



<PAGE>

Such consulting services, which were $0.7 million in the third and fourth
quarters of 2002 are reported as software services revenue beginning in the
third quarter of 2002.

   Cost of Revenues

          Cost of licenses: Cost of licenses primarily consists of the software
license costs associated with third-party software that is integrated into our
products, and the amortization of capitalized software development costs. Cost
of licenses as a percentage of license revenue remained flat at 3% in both 2001
and 2002.

          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 increased $5.4 million, or 33%, from $16.3 million in
2001 to $21.7 million in 2002. As a percentage of software services revenue,
costs decreased from 50% in 2001 to 42% in 2002. The decrease as a percentage of
revenue is the result of an increase in our installed customer base with
maintenance contracts and higher implementation consultant utilization
percentages. The increase in absolute dollars was primarily attributable to an
increase in the number of implementations, training and technical support
personnel, including former Altra personnel, to support the growth of the
implementations and the installed customer base. We plan to maintain our
implementation and support services group at levels that allow us to maximize
our utilization percentages. Accordingly, we expect the dollar amount of our
cost of software implementation and support services to fluctuate with the level
of our software services revenue.

          Cost of strategic consulting: Cost of strategic consulting consisted
of personnel costs incurred in providing professional consulting services. Cost
of strategic consulting decreased $2.4 million or 55% from $4.3 million in 2001
to $1.9 million in 2002. As a percentage of strategic consulting revenue, costs
increased from 55% in 2001 to 99% in 2002. The increase as a percentage of
strategic consulting revenue resulted primarily from lower consultant
utilization percentages due to softness in the market for these services and
increased competition. As noted above, the Company ceased to operate strategic
consulting businesses in North America and Europe for energy market participants
in the third quarter of 2002. The Company will continue to perform consulting
services under a few strategic consulting contracts for regulatory agencies.
Such consulting services costs are reported as cost of software services
beginning in the third quarter of 2002.

          Amortization of acquired technology: Amortization of acquired
technology represents the amortization of the value placed on the technology
acquired through our acquisitions. Amortization of acquired technology increased
$4.5 million from $3.6 million in 2001 to $8.1 million in 2002. As a percentage
of license revenue, these costs increased from 10% in 2001 to 27% in 2002. Both
the increase in cost and percentage of license revenue was due primarily to our
acquisition of Altra.

   Operating Expenses

          Sales and marketing: Sales and marketing expenses consist primarily of
sales and marketing personnel costs, travel expenses, advertising and trade show
expenses and commissions. Sales and marketing expenses decreased $1.6 million
from $11.5 million in 2001 to $9.9 million in 2002. As a percentage of revenue,
sales and marketing expenses decreased from 15% in 2001 to 12% 2002. The
decrease as a percentage of revenue is the result of our increase in revenue in
2002 compared to 2001 and lower headcount in 2002 partially resulting from our
restructuring in Europe.

          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 increased $13.4 million, or 101%, from $13.3 million in 2001 to $26.7
million in 2002. As a percentage of revenue, research and development expenses
increased from 18% in 2001 to 32% in 2002. The increased cost as a percentage of
revenue was due primarily to an increase in personnel and to other expenses
associated with the development of new products and enhancements of existing
products, due in part to the acquisition of Altra.


                                       23



<PAGE>

          General and administrative: General and administrative expenses
consist primarily of personnel costs of executive, financial, legal, human
resources and information services personnel, as well as facility costs and
related office expenses, insurance, franchise taxes, and outside professional
fees. General and administrative expenses increased $9.9 million, or 58%, from
$17.2 million in 2001 to $27.1 million in 2002. As a percentage of revenue,
general and administrative expenses increased from 23% in 2001 to 33% in 2002.
The increase in cost is due primarily to increased staffing required to support
our expanded operations in North America, along with an increase in rent and
other expenses in 2002 compared to 2001 as a result of our acquisition of Altra.

          Restructuring charges: Restructuring charges consist of severance
costs, moving costs and related asset write-downs and lease abandonment costs.
Restructuring charges were $3.5 million in 2002. These restructuring charges in
2002 relate to the ceasing of the majority of our strategic consulting business
and our overall cost reduction program.

          Amortization of intangible assets: The amortization of intangible
assets represents the amortization of other intangible assets and for 2001,
goodwill. Amortization of intangibles decreased $9.0 million, or 82%, from $11.1
million in 2001 to $2.0 million in 2002. As a percentage of revenue,
amortization expense decreased from 15% in 2001 to 2% in 2002. Both the decrease
in expense and as a percentage of revenue are the result of the adoption of FAS
No. 142, which eliminated the amortization of goodwill effective January 1,
2002. Had FAS No. 142 been in affect for 2001, amortization expense for the year
would have been $1.8 million.

   Loss From Operations

          As a result of the variances described above, operating loss increased
by $13.6 million, from $4.8 million in 2001 to $18.4 million in 2002. Operating
expenses as a percentage of revenues were 83% and 73% for 2002 and 2001,
respectively.

   Interest and Other Income (Expense), net

          Interest and other income (expense) changed by $2.0 million, from $2.6
million of income in 2001 to $0.6 million in 2002, due primarily to interest
expense in 2002 associated with the $15 million credit facility, which was
repaid in March 2002, and lower interest rates.

   Provision for (Benefit from) Income Taxes

          Provision for (benefit from) income taxes was $(1.8) million in 2002
compared to $4.0 million in 2001. In 2002, the Company formalized transfer
pricing agreements for intercompany royalties and other charges for 2002 and
certain prior periods. The application of these intercompany agreements had no
impact on pre-tax consolidated amounts but shifted taxable income for prior
years from the U.K. to the U.S. resulting in a net tax benefit of $1.6 million.
The reduced taxable income in the U.K. resulted in a reduction of prior taxes of
$1.8 million. The increased taxable income in the U.S. resulted in no taxes
payable and a tax provision of $0.2 million as a portion of the benefit
associated with the utilization of the net operating loss carryforwards that
arose from equity related transactions was allocated to additional paid-in
capital. In addition, the Company recorded a benefit for U.K. losses incurred in
2002 compared with income tax expense recorded in 2001. The Company's U.S. net
operating loss carryforwards as of December 31, 2002 were approximately $28.0
million of which the benefit associated with the utilization of $14.7 million of
these net operating loss carryforwards will be allocated to additional
paid-in-capital.

Comparison of the Year Ended December 31, 2000 to the Year Ended December 31,
2001

   Revenues

          Licenses. License revenues increased $10.0 million, or 41%, from $24.6
million in 2000 to $34.6 million in 2001. This increase was primarily
attributable to increased demand for new and additional software products from
new and existing customers, larger average transaction sizes, and the expansion
of our domestic and international sales personnel.


                                       24



<PAGE>

          Software services. Software services revenues increased by $13.8
million, or 75%, from $18.6 million in 2000 to $32.4 million in 2001. As a
percentage of total revenues, software services increased from 36% in 2000 to
44% in 2001. This increase was due primarily to the increased licensing activity
described above, which resulted in increased revenues from customer
implementations and maintenance contracts. The greater percentage increase in
software services revenues compared to the increase in license revenues was in
part attributable to the increase in our base of customers with maintenance
contracts, in addition to 2001 installations of license sales that were made in
2000. Typically, software services, including implementation and support
services, are provided subsequent to the recognition of the license revenues.

          Strategic consulting. Strategic consulting revenues decreased by $0.8
million, or 10%, from $8.6 million in 2000 to $7.7 million in 2001. We devoted a
significant amount of our strategic consulting resources in 2000 and early 2001
to completing a large engagement for the British government, to develop the New
Electricity Trading Arrangements ("NETA"). Following the completion of the NETA
project, we transitioned resources from the NETA project to other projects,
which resulted in lower revenue for 2001.

   Cost of Revenues

          Cost of license: Cost of licenses increased $0.1 million, or 8%, from
$1.0 million in 2000 to $1.1 million in 2001. This increase in cost was due
primarily to the higher level of software licenses sold.

          Cost of software service: Cost of software services increased $5.6
million, or 52%, from $10.7 million in 2000 to $16.3 million in 2001. As a
percentage of software services revenue, costs decreased from 58% in 2000 to 50%
in 2001. The increase in costs was due primarily to the increase in the number
of our implementation, training and technical support personnel necessary to
support our increased number of new installations and our larger installed
customer base. The decrease as a percentage of revenue is the result of
efficiencies achieved through the support of a larger customer base.

          Cost of strategic consulting: Cost of strategic consulting increased
$0.6 million, or 17%, from $3.6 million in 2000 to $4.3 million in 2001. As a
percentage of strategic consulting revenue, costs increased from 43% in 2000 to
55% in 2001. The increase in costs is due primarily to an increase in the number
of our consultants and related recruiting expenses. The increase as a percentage
of revenue resulted from lower consultant utilization percentages related to our
transition from the NETA contract, along with the ramp-up of our new domestic
strategic consulting group.

          Amortization of acquired technology: Amortization of acquired
technology increased $2.0 million from $1.6 million in 2000 to $3.6 million in
2001. The increase in cost was due primarily to our acquisition of Altra in
November 2001.

   Operating Expenses

          Sales and marketing: Sales and marketing expenses increased $1.7
million, or 17%, from $9.8 million in 2000 to $11.5 million in 2001. As a
percentage of revenues, sales and marketing expenses decreased from 19% in 2000
to 15% in 2001. The increase in expenses is due to increases in advertising and
promotional expenses, headcount, recruiting expenses, and travel expenses
associated with the hiring of additional sales and marketing personnel to
support the expansion of our domestic and international sales organizations.

          Research and development: Research and development expenses increased
$6.7 million, or 102%, from $6.6 million in 2000 to $13.3 million in 2001. As a
percentage of revenues, research and development expenses increased from 13% in
2000 to 18% in 2001. The increase in costs was due primarily to the increased
number of personnel and related expenses associated with the development of new
products and enhancements of existing products.

          General and administrative: General and administrative expenses
increased $6.3 million, or 58%, from $10.9 million in 2000 to $17.2 million in
2001. As a percentage of revenues, general and administrative expenses increased
from 21% to 23%. The increase in costs was due primarily to increased staffing
required to support our expanded operations in the United States and


                                       25



<PAGE>

internationally, along with an increase in rent and other expenses related to
our increased consolidated number of employees in 2001 compared to 2000.

          Acquired in-process research and development: Acquired in-process
research and development represents the fair value of the in-process research
and development acquired during our November 2001 purchase of Altra. The Altra
acquired in-process research and development was valued at $1.3 million and was
expensed on the date of the acquisition. Altra had one project in progress at
the time of the acquisition. The project added functionality to Altra's gas
products and was completed in June 2002. At the time of acquisition estimated
future development costs were $2.5 million and actual costs were $2.3 million.

          Amortization of intangible asset: Amortization of intangible assets
increased $0.9 million, or 9%, from $10.2 million in 2000 to $11.1 million in
2001, due primarily to our incurring amortization expense related to our August
2000 acquisition of Nucleus and our November 2001 acquisition of Altra. This was
offset in part by the completion of amortization of the goodwill recognized upon
our acquisition of Caminus Limited.

   Loss From Operations

          As a result of the variances described above, operating loss decreased
by $10.6 million, from $15.5 million in 2000 to $4.8 million in 2001. Operating
expenses as a percentage of revenues decreased from 97% in 2000 to 73% in 2001.

   Other Income (Expense), Net

          Other income (expense), net increased $0.4 million, or 16%, from $2.3
million in 2000 to $2.6 million in 2001. The interest income was primarily
related to the interest earned on the resulting investments from proceeds from
our initial public offering along with gains on the sale of investments. The
decrease in interest rates in 2001 resulted in lower interest income. Other
income includes $0.8 million for the reversal of accrued taxes for compensation
related to our initial public offering that was not ultimately owed.

   Provision for Income Taxes

          Our provision for income taxes increased $1.7 million, or 72%, from
$2.3 million in 2000 to $4.0 million in 2001. This increase was primarily a
result of our increased pretax income in the United Kingdom for 2001.

Selected Quarterly Results of Operations

          The following tables represent certain unaudited consolidated
statement of operations information for each quarter in the years ended December
31, 2001 and 2002 as well as such information expressed as a percentage of total
revenues for the periods indicated. The information 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 related notes appearing
elsewhere in this annual report. We believe that 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 in the
future. See "Certain Factors that May Affect Our Business," and our audited
consolidated financial statements and related notes included elsewhere in this
annual report. We expect that our results of operations will fluctuate, and the
price of our common stock could fall if quarterly results are lower than the
expectations of securities analysts.


                                       26



<PAGE>

<TABLE>
<CAPTION>
                                                                                 Quarter Ended
                                           -----------------------------------------------------------------------------------
                                           March 31,  June 30,  Sept. 30,  Dec. 31,  March 31,  June 30,   Sept. 30,   Dec. 31,
                                              2001      2001       2001      2001       2002      2002       2002       2002
                                           ---------  --------  ---------  --------  ---------  --------  ---------   --------
                                                                  (In thousands, except per share amounts)
<S>                                         <C>        <C>       <C>        <C>       <C>         <C>       <C>        <C>
Statement of Operations Data:
Revenues:
Licenses ................................   $ 6,366    $ 7,498   $ 5,558    $15,157   $10,996    $ 4,268   $ 7,323    $ 7,127
Software services .......................     7,553      8,353     7,786      8,724    13,294     13,598    12,419     12,309
Strategic consulting ....................     2,476      1,887     1,812      1,547     1,011        908        --         --
                                            -------    -------   -------    -------   -------    -------   -------    -------
Total revenues ..........................    16,395     17,738    15,156     25,428    25,301     18,774    19,742     19,436
Gross profit ............................    10,425     12,120     9,137     17,840    14,688     10,345    12,350     13,448
Operating expenses ......................    12,754     12,823    12,068     16,696    16,467     17,892    17,848     17,020
                                            -------    -------   -------    -------   -------    -------   -------    -------
Operating income (loss) .................    (2,329)      (703)   (2,931)     1,144    (1,779)    (7,547)   (5,498)    (3,572)
Other income, net .......................       533        694       496        906      (295)       294       315        299
Provision for (benefit from) income taxes       627        938       690      1,734    (1,181)      (582)      (59)         9
                                            -------    -------   -------    -------   -------    -------   -------    -------
Net income (loss) .......................   $(2,423)   $  (947)  $(3,125)   $   316   $  (893)   $(6,671)  $(5,124)   $(3,282)
Basic and diluted net income (loss) per
   common share .........................   $ (0.15)   $ (0.06)  $ (0.20)   $  0.02   $ (0.05)   $ (0.34)  $ (0.29)   $ (0.19)
                                            -------    -------   -------    -------   -------    -------   -------    -------
Weighted average outstanding shares--
   basic ................................    15,725     15,798    15,902     16,810    18,074     19,519    17,867     16,884
Weighted average outstanding shares--
   diluted ..............................    15,725     15,798    15,902     16,965    18,074     19,519    17,867     16,884
</TABLE>

<TABLE>
<CAPTION>
                                                                                 Quarter Ended
                                           ------------------------------------------------------------------------------------
                                           March 31,  June 30,  Sept. 30,  Dec. 31,  March 31,  June 30,   Sept. 30,   Dec. 31,
                                              2001      2001       2001      2001       2002      2002        2002       2002
                                           ---------  --------  ---------  --------  ---------  --------   ---------   --------
<S>                                           <C>        <C>       <C>        <C>       <C>        <C>        <C>         <C>
Statement of Operations Data:
Revenues:
Licenses ................................      39%        42%       37%        60%       43%        23%        37%         37%
Software services .......................      46         47        51         34        53         72         63          63
Strategic consulting ....................      15         11        12          6         4          5         --          --
                                              ---        ---       ---        ---       ---        ---        ---         ---
   Total revenues .......................     100        100       100        100       100        100        100         100
Gross profit ............................      64         68        60         70        58         55         63          69
Operating expenses ......................      78         72        80         66        65         95         90          88
                                              ---        ---       ---        ---       ---        ---        ---         ---
Operating income (loss) .................     (14)        (4)      (19)         4        (7)       (40)       (28)        (18)
Other income, net .......................       3          4         3          4        (1)         1          2           1
Provision for income taxes ..............       4          5         5          7        (4)        (3)        --          --
                                              ---        ---       ---        ---       ---        ---        ---         ---
Net income (loss) .......................     (15)%       (5)%     (21)%        1%       (4)%      (36)%      (26)%       (17)%
                                              ===        ===       ===        ===       ===        ===        ===         ===
</TABLE>


                                       27



<PAGE>

Liquidity and Capital Resources

          We have historically funded our operations and acquisitions and met
our capital expenditure requirements primarily from the proceeds of equity
financings, borrowings, and cash flow from operations. Our cash, cash
equivalents and investments decreased by $0.9 million from $42.0 million at
December 31, 2001 to $41.1 million at December 31, 2002. Our working capital
decreased by $5.6 million from $32.0 million at December 31, 2001 to $26.4
million at December 31, 2002.

          Our highly liquid assets consist of cash, cash equivalents and
investments in short-term marketable securities. For the year ended December 31,
2002, our highly liquid assets decreased by $8.6 million, or 20%, from $42.0
million at December 31, 2001 to $33.4 million at December 31, 2002.

          Net cash used in operating activities for the year ended December 31,
2002 was $4.0 million. Net cash used in operating activities primarily resulted
from the reduction of deferred revenue by $4.8 million in addition to a net loss
of $16.0 million. This was offset in part by depreciation and amortization of
$13.5 million and a decrease in accounts receivable by $7.9 million.

          Our cash flow used in investing activities of $21.0 million was
primarily due to the net purchase of $15.7 million of marketable securities and
$2.8 million of capital expenditures for computer and communications equipment,
purchased software, office equipment, furniture, fixtures and leasehold
improvements.

          Net cash provided by financing activities during the year ended
December 31, 2002 was $7.1 million. During 2002 we completed our secondary
offering of 1.6 million shares raising $29.0 million of which $15.0 million was
used to repay our borrowings under a credit facility. In addition, financing
activities provided cash of $0.6 million from the sale of common stock in
connection with our employee stock purchase plan and $ 0.7 million from the
exercise of stock options. These increases in cash were offset in part by the
repurchase of our common stock for $8.2 million.

          We expect that our working capital needs will continue to grow as we
execute our growth strategy. We believe that our cash, cash equivalents and
investments, and cash anticipated to be generated from future operations will be
sufficient to meet our anticipated expenditure requirements for the foreseeable
future. In the event we engage in acquisitions in the future, however, we may be
required to raise additional equity capital or to incur indebtedness to fund the
purchase price for such acquisitions. We are not currently a party to any
agreement or arrangement for any potential acquisition of another company.

New Accounting Pronouncements

          In July 2002, the FASB issued Statement No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. Statement 146, which is effective
prospectively for exit or disposal activities initiated after December 31, 2002,
applies to costs associated with an exit activity, including restructurings, or
with a disposal of long-lived assets. Those activities can include eliminating
or reducing product lines, terminating employees and contracts and relocating
plant facilities or personnel. Statement 146 requires that exit or disposal
costs are recorded as an operating expense when the liability is incurred and
can be measured at fair value. Commitment to an exit plan or a plan of disposal
by itself will not meet the requirement for recognizing a liability and the
related expense under Statement 146. Statement 146 grandfathers the accounting
for liabilities that were previously recorded under EITF Issue 94-3.
Accordingly, Statement 146 had no effect on the restructuring costs recorded by
the Company in the second and third quarters of 2002.

          In November 2002, the FASB issued FIN 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others." This interpretation expands the disclosures to be made
by a guarantor in its financial statements about its obligations under certain
guarantees and requires the guarantor to recognize a liability for the fair
value of an obligation assumed under a guarantee. FIN 45 clarifies the
requirements of SFAS No.5, "Accounting for Contingencies," relating to
guarantees. In general, FIN 45 applies to contracts or indemnification
agreements that contingently require the guarantor to make payments to the
guaranteed party based on changes in a specified interest rate, security price,
foreign exchange rate or other variable that is related to an asset, liability,
or equity security of the guaranteed party, or failure of another party to
perform under an obligating agreement (performance guarantees). Certain
guarantee contracts are excluded from both the disclosure and recognition
requirements of this interpretation, including among others,


                                       28



<PAGE>

guarantees relating to employee compensation, residual value guarantees under
capital lease arrangements, commercial letters of credit, loan commitments,
subordinated interests in a special purpose entity, and guarantees of a
company's own future performance. Other guarantees are subject to disclosure
requirements of FIN 45 but not to the recognition provisions and include, among
others, a guarantee accounted for as a derivative instrument under SFAS No. 133,
and a guarantee covering product performance, not product price. The disclosure
requirements of FIN 45 are effective for the Company as of December 31, 2002 and
require disclosure of the nature of the warranty or guarantee, the maximum
potential amount of future payments that the guarantor could be required to make
under a guarantee, and the current amount of the liability, if any, for the
guarantor's obligations under the guarantee. The recognition requirements are to
be applied prospectively to guarantees issued or modified after December 31,
2002. Certain guarantees included in software license agreements that have been
entered into by the Company are disclosed in Note 14.

Certain Factors That May Affect Our Business

Our quarterly operating results may fluctuate substantially, which may adversely
affect our business and the market price of our common stock, particularly if
our 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. These fluctuations may adversely
affect our business, financial condition, and the market price of our common
stock particularly if our quarterly results fall below the expectations of
securities analysts. A number of factors, many of which are outside our control,
may cause variations in our quarterly revenues and operating results, including:

          o    changes in demand for our software solutions and consulting
               services;

          o    the length of our sales cycle, and the timing and recognition of
               sales of our products and services, including the timing and
               recognition of significant product orders;

          o    unexpected delays in the development and introduction of new
               products and services;

          o    increased expenses, whether related to sales and marketing,
               software development or other corporate activities;

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

          o    the mix of our revenue during any period, particularly with
               respect to the breakdown between software license and services
               revenues;

          o    the hiring, retention and utilization of personnel;

          o    costs related to the integration of people, operations and
               products from previously acquired businesses and technologies and
               from future acquisitions, if any; and

          o    general economic conditions.

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

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 consulting services to participants in the energy
industry. The success of our business is dependant on the success of our
energy-based customers, which is linked to the energy industry itself. The year
2002 was extremely challenging for energy market participants. Allegations of
energy price manipulation and "round trip" trading in the second quarter of
2002, reductions in debt ratings by credit rating agencies and asset
divestitures created a very difficult environment for all energy market
participants. This difficult environment


                                       29



<PAGE>

contributed to the reduction of IT spending by our potential customers as these
allegations were disclosed. Furthermore, because of the capital expenditures
required in connection with investing in our software and services, we believe
that demand for our software and services could be affected by fluctuations,
disruptions, instability or downturns in the energy market, which may cause
current and potential customers to leave the energy industry or delay, cancel or
reduce any planned expenditures for our software solutions and consulting
services. In addition, tighter IT spending budgets and the requirement for
higher or multiple level contract approvals by our customers may affect our
revenues.

Our sales cycle may be subject to seasonality, which could result in
fluctuations in the market price of our common stock.

          We may experience seasonality in the sales of our software. For
instance, many of our current and potential customers in the energy industry
face budgetary pressures to invest in energy software before the end of each
fiscal year. As a result, we may tend to report higher revenues during the
fourth quarter of our fiscal year and lower revenues during the first quarter of
our fiscal year. These seasonal variations in our sales may lead to fluctuations
in our quarterly operating results, which in turn may lead to volatility in the
market price of our common stock.

Substantial competition could reduce our market share and materially adversely
affect our financial performance.

          The market for products and services in the energy industry is very
competitive, and we expect competition to intensify in the future. We currently
face competition from a variety of sources, including energy software providers,
in-house development, large consultancies, and enterprise software companies.

          Some of our current and potential competitors have longer operating
histories, greater name recognition, greater resources, and a higher number of
established customer relationships than we have. Many of these competitors also
have extensive knowledge of our industry. As a result of these factors, some of
our competitors may be able to adapt more quickly to new or emerging
technologies and changes in customer requirements or may be able to devote
greater resources to the marketing and sale of their products. If we are not
able to compete effectively, our business, results of operations, and financial
condition could be materially adversely affected.

Our future results may be harmed by economic, political, regulatory and other
risks associated with international sales and operations.

          Because we sell and market our products worldwide, our business is
subject to risks associated with doing business internationally. We anticipate
that revenues from international operations could represent an increasing
portion of our total revenues going forward. Accordingly, our future results
could be harmed by a variety of factors, including:

          o    the need to comply with the laws and regulations of different
               countries;

          o    difficulties in enforcing contractual obligations and
               intellectual property rights in some countries;

          o    difficulties and costs of staffing and managing foreign
               operations;

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

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

          o    the impact of possible recessions in economies outside the United
               States; and

          o    political and economic instability, including instability related
               to terrorist attacks in the United States and abroad.


                                       30



<PAGE>

          If we are unable to minimize the risks associated with international
sales and operations, our business, results of operations, and financial
condition could be materially adversely affected, which could cause our stock
price to decline.

We may pursue strategic acquisitions, which could have an adverse impact on our
business if unsuccessful.

          We may from time to time acquire or invest in complementary companies,
products or technologies. For instance, in November 2001, we acquired Altra
Software Services, Inc. From time to time, we may evaluate other acquisition
opportunities that could provide us with additional product or services
offerings or additional industry expertise. These acquisitions, if any, may
result in difficulties for us in assimilating acquired operations and products,
and could result in the diversion of our capital and our management's attention
from other business issues and opportunities. For instance, the integration of
acquired companies may result in problems related to the integration of
technology and management teams. We may not be able to successfully integrate
operations, personnel or products that we have acquired or may acquire in the
future. If we fail to successfully integrate our recent acquisitions and any
future acquisitions, our business, results of operations, and financial
condition could be materially adversely affected. In addition, our acquisitions
may not be successful in achieving our desired strategic objectives, which would
also cause our business to suffer. Acquisitions also may present other risks,
such as exposing our company to potential unknown liabilities associated with
acquired businesses.

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 technological changes,
frequent new product introductions, uncertain product life cycles, changes in
customer demands, and evolving industry standards and regulations. 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
regulations or technology standards 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
increasingly sophisticated requirements of our customers. Software addressing
the trading, transaction processing, and risk 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 new or enhanced products could cause us to lose revenue
opportunities and customers.

Our software products may contain errors, which could damage our reputation,
decrease market acceptance of our products, cause us to lose customers and
revenue, and result in liability to us.

          Despite internal testing and testing by third parties, complex
software products such as ours often contain errors or defects, particularly
when first introduced or when new versions or enhancements are released. 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. Although our license agreements typically contain
provisions designed to limit our exposure to potential liability claims, these
provisions could be invalidated by unfavorable judicial decisions or by federal,
state, local or foreign laws or regulations. If a claim against us was
successful, we might be required to incur significant expense and to pay
substantial damages. Even if we were to prevail, the accompanying publicity
could adversely affect the demand for our products.

We may be unable to adequately protect our intellectual property rights, which
could result in the use of our technology by competitors or other third parties.

          Our success depends in large part upon our proprietary technologies.
We rely upon a combination of copyright and trade secret protection,
confidentiality and nondisclosure agreements, and licensing arrangements to
establish and protect our intellectual property rights. We seek to prevent
disclosure of our trade secrets through a number of means, including requiring


                                       31



<PAGE>

those individuals with access to our proprietary information to enter into
nondisclosure agreements with us and restricting access to our source code.
Trade secret and copyright laws, under which we seek to protect our software,
documentation, and other proprietary materials, provide only limited protection.
Despite these efforts to protect our proprietary rights, unauthorized parties
may be successful in copying or otherwise obtaining and using our software. In
addition, other parties may breach confidentiality agreements or other
protective contracts that we have entered into with them, and we may not be able
to enforce our rights in these circumstances. Any actions taken by us to enforce
our intellectual property rights could result in significant expense to us as
well as the diversion of management time and other resources.

          In addition, detecting infringement and misappropriation of
intellectual property can be difficult, and there can be no assurance that we
would detect any infringement or misappropriation of our proprietary rights.
Even if we are able to detect infringement or misappropriation of our
proprietary rights, litigation to enforce our rights could cause us to divert
significant financial and other resources from our business operations, and may
not ultimately be successful. Moreover, we license our software internationally,
and the laws of some foreign countries may not protect our proprietary rights to
the same extent as do the laws of the United States.

If we are unable to rely on licenses of intellectual property from third
parties, our ability to conduct our business could be harmed.

          We rely on third-party licensors for technology that is incorporated
into, and is necessary for the operation of, some elements of our software. 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. We cannot assure you, however, that such licenses will be available in
the future on favorable terms or at all.

We could become subject to claims of infringement of third-party intellectual
property rights, which could limit our ability to conduct our business.

          There has been a substantial amount of litigation in the software
industry regarding intellectual property rights. It is possible that, in the
future, third parties may claim that our products infringe upon their
intellectual property. Energy software product developers may increasingly
become subject to infringement claims as the number of products and competitors
in the energy software industry grows and the functionality of products from
different software developers overlaps. Parties making infringement claims may
be able to obtain an injunction against us, which could prevent us from selling
our products in the United States or in foreign countries. Any such injunction
could significantly harm our business. Moreover, any infringement claims, with
or without merit, could be time consuming, result in costly litigation, divert
management's attention, cause product shipment delays, force us to redesign or
cease selling products or services that incorporate the challenged intellectual
property, or require us to enter into royalty or licensing agreements, which may
not be available on reasonable terms or at all. Such royalty or license
agreements, if required, may not be available on terms acceptable to us or at
all, which could materially adversely affect our business. Even if we ultimately
are able to enter into royalty or license agreements, these agreements may
require us to make payments that may adversely affect our results of operations.
In addition, we may be obligated to indemnify customers against claims that we
infringe upon intellectual property rights of third parties.

We will need to recruit, train and retain sufficient qualified personnel in
order to successfully expand our business.

          Our future success will depend to a significant extent on our ability
to recruit and retain highly qualified technical, sales and marketing,
management, and other personnel. If we do not attract and retain such personnel,
we may not be able to expand our business. Competition for qualified personnel
is intense in the energy industry. There are a limited number of people with the
appropriate combination of skills needed to provide the services that our
customers demand. We expect competition for qualified personnel to remain
intense, and we may not succeed in attracting or retaining sufficient personnel.
In addition, newly hired employees generally require substantial training, which
requires significant resources and management attention. Even if we invest
significant resources to recruit, train and retain qualified personnel, we may
not be successful in our efforts.


                                       32



<PAGE>

We may seek additional financing in the future, which could be difficult to
obtain and which could dilute your ownership interest or the value of your
shares.

          We intend to continue to invest in the development of new products and
enhancements to our existing products. We believe that our current cash and
investment balances, together with cash generated from our operations, will be
sufficient to meet our operating and capital requirements for the foreseeable
future. However, from time to time, we may seek to raise additional funds
through public or private financing, or other arrangements. Obtaining additional
financing will be subject to a number of factors, including market conditions,
our operating performance, and investor sentiment. 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 also may issue
securities that have rights, preferences and privileges senior to our common
stock.

Terrorist attacks or acts of war may seriously harm our business.

          Terrorist attacks or acts of war may cause damage or disruption to our
company, our employees, our facilities and our customers, which could
significantly impact our revenues, costs and expenses, and financial condition.
The terrorist attacks that took place in the United States on September 11, 2001
were unprecedented events that have created many economic and political
uncertainties, some of which may materially adversely affect our business,
results of operations, and financial condition. The long-term effects on our
company of the September 11, 2001 attacks and the war with Iraq are unknown. The
potential for future terrorist attacks or wars, the national and international
responses to terrorist attacks or wars, and other acts of war or hostility have
created many economic and political uncertainties, which could materially
adversely affect our business, results of operations, and financial condition in
ways that we currently cannot predict.

Our performance will depend on the continued growth in demand for wholesale
energy trading, transaction processing, and risk management products and
services.

          Our future success will depend on the continued growth in demand for
wholesale energy trading, transaction processing, and risk management products
and services, which is difficult to predict. If demand for these products and
services does not continue to grow or grows more slowly than expected, demand
for our software and services will be reduced. Utilities, energy service
providers and other businesses, such as commercial or industrial customers, may
be slow to adapt to changes in the energy marketplace or may be satisfied with
existing services and solutions. This could result in less demand for our
software and services than we currently expect. Because a substantial portion of
our operating expenses is fixed in the short term, any unanticipated reduction
in demand for our software and services would negatively impact our operating
results. Even if there is significant market acceptance of wholesale energy
trading, transaction processing, and risk management products and services, we
may incur substantial expenses adapting our software and services to changing
needs.

The global energy industry is subject to extensive and varied governmental
regulations, and, as a result, our business may be adversely affected if we are
unable to successfully develop software and services that address numerous and
changing regulatory regimes.

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

          In addition, it is difficult to predict the extent to which the global
energy industry will continue to become deregulated. The bankruptcy filing of
Enron Corporation, formerly one of the energy industry's largest traders and
market makers, and the disclosures in 2002 of energy price manipulation and
"round trip" energy trading by a number of industry leaders, has resulted in


                                       33



<PAGE>

numerous government and private inquiries and investigations into Enron's
business and the energy industry in general. The final impact of such inquiries
and investigations or new governmental regulations cannot be determined at this
time. Any changes to the laws and regulations to which companies in the energy
industry are subject may materially adversely affect our business, results of
operations, and financial condition.

Our stock price has been and may remain volatile.

          The market price of our common stock has been in the past, and may in
the future be, subject to wide fluctuations in response to factors such as:

          o    variations in quarterly operating results;

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

          o    changes in recommendations or financial estimates by securities
               analysts;

          o    loss or addition of major customers;

          o    conditions and trends in the energy industry; and

          o    general conditions in the economy or the financial markets.

          In addition, in recent years, the stock market has experienced
significant price and volume fluctuations, which are often unrelated to the
performance or condition of particular companies. Such broad market fluctuations
could adversely affect the market price of our common stock. Following periods
of volatility in the market price of a particular company's securities,
securities class action litigation has often been brought against a company.
Such litigation could result in substantial litigation costs, damages awards
against us, and the diversion of our management's attention and resources. We
and certain of our current and former directors and/or executive officers were
named in one or more securities class action complaints in March 2003. See
Item 3, "Legal Proceedings".

          In addition, the market price of our common stock currently reflects
the announcement of the proposed acquisition of the Company by SunGard Data
Systems Inc. See Item 1, "Business". If such acquisition is delayed or fails
to occur, the market price of our common stock could be adversely affected.

Provisions in our charter documents and Delaware law may prevent or delay
acquisition of us.

          Our certificate of incorporation and bylaws and Delaware law contain
provisions that could make it harder for a third party to acquire us without the
consent of our board of directors. These provisions include those that:

          o    provide for a classified board of directors with staggered,
               three-year terms;

          o    limit the persons who may call special meetings of stockholders;

          o    prohibit stockholder action by written consent; and

          o    establish advance notice requirements for nominations for
               election to the board of directors or for proposing matters that
               can be presented at stockholder meetings.

          Delaware law also imposes some restrictions on mergers and other
business combinations between us and any holder of 15% or more of our
outstanding common stock. These provisions apply even if the offer may be
considered beneficial by some stockholders.


                                       34



<PAGE>

Because a small number of stockholders own a significant percentage of our
common stock, they significantly influence major corporate decisions and our
other stockholders may not be able to influence these corporate decisions.

          Our executive officers and directors and their affiliates beneficially
own approximately 26.9% of our outstanding common stock. If these parties act
together, they can significantly influence the election of all directors and the
approval of actions requiring the approval of a majority of our stockholders.
The interests of our executive officers and directors and their affiliates could
conflict with the interests of our other stockholders.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

          We have no derivative financial instruments. We invest our cash and
cash equivalents in investment-grade, debt instruments of state and municipal
governments and their agencies and high quality corporate issuers, money market
instruments and bank certificates of deposit.

          Our earnings are affected by fluctuations in the value of our
subsidiaries' functional currency as compared to the currencies of foreign
denominated sales and purchases. The results of operations of our subsidiaries,
as reported in U.S. dollars, may be significantly affected by fluctuations in
the value of the local currencies in which we transact business. Such amount is
recorded upon the translation of the foreign subsidiaries' financial statements
into U.S. dollars, and is dependent upon the various foreign exchange rates and
the magnitude of the foreign subsidiaries' financial statements. At December 31,
2002, our foreign currency translation adjustment was not material and, for the
year ended December 31, 2002, net foreign currency transaction losses were
insignificant. In addition to the direct effects of changes in exchange rates,
which are a changed dollar value of the resulting sales and related expenses,
changes in exchange rates also affect the volume of sales or the foreign
currency sales price as competitors' products become more or less attractive.

          For the year ended December 31, 2002, approximately 16% of our
revenues and 15% of our operating expenses were denominated in British pounds.
Historically, the effect of fluctuations in currency exchange rates has not had
a material impact on our operations. Our exposure to fluctuations in currency
exchange rates will increase as we expand our international operations. We
conduct our European operations in the United Kingdom and the countries of the
European Union, which are part of the European Monetary Union. There is a single
currency within certain countries of the European Union, known as the euro, and
one organization, the European Central Bank is responsible for setting European
monetary policy. We have reviewed the impact the euro has on our business and
whether this will give rise to a need for significant changes in our commercial
operations or treasury management functions. Because our European transactions
are primarily denominated in British pounds and as yet we have not experienced
any significant impact on our European operations from the fluctuations in the
exchange rate between euro and British pounds, we do not believe that the euro
conversion will have any material effect on our business, financial condition or
results of operations.

Item 8. Financial Statements and Supplementary Data

          Our financial statements and notes thereto and the report of KPMG LLP,
independent accountants, are set forth in the Index to Financial Statements at
Item 14 and incorporated herein by reference.

          Our "Selected Quarterly Results of Operations" set forth in Item 7 is
incorporated herein by reference.

Item 9. Changes In and Disagreements With Accountants on Accounting and
        Financial Disclosure

          Not applicable.


                                       35



<PAGE>

                                    PART III

Item 10. Directors and Executive Officers of the Registrant

Directors

          The Board of Directors is divided into three classes, with the members
of each class serving for a staggered three-year term. At each annual meeting of
stockholders of the Company, 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 2003. 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 2004. 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 2005.

          The Board of Directors currently consists of three Class I directors
(Anthony H. Bloom, Richard K. Landers and Clare M.J. Spottiswoode), two Class II
directors (Lawrence D. Gilson and Brian J. Scanlan) and two Class III directors
(Christopher S. Brothers and William P. Lyons). As of the date hereof, there are
two vacancies on the Board, one with respect to Class I and one with respect to
Class II. Information regarding the current directors of the Company is set
forth below.

          Anthony H. Bloom, 63, has served as a director of the Company 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. After moving to the United Kingdom in 1988, he served
as a member of the board of directors of RIT Capital Partners plc ("RIT"), a
publicly traded, London-based investment company chaired by Lord Rothschild, and
as Deputy Chairman of Sketchley plc. Mr. Bloom presently provides investment
advice to RIT and is chairman of Cine-UK Ltd. Mr. Bloom is also a director of
each of Cherokee International LLC, Power Measurement, Inc., Rio Narcea Gold
Mines Ltd., Xantrex Technology, Inc., Afri-Can Marine Minerals Corp. and
Rockridge Consolidated Ltd.

          Christopher S. Brothers, 37, has served as a director of the Company
since May 1998. Mr. Brothers is a managing director of Oaktree Capital
Management, LLC ("Oaktree"), a registered investment adviser under the
Investment Advisers Act of 1940. Prior to joining Oaktree in 1996, Mr. Brothers
worked at the New York headquarters of Salomon Brothers Inc., an investment
bank, 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, an accounting firm. Mr. Brothers serves
on the boards of directors of each of APW Ltd., Cherokee International
Corporation, National Mobile Television, Inc., Power Measurement, Inc. and
Xantrex Technology, Inc.

          Lawrence D. Gilson, 54, has served as chairman of the Board of
Directors since May 1998. Mr. Gilson is Chairman of GFI Energy Ventures LLC
(together with its affiliated entities, "GFI") and founded this and all other
GFI affiliated entities since 1995. GFI Energy Ventures LLC is a fund manager
with an exclusive energy focus. 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 LLP
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 a member of the White House staff
from 1977 through 1979 and then as vice president for corporate development
and government affairs of Amtrak, a passenger rail company, from 1979 to 1983.
He is also board chair of Power Measurement, Inc.

          Richard K. Landers, 55, has served as a director of the Company since
May 1998. Mr. Landers is a principal of GFI Energy Ventures LLC and a founder of
each GFI affiliated entity established since 1995. From 1986 to 1995, he was a
partner of Venture Associates and of Arthur Andersen LLP following that firm's
acquisition of Venture Associates. From


                                       36



<PAGE>

1979 to 1986, Mr. Landers held senior planning strategy positions in Los Angeles
and 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. He is also a director
of each of LODESTAR Corporation and RealEnergy, Inc.

          William P. Lyons, See "Executive Officers of the Registrant," included
in Part I.

          Brian J. Scanlan, 40, has served as a director since May 1998. He
served as the Company's executive vice president, future products from July 2001
to March 2003. From November 2000 to July 2001, Mr. Scanlan served as executive
vice president and chief technology officer of the Company. Mr. Scanlan served
as the Company's senior vice president and chief technology officer from January
1999 to November 2000. From May 1998 to December 1998, Mr. Scanlan served as
president of Zai*Net Software, L.P., and, from 1987 to May 1998, he served as
president of Zai*Net Software, Inc., a software firm and the Company's
predecessor.

          Clare M.J. Spottiswoode, 49, has served as a director of the Company
since December 2000. From April 1999 to April 2000, Ms. Spottiswoode was a
partner of PA Consulting Group, a management, systems and technology consulting
firm. From November 1998 to March 1999, she served as senior vice president of
Azurix, a global water services company. From 1993 to 1998, Ms. Spottiswoode
served as director general of Gas Supply, the United Kingdom's gas regulator. In
1984, she founded, and until 1990 was chairman and chief executive of,
Spottiswoode and Spottiswoode, a microcomputer software company targeted at the
financial and corporate sectors. Ms. Spottiswoode serves as chairman of the
board of each of Economatters, H2GO and Homebill and as a director of each of
Advanced Technology Ltd., British Energy and Gerard Energy Ventures. Ms.
Spottiswoode was made a commander of the British Empire in 1999.

Executive Officers

          Each executive officer of the Company serves at the discretion of the
Board and holds office until his or her successor is elected and qualified or
until his or her earlier resignation or removal. There are no familial
relationships among any of the directors or executive officers of the Company.
For additional information regarding the executive officers, see "Executive
Officers of the Registrant," included in Part I and incorporated herein by
reference.

Section 16(a) Benefecial Ownership Reporting Compliance

          Based solely on its review of copies of reports filed by reporting
persons of the Company pursuant to Section 16(a) of the Exchange Act, or written
representations from certain reporting persons that no Form 5 filing was
required for such person, the Company believes that during 2002 all filings
required to be made by its reporting persons were timely made in accordance with
the requirements of the Exchange Act.

Item 11. Executive Compensation

                           SUMMARY COMPENSATION TABLE

          The following table sets forth certain information with respect to the
total compensation paid by the Company and its subsidiaries to each of the Named
Executive Officers (as defined in Item 12, "Security Ownership of Certain
Beneficial Owners and Management") for the three years ended December 31, 2002.


                                       37



<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
                                                                                            Long Term
                                                                                           Compensation
                                                        Annual Compensation                  Awards
-------------------------------------------------------------------------------------------------------------------------
                                                                                            Securities
                                                                            Other Annual    Underlying       All Other
Name And Principal Position                 Year   Salary        Bonus      Compensation    Options(1)    Compensation(2)
-------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>    <C>       <C>            <C>               <C>              <C>
David M. Stoner(5).......................   2002   232,051          --             --              --             --
   President and Chief                      2001   350,000     250,000             --         100,000             --
   Executive Officer                        2000   250,000   2,726,677(3)   1,112,500(4)           --             --
-------------------------------------------------------------------------------------------------------------------------
William P. Lyons(6)......................   2002   199,615      99,750             --         500,000             --
   President and Chief
   Executive Officer
-------------------------------------------------------------------------------------------------------------------------
John A. Andrus(7)........................   2002   300,000     156,200             --              --          6,000
   Executive Vice President                 2001   204,133     195,000             --         250,000          1,000
   and Chief Operating Officer
-------------------------------------------------------------------------------------------------------------------------
Brian J. Scanlan(8)......................   2002   287,900          --             --              --          6,000
   Executive Vice President                 2001   250,223          --             --         100,000          1,000
   Future Products                          2000   180,000      41,161             --              --             --

-------------------------------------------------------------------------------------------------------------------------
    Joseph P. Dwyer(9)...................   2002   292,708     150,000             --              --          6,000
    Executive Vice President                2001   194,792     187,500             --         160,000          1,000
    and Chief Financial Officer
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Represents the number of shares covered by options to purchase shares of
Common Stock granted during the applicable year.

(2) The amounts in this column represent 401(k) match contributions paid by the
Company.

(3) Mr. Stoner's bonus for the year 2000 includes (a) an award of 160,209 shares
of Common Stock at a value of $2,563,344, or $16.00 per share on the date of
grant, and (b) $163,333 for services rendered during 2000.

(4) Represents the outstanding balance of a loan from the Company to Mr. Stoner,
which was forgiven by the Company in February 2000 in connection with the
Company's initial public offering.

(5) Mr. Stoner resigned on July 24, 2002.

(6) Mr. Lyons joined the Company on July 23, 2002.

(7) Mr. Andrus became an executive officer in December 2001 when he was promoted
to the positions of Executive Vice President and Chief Operating Officer.

(8) Mr. Scanlan resigned on March 31, 2003.

(9) Mr. Dwyer joined the Company in April 2001.


                                       38



<PAGE>

                        OPTION GRANTS IN LAST FISCAL YEAR

     The following table contains information concerning stock option grants
made in 2002 to each of the Named Executive Officers. The per share exercise
price of all options described below represents the fair market value of the
Company's Common Stock on the grant date.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
                                 Individual Grants
-----------------------------------------------------------------------------   Potential Realizable Value
                                                                                 At Assumed Annual Rates
                         Number Of      Percent Of                                   Of Stock Price
                         Securities    Total Options                             Appreciation For Option
                         Underlying     Granted To     Exercise                          Term(3)
                          Options      Employees In    Price Per   Expiration   --------------------------
    Name                  Granted(1)    Fiscal Year     Share(2)     Date         5%            10%
----------------------------------------------------------------------------------------------------------
<S>                        <C>             <C>            <C>       <C>         <C>           <C>
William P. Lyons......     500,000         47.8%          2.32      7/23/12     $729,518      $1,848,741
----------------------------------------------------------------------------------------------------------
David M. Stoner.......           0           --            --            --           --              --
----------------------------------------------------------------------------------------------------------
John A. Andrus........           0           --            --            --           --              --
----------------------------------------------------------------------------------------------------------
Brian J. Scanlan......           0           --            --            --           --              --
----------------------------------------------------------------------------------------------------------
Joseph P. Dwyer.......           0           --            --            --           --              --
----------------------------------------------------------------------------------------------------------
</TABLE>

                     AGGREGATED OPTION EXERCISES AND FISCAL
                             YEAR-END OPTION VALUES

     The following table summarizes certain information regarding stock options
exercised during 2002 and the number and value of unexercised stock options held
as of December 31, 2002 by each of the Named Executive Officers.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                              Number Of Securities         Value Of Unexercised In-
                                                             Underlying Unexercised          The-Money Options At
                           Shares Acquired      Value       Options At Fiscal Year-End    Fiscal Year-End Exercisable/
Name                         On Exercise     Realized(1)   Exercisable/Unexercisable(2)          Unexercisable (1)
----------------------------------------------------------------------------------------------------------------------
<S>                               <C>             <C>              <C>                            <C>
William P. Lyons........          0               $0                   0/500,000                  $0/$10,000
----------------------------------------------------------------------------------------------------------------------
David M. Stoner.........          0                0                         0/0                         0/0
----------------------------------------------------------------------------------------------------------------------
John A. Andrus..........          0                0                26,879/5,644                         0/0
----------------------------------------------------------------------------------------------------------------------
Brian J. Scanlan........          0                0               39,583/60,417                         0/0
----------------------------------------------------------------------------------------------------------------------
Joseph P. Dwyer.........          0                0                         0/0                         0/0
----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Based on the aggregate fair market value of the underlying shares of Common
Stock on December 31, 2002 ($2.34 per share), as reported on the Nasdaq National
Market, less the aggregate option exercise price.

(2) During 2002, certain shares held by Mr. Andrus and Mr. Dwyer were cancelled
pursuant to the Option Exchange Offer, as defined and described in more depth
below.


                                       39



<PAGE>


                            COMPENSATION OF DIRECTORS

         The Company reimburses 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 (except for the Chairman of the Board) is
paid $1,500 for attendance at each meeting of the Board of Directors or for each
telephonic meeting of the Board of Directors in which he or she participates.
The Chairman of the Board is paid $2,400 for attendance at each such meeting.
Each non-employee director is further entitled to $750 for each meeting of a
committee of the Board attended by the director that is held on a day other than
the day of any meeting of the full Board of Directors, except that a committee
chairman receives per-meeting fees of $1,500. Non-employee directors also
receive an annual retainer fee of $15,000, except for the Chairman of the Board,
who receives an annual retainer fee of $24,000. Other directors are not entitled
to compensation in their capacities as directors. The Company may, in its
discretion, grant stock options and other equity awards to its non-employee
directors from time to time under its stock plans.

                        REPORT OF COMPENSATION COMMITTEE
                           ON EXECUTIVE COMPENSATION

Overview and Philosophy

          The Compensation Committee of the Board of Directors is responsible
for establishing the compensation of, and the compensation policies with respect
to, the Company's executive officers, including the Company's Chief Executive
Officer, and administering and granting stock options pursuant to the Company's
stock plans. The Compensation Committee consists of Anthony H. Bloom,
Christopher S. Brothers and Clare M.J. Spottiswoode.

The objectives of the Company's executive compensation program are:

o    to attract and retain key executives critical to the long-term success of
     the Company;

o    to align the interests of executive officers with the interests of
     stockholders and the success of the Company; and

o    to recognize and reward individual performance and responsibility.

          To achieve these objectives, the Compensation Committee has adopted a
mix among the compensation elements of salary, cash bonus and, in many cases,
stock options.

Compensation Program

          Base Salary. The Compensation Committee sets the base salaries for all
executive officers, including the Chief Executive Officer. In determining
appropriate base salaries, the Compensation Committee considers a variety of
factors, including: external competitiveness, the roles and responsibilities of
the individual, the internal equity of compensation relationships, the
contributions of the individual to the Company's success and the individual's
overall compensation package. A specific factor considered for incoming
executives is the salary that the executive receives in his present position. In
addition, the Compensation Committee consults surveys and other data points from
the external marketplace, some of which reflect comparable executive salaries in
general and some of which are specific to the technology and software
industries. The Compensation Committee also considers recommendations made by
William P. Lyons, the Company's Chief Executive Officer.

          Annual Cash Incentive Opportunities. The Company believes that
executive compensation should be a function of the success and profitability of
the business. As such, the Compensation Committee establishes a bonus pool for
the Company each year and allocates the pool among the senior management team,
executives and key personnel. The amount of funds paid from the Company bonus
pool is based on various revenue factors, net income goals and/or specific
business unit and personal achievement goals, in order to align the bonus
payments to the interests of the stockholders.

          Long-Term Stock Based Incentives. The Compensation Committee also
believes that it is essential for executive officers to have the perspective and
motivation of stockholders. As such, from time to time the Compensation
Committee grants stock options to executive officers and other employees under
the Company's 1999 Stock Incentive Plan. In determining actual awards, the
Compensation Committee considers the externally competitive market, the
contributions of the recipient to the success of the Company, and the need to
retain the recipient over time. All executive officers, including the Chief
Executive Officer, are eligible to receive awards under the 1999 Stock Incentive
Plan. In addition, the Compensation Committee may, from time to time, issue
stock options to executive officers outside of the Company's stock option plans.

2002 Compensation

          Base Salary. Mr. Stoner, the Company's former Chief Executive Officer
and President, was party to an employment agreement, entered into in October
1998, that set his annual base salary at $250,000. In May 2001, Mr. Stoner's
base salary


                                       40



<PAGE>

was increased to $400,000 per year and in October 2001, Mr. Stoner's employment
agreement terminated. The Company did not enter into a new employment agreement
with Mr. Stoner. Mr. Stoner resigned in July 2002. In setting Mr. Stoner's
original salary, the Compensation Committee considered the salary that Mr.
Stoner earned at his prior position and his overall compensation package at the
Company and referred to compensation studies for chief executive officers for
comparable companies. The factors that the Compensation Committee considered in
setting Mr. Stoner's increased salary included his overall compensation package
and the salaries that chief executive officers of comparable companies in
similar industries receive. In addition, the Compensation Committee considered a
salary amount that would have motivational and retention value.

          Mr. Lyons, the Company's current Chief Executive Officer, is party to
a letter agreement, entered into in July 2002, that set his annual base salary
at $450,000. In setting Mr. Lyons' salary, the Compensation Committee considered
the salary that Mr. Lyons earned at his prior position and his overall
compensation package at the Company and referred to compensation studies for
chief executive officers for comparable companies. In addition, the Compensation
Committee considered a salary amount that would have motivational and retention
value.

          Mr. Scanlan was party to an employment agreement that set his original
annual base salary at $150,000. In November 1999, the Compensation Committee
amended Mr. Scanlan's employment agreement to increase his annual base salary to
$175,000. During 2000, the Compensation Committee reviewed Mr. Scanlan's
employment agreement and, effective in July 2000, increased his annual base
salary to $185,000. In May 2001, Mr. Scanlan's employment agreement terminated.
The Company has not entered into a new employment agreement with Mr. Scanlan. In
May 2001, Mr. Scanlan's base salary was increased to $287,900 per year. The
increase for Mr. Scanlan was based upon responsibility levels, contributions to
the success of the Company and base salaries of executives in comparable
companies. In addition, the Compensation Committee considered a salary amount
that would have motivational and retention value.

          Mr. Dwyer is a party to an employment letter, entered into in April
2001, which set his annual base salary at $275,000 per year. In April 2002, Mr.
Dwyer's base salary was increased to $300,000 per year. The increase for Mr.
Dwyer was based upon responsibility levels, contributions to the success of the
Company and base salaries of executives in comparable companies. In addition,
the Compensation Committee considered a salary amount that would have
motivational and retention value.

          In April 2001, the Company set Mr. Andrus' annual base salary at
$200,000 per year. Subsequently, in May 2001 and January 2002, Mr. Andrus'
salary was increased to $206,200 and $300,000, respectively, based upon
increased responsibility levels regarding license and services revenues,
contributions to the success of the Company, base salaries of executives in
comparable companies and motivational and retention considerations.

          Annual Cash Incentive Opportunities. Mr. Stoner did not receive a
bonus for 2002. For fiscal 2002, Mr. Lyons received a bonus of $99,750, based on
his achievement of specified financial objectives for the second half of 2002.
For fiscal year 2002, Messrs. Dwyer and Andrus received bonuses of $150,000 and
$156,200, respectively. The annual cash incentives paid to the Company's
executive officers, excluding the Chief Executive Officer, were based on
recommendations made by Mr. Lyons and were tied to the Company's financial
performance for the second half of 2002.

          Long-Term Stock Based Incentives. In February 2001, Mr. Andrus
received an option grant for 50,000 shares under the Company's 1999 Stock
Incentive Plan. In addition, in May 2001, Messrs. Stoner, Scanlan, Dwyer and
Andrus each received an option grant for 100,000, 100,000, 160,000, and 200,000
shares, respectively. The option grants to Messrs. Stoner and Scanlan were
granted under the Company's 1999 Stock Incentive Plan. The option grant to Mr.
Andrus, who was not an executive officer of the Company at the time of grant,
was issued under the 2001 Non-Officer Employee Stock Incentive Plan, and the
option grant to Mr. Dwyer was issued outside of the Company's stock incentive
plans as an inducement essential for Mr. Dwyer to enter into his employment
arrangement with the Company. All of the options vest as to 25% of the shares on
the first anniversary of the date of grant and in 36 equal monthly installments
each month thereafter. In July 2002, Mr. Lyons received an option grant for
500,000 shares of Common Stock. The option grant to Mr. Lyons was


                                       41



<PAGE>

issued outside of the Company's stock incentive plans as an inducement essential
for Mr. Lyons to enter into his employment arrangement with the Company.

          Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), generally disallows a tax deduction to public companies for certain
compensation in excess of $1,000,000 paid to the Company's chief executive
officer and four other most highly compensated executive officers. Certain
compensation, including qualified performance-based compensation, will not be
subject to the deduction limit if certain requirements are met. The Compensation
Committee reviews the potential effects of Section 162(m) periodically and
generally seeks to structure the long-term stock-based incentive compensation
granted to its executive officers in a manner that is intended to avoid the
disallowance of deductions under Section 162(m) of the Code. Nevertheless, there
can be no assurance that compensation attributable to awards granted under the
Company's plans will be treated as qualified performance-based compensation
under Section 162(m). However, the Compensation Committee reserves the right to
use its judgment to authorize compensation payments that may be subject to the
limit when the Compensation Committee believes such payments are appropriate and
in the best interests of the Company and its stockholders. For instance, the
stock options awarded to Messrs. Andrus and Dwyer in 2001, and to Mr. Lyons in
2002, were outside the Company's 1999 Stock Incentive Plan and do not comply
with the exemptions of Section 162(m).

          While the Compensation Committee does not currently intend to qualify
its annual cash incentive awards as a performance-based plan, it will continue
to monitor the impact of Section 162(m) on the Company.

          Respectfully submitted by the Compensation Committee of the Board of
Directors of Caminus Corporation:

Clare M.J. Spottiswoode (Chair)
Christopher S. Brothers
Anthony H. Bloom

                        COMPENSATION COMMITTEE INTERLOCKS
                            AND INSIDER PARTICIPATION

          Anthony H. Bloom, Christopher S. Brothers and Clare M.J. Spottiswoode,
served as members of the Compensation Committee during the Company's 2002 fiscal
year. No executive officer of the Company 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
Company's Compensation Committee. During 2002, the Compensation Committee
determined the compensation of the Company's executive officers.

                                PERFORMANCE GRAPH

          The following graph compares the cumulative total stockholder return
on the Common Stock, for the period from January 28, 2000 through December 31,
2002, with the cumulative return on (1) the Nasdaq Composite Index and (2) the
Nasdaq Computer and Data Processing Index. The comparison assumes the investment
of $100 on January 28, 2000 in the Common Stock and in each of the indices and,
in each case, assumes reinvestment of all dividends. Prior to January 28, 2000,
the Common Stock was not registered under the Exchange Act.


                             [STOCK PERFORMANCE GRAPH]


<TABLE>
<CAPTION>
                           January 28,   June 30,   December 31,   June 30,   December 31,   June 30,   December 31,
                              2000         2000         2000         2001         2001         2002         2002
                           -----------   --------   ------------   --------   ------------   --------   ------------
<S>                          <C>          <C>          <C>          <C>          <C>          <C>          <C>
Caminus Corporation          $100.00      $127.27      $120.78      $140.10      $119.48      $30.29       $12.16
                             -------      -------      -------      -------      -------      ------       ------
Nasdaq Composite Index        100.00       102.08        63.21        55.58        50.18       37.64        34.36
                             -------      -------      -------      -------      -------      ------       ------
</TABLE>


                                       42



<PAGE>

<TABLE>
<S>                          <C>          <C>          <C>          <C>          <C>          <C>         <C>
                             -------      -------      -------      -------      -------      ------      ------
Nasdaq Computer and Data      100.00        90.53        51.84        49.63        44.88       31.21       28.50
Processing Index             -------      -------      -------      -------      -------      ------      ------

</TABLE>

Item 12. Security Ownership of Certain Beneficial Owners and Management

                          SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

          The following table sets forth, as of January 19, 2003, certain
information concerning the beneficial ownership of shares of Common Stock by:
(i) each person who is known by the Company to beneficially own more than 5% of
the outstanding shares of Common Stock, (ii) each director of the Company, (iii)
the Chief Executive Officer and the three other most highly compensated
executive officers who were serving as executive officers on January 19, 2003
(the "Named Executive Officers"), and (iv) all directors and executive officers
of the Company as a group. Such information is based upon information provided
to the Company by such persons or set forth in their filings with the SEC.

<TABLE>
<CAPTION>
                                             Amount and Nature
                                               of Beneficial     Percent of
   Name and Address of Beneficial Owner        Ownership (1)      Class (2)
------------------------------------------   -----------------   ----------
<S>                                              <C>                <C>
OCM Principal Opportunities Fund, L.P. (3)       2,514,979           15%
   c/o Oaktree Capital Management, LLC
   333 South Grand Avenue, 28th Floor
   Los Angeles, CA 90071

Christopher S. Brothers (3)...............       2,514,979           15%
   c/o Oaktree Capital Management, LLC
   333 South Grand Avenue, 28th Floor
   Los Angeles, CA 90071

Credit Suisse Asset Management, LLC (4)...       1,660,500          9.9%
   466 Lexington Avenue 12th Floor
   New York, New York, 10017

Brian J. Scanlan (5)(6)...................       1,020,068          6.0%
   c/o Caminus Corporation
   825 Third Avenue, 28th Floor
   New York, NY 10022

ZAK Associates, Inc. (6)..................         946,375          5.6%
   c/o Caminus Corporation
   825 Third Avenue, 28th Floor
   New York, NY 10022

Anthony H. Bloom (7)......................         474,118          2.8%

Lawrence D. Gilson (8)(9).................         431,196          2.6%

Richard K. Landers (8)(9).................         431,196          2.6%

John A. Andrus (10).......................          31,649          0.2%

Clare M. J. Spottiswoode (11).............          18,720          0.1%

William P. Lyons..........................          49,500          0.3%
</TABLE>


                                       43



<PAGE>

<TABLE>
<S>                                              <C>               <C>
Joseph P. Dwyer...........................           3,000             *

All directors and executive officers as a
   group (9 persons) (12).................       4,543,230         26.9%
</TABLE>

* Less than 1%

(1) The inclusion herein of any shares of Common Stock deeme d beneficially
owned does not constitute an admission of beneficial ownership of those shares.
Unless otherwise indicated, each person listed above has sole votin g and
investment power with respect to the shares listed. For purposes of thi s table,
each person is deemed to beneficially own any shares subject to stock op tions,
warrants or other securities convertible into Common Stock, held by such person
that are currently exercisable or convertible, or exercisable or conv ertible
within 60 days after January 19, 2003.

(2) Number of shares deemed outstanding includes 16,782,306 shares issued and
outstanding as of January 19, 2003, plus any shares subject to stock options,
warrants or other securities convertible into Common Stock, held by the
referenced beneficial owner(s).

(3) Includes 2,509,473 shares of Common Stock held by OCM Principal
Opportunities Fund, L.P. (the "Fund"). Oaktree, a registered investment adviser
under the Investment Advisers Act of 1940, has voting and dispositive power over
the shares held by the Fund as general partner of the Fund. Christopher S.
Brothers is a managing director of Oaktree. Although Oaktree may be deemed to
beneficially own such shares for purposes of Section 13 of the Exchange Act,
Oaktree disclaims beneficial ownership of such shares except to the extent of
its pecuniary interest therein. To the extent that Mr. Brothers participates in
the process to vote or dispose of such shares, he may be deemed under certain
circumstances for purposes of Section 13 of the Exchange Act to be the
beneficial owner of such shares of Common Stock. Mr. Brothers disclaims
beneficial ownership of such shares, except to the extent of any pecuniary
interest therein. Also includes 5,506 shares of Common Stock issuable upon the
exercise of an option granted to Mr. Brothers as a director of the Company. Any
proceeds from the sale of shares issuable upon exercise of the stock option are
for the benefit of the Fund. Each of Oaktree and Mr. Brothers disclaims
beneficial ownership of the shares issuable upon exercise of such stock option,
except to the extent of any pecuniary interest therein.

(4) Beneficial ownership data as of September 30, 2002, based on information
contained in a Form 13F filed with the SEC on November 14, 2002.

(5) Includes 946,375 shares of Common Stock held by ZAK Associates, Inc., which
is an entity that is directly owned by Brian J. Scanlan and Cynthia Chang. Mr.
Scanlan and Ms. Chang are husband and wife and share voting and dispositive
power over the shares of Common Stock owned by ZAK Associates, Inc. Also
includes 20,208 shares that are owned jointly by Mr. Scanlan and Ms. Chang,
7,652 shares that are owned by Ms. Chang and 45,833 shares of Common Stock
issuable upon the exercise of an option granted to Mr. Scanlan as a director of
the Company.

(6) Includes 149,900 shares of Common Stock pledged by ZAK Associates, Inc. to
an affiliate of Banc of America Securities LLC to secure a forward sale contract
that matures on February 28, 2005.

(7) Includes 468,612 shares of Common Stock held by RIT. Anthony H. Bloom, a
former director of RIT, provides investment advice to RIT and may be deemed to
beneficially own the shares held by RIT. Mr. Bloom disclaims beneficial
ownership of such shares, except to the extent of any pecuniary interest
therein. Also includes 5,506 shares of Common Stock issuable upon the exercise
of stock options.

(8) Includes 11,012 shares of Common Stock issuable upon the exercise of stock
options, of which 5,506 are issuable upon the exercise of options granted to
Lawrence D. Gilson as a director and 5,506 shares are issuable upon the exercise
of options granted to Richard K. Landers as a director. Any proceeds from the
sale of shares issuable upon the exercise of options granted to Messrs. Gilson
and Landers are for the benefit of GFI. Each of Messrs. Gilson and Landers
disclaims beneficial


                                       44



<PAGE>

ownership of the shares issuable upon the exercise of such stock options, except
to the extent of any pecuniary interest therein.

(9) Includes 420,184 shares owned by GFI Two LLC. GFI has pledged (a) 150,000 of
such shares to an affiliate of Banc of America Securities LLC to secure a
forward sale contract that matures on June 20, 2003 and (b) 112,400 of such
shares to an affiliate of Banc of America Securities LLC to secure a forward
sale contract that matures on February 28, 2005. Lawrence D. Gilson is Chairman
of GFI, and Richard K. Landers is a principal of GFI. To the extent that Messrs.
Gilson and Landers participate in the process to vote or dispose of such shares,
Messrs. Gilson and Landers may be deemed to beneficially own the shares held by
GFI. Each of Messrs. Gilson and Landers disclaims beneficial ownership of such
shares, except to the extent of his direct pecuniary interest therein.

(10) Includes 29,701 shares of Common Stock issuable upon the exercise of stock
options.

(11) Includes 3,720 shares of Common Stock issuable upon the exercise of stock
options and 7,500 shares of Common Stock held by Ms. Spottiswoode's adult
children, with respect to which Ms. Spottiswoode possesses voting rights.

(12) Includes an aggregate of 101,278 shares of Common Stock issuable upon the
exercise of stock options.

                      EQUITY COMPENSATION PLAN INFORMATION

          The following table sets forth information relating to equity
securities authorized for issuance under the Company's equity compensation plans
as of December 31, 2002:

<TABLE>
<CAPTION>
                                                                                                Number of securities remaining
                                            Number of securities to be     Weighted-average      available for future issuance
                                             issued upon exercise of       exercise price of      under equity compensation
                                               outstanding options,      outstanding options,     plans (excluding securities
              Plan Category                    warrants and rights       warrants and rights       reflected in column (a))
-----------------------------------------   --------------------------   --------------------   ------------------------------
                                                        (a)                       (b)                        (c)
<S>                                                   <C>                       <C>                       <C>
Equity compensation plans approved
   by security holders
   2001 Plan.............................             224,249                   $ 2.45                    1,625,751
   1999 Plan.............................             153,006                   $21.89                    1,221,764
   1998 Plan.............................             194,573                   $ 4.66                           --
                                                    ---------                   ------                    ---------

      Total..............................             571,828                   $ 8.40                    2,847,515

Equity compensation plans not approved
   by security holders
   Meyers, David (1).....................             105,000                   $14.38                           --
   Lyons, William (2)....................             500,000                   $ 2.32                           --
                                                    ---------                   ------                    ---------

      Total..............................             605,000                   $ 3.94                           --
                                                    ---------                   ------                    ---------

Total....................................           1,176,828                   $ 4.44                    2,847,515
                                                    =========                   ======                    =========
</TABLE>

(1) On August 29, 2000, Mr. Meyers received 105,000 options pursuant to the
employment letter between Mr. Meyers and Caminus Corporation.

(2) A description of the options received by Mr. Lyons is contained in Item 13,
"Certain Relationships and Related Transactions," under the heading "Mr. Lyons'
Employment Letter," and incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

Mr. Lyons' Employment Letter

          In July 2002, the Company entered into an employment letter with
William P. Lyons. Under the terms of the employment letter, Mr. Lyons receives
an annual base salary of $450,000. He also received a bonus of $99,750 for
services rendered during 2002.


                                       45



<PAGE>

          Pursuant to his employment letter, in July 2002, Mr. Lyons was granted
a non-statutory option to purchase 500,000 shares of Common Stock at an exercise
price of $2.32 per share. The stock option grant to Mr. Lyons was issued outside
of the Company's stock incentive plans. This stock option was granted as an
inducement essential for Mr. Lyons to enter into his employment arrangement with
the Company. His stock option will vest as to 25% of the shares in July 2003.
Thereafter, the remaining unvested shares will vest in 36 equal monthly
installments. Mr. Lyons' stock option will immediately vest in full and become
exercisable upon a change of control of the Company.

          If the Company terminates Mr. Lyons' employment without cause, or if
Mr. Lyons resigns for good reason, Mr. Lyons will receive his base salary, his
bonus, and certain health care benefits for one year after his termination date.
If the Company terminates Mr. Lyons' employment for any reason during the first
year of his employment, other than disability, death, or for cause, or if Mr.
Lyons resigns for good reason, Mr. Lyons' stock option will immediately vest as
to 25% of the shares. In the event of such termination, the severance benefit is
payable to Mr. Lyons upon completion of the Merger in an aggregate amount of
$649,500 in cash, which is to be paid in 12 equal monthly installments.

          Mr. Lyons' employment letter contains a confidentiality provision
requiring him to execute the Company's standard form of Employee Nondisclosure
Agreement. The employment letter also provides that Mr. Lyons may maintain
membership on the board of directors of FileNET Corporation and one other
company that he designates, so long as the designated company is not a
competitor of the Company, and so long as service as a member of the board of
directors of either company does not adversely impact the discharge of his
duties to the Company.

Mr. Stoner's Employment Agreement

          In October 1998, the Company entered into an employment agreement with
David M. Stoner, which terminated in October 2001. The Company did not enter
into a new employment agreement with Mr. Stoner. Mr. Stoner resigned as Chief
Executive Officer and President of the Company in July 2002. Mr. Stoner's base
salary as of the date of his resignation was $400,000, and he received a bonus
of $163,333, $250,000 and $0 for services rendered during 2000, 2001 and 2002,
respectively. In 2000, Mr. Stoner received an award of 160,209 shares of Common
Stock. Mr. Stoner's compensation for 2000 also included an aggregate amount of
$1,112,500 for the forgiveness of outstanding indebtedness (including accrued
interest) owed by Mr. Stoner to the Company.

          In May 2001, Mr. Stoner was granted an option under the Company's 1999
Stock Incentive Plan to purchase 100,000 shares of Common Stock at an exercise
price of $24.71 per share. His stock option vested as to 25% of the shares in
May 2002. Thereafter, the stock option vested in 36 equal monthly installments.
As a result of Mr. Stoner's resignation, the stock option was terminated.

          Mr. Stoner's employment agreement contained a confidentiality
provision that survives termination of the employment agreement for so long as
Mr. Stoner retains confidential or proprietary information of the Company. Mr.
Stoner's employment agreement also provided 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. For purposes of the employment
agreement, 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.


                                       46



<PAGE>

Other Employment Arrangements

          Joseph P. Dwyer

          In April 2001, the Company entered into an employment letter with
Joseph P. Dwyer, the Company's Executive Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary. Under the terms of his employment
letter, Mr. Dwyer received an annual base salary of $275,000. In April 2002, his
base salary was increased to $300,000. Mr. Dwyer received a bonus of $62,500
upon commencement of employment and received annual bonuses of $125,000 and
$150,000 for 2001 and 2002, respectively.

          Pursuant to his employment letter, in May 2001, Mr. Dwyer was granted
a non-statutory option to purchase 160,000 shares of Common Stock at an exercise
price of $24.71 per share. This stock option was granted as an inducement
essential for Mr. Dwyer to enter into his employment arrangement with the
Company. The terms of the stock option provided that in May 2002, the stock
option would vest as to 25% of the shares. Thereafter, the remaining unvested
shares would vest in 36 equal monthly installments. In addition, the stock
option provided for immediate acceleration of vesting of unvested shares upon a
change of control of the Company. In December 2002, this option was cancelled
pursuant to the Option Exchange Offer, which is described below, under "Other
Transactions."

          In October 2002, the Company adopted the Retention Plan, described
below, which provides severance benefits to Mr. Dwyer upon certain
circumstances, in connection with certain transactions constituting a change
of control of the Company. In connection with the transaction contemplated by
the Merger Agreement, such severance benefits will be payable upon completion
of the Merger.

          Brian J. Scanlan.

          In May 1998, Zai*Net Software, L.P., which was the Company's
majority-owned subsidiary at the time, entered into an employment agreement with
Brian J. Scanlan, which was amended in November 1999. In March 1999, the Company
assumed the employment agreement when Zai*Net Software, L.P. was merged into the
Company. Mr. Scanlan's agreement terminated in May 2001. The Company has not
entered into a new employment agreement with Mr. Scanlan. Mr. Scanlan currently
receives a base salary of $287,900 per year and is eligible to participate in
the Company's bonus pool. Mr. Scanlan received a bonus of $41,161 for services
rendered during 2000. Mr. Scanlan did not receive a bonus for services rendered
during 2001 or 2002. In May 2001, Mr. Scanlan was granted an option under the
Company's 1999 Stock Incentive Plan to purchase 100,000 shares of Common Stock
at an exercise price of $24.71 per share. His stock option vested as to 25% of
the shares in May 2002. Thereafter, the remaining unvested shares will vest in
36 equal monthly installments.

          Mr. Scanlan is also a party to a covenant not to compete, entered into
in May 1998, which contains a confidentiality provision and further provides
that he may not perform services for, or hold 5% or more of the outstanding
capital stock of, a publicly traded corporation in, a competing business other
than on behalf of the Company or its affiliates anywhere in the world for the
greater of (1) three and one-half years from the date of the agreement and (2)
two years after the date of termination of Mr. Scanlan's employment. A competing
business is one that develops and markets 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.

          Mr. Scanlan resigned as an officer of the Company on March 31, 2003.


                                       47



<PAGE>

          John A. Andrus

          John A. Andrus currently receives a base salary of $300,000 per year
and is eligible to participate in the Company's bonus pool. Mr. Andrus received
a bonus of $195,000 for services rendered during 2001 and $156,200 for 2002. In
February 2001, Mr. Andrus was granted an option under the Company's 1999 Stock
Incentive Plan to purchase 50,000 shares of Common Stock at an exercise price of
$20.13 per share. In May 2001, Mr. Andrus was granted an option under the
Company's 2001 Non-Officer Employee Stock Incentive Plan to purchase 200,000
shares of Common Stock at an exercise price of $24.71 per share. The terms of
both stock options provided that 25% of the shares of Common Stock would become
vested on the first anniversary of the date of grant. Thereafter, the remaining
unvested shares would vest in 36 equal monthly installments. In addition, the
stock options provided for immediate acceleration of vesting of unvested shares
upon a change of control of the Company. In December 2002, the foregoing options
were cancelled pursuant to the Option Exchange Offer, which is described below,
under "Other Transactions"

          In October 2002, the Company adopted the Retention Plan, described
below, which provides severance benefits to Mr. Andrus upon certain
circumstances, in connection with certain transactions constituting a change
of control of the Company. In connection with the transaction contemplated by
the Merger Agreement, such severance benefits will be payable upon completion
of the Merger Company.

Management Retention Plan

          In October 2002, the Company adopted the Management Retention Plan
(the "Retention Plan"), which supplemented the employment arrangements of
Mr. Dwyer and Mr. Andrus. Under the Retention Plan, each of Mr. Andrus and
Mr. Dwyer is entitled to receive a severance payment from the Company if (i)
at any time prior to a change in control or (ii) within one year after the
occurrence of a change in control, his employment is involuntarily terminated
by the Company for any reason other than cause, death or disability, or he
voluntarily terminates his employment with the Company for good reason. The
severance payable to each of Messrs. Dwyer and Andrus under the Retention Plan
is an amount equal to three years' base annual salary and target annual cash
bonus. However, if Mr. Dwyer or Mr. Andrus (as applicable) receives newly
issued stock options from the Company (or any successor of the Company)
pursuant to the Option Exchange Offer in exchange for stock options held on
the date on which the Retention Plan was adopted by the Company, then his
severance payment will be reduced to an amount equal to one year's base annual
salary and target annual cash bonus. Notwithstanding the foregoing, if
Mr. Dwyer or Mr. Andrus (as applicable) receives new options from any
successor to the Company in a change in control transaction and, within one
year following the change in control transaction, his employment is
involuntarily terminated by the Company for any reason other than cause, death
or disability, or he voluntarily terminates his employment with the Company
for good reason, then the severance payment will be an amount equal to three
years' base salary and target annual cash bonus.

          In the case of Mr. Dwyer, the severance benefit payable in connection
with the Merger is $1,350,000, payable in one lump-sum payment. In the case of
Mr. Andrus, such amount would be $1,500,000, payable in one lump-sum payment.

          In addition, if Mr. Dwyer or Mr. Andrus becomes entitled to severance
payments pursuant to the Retention Plan, the Company or its successor will be
obligated to provide health benefits coverage and coverage under other employee
welfare benefit plans for one year for Mr. Dwyer or Mr. Andrus (as applicable)
and his dependents under the same plan(s) or arrangement(s) under which he was
covered immediately prior to the termination of employment or plan(s)
established or arrangement(s) provided by the Company or any of its subsidiaries
thereafter. The severance benefits provided by the Retention Plan will be
reduced, if applicable, to avoid "excess parachute payments."

Other Transactions

          On October 28, 2002, the Company filed a Schedule TO with the SEC
relating to an offer (the "Option Exchange Offer") to exchange for new options
all outstanding stock options to purchase shares of Common Stock that have an
exercise price greater than $10.00 per share and that were granted to current
employees of the Company or its subsidiaries under the Caminus LLC 1998 Stock
Incentive Plan, the Caminus Corporation 1999 Stock Incentive Plan, the Caminus
Corporation 2001 Non-Officer Employee Stock Incentive Plan, and certain
Nonstatutory Stock Option Agreements, upon the terms and


                                       48



<PAGE>

subject to the conditions described in an offer to exchange and a related letter
of transmittal. The Company's Chief Executive Officer and members of the Board
of Directors were not eligible to participate in the Option Exchange Offer.

          The Option Exchange Offer expired at 5:00 p.m., Eastern Standard Time,
on December 13, 2002. Pursuant to the Option Exchange Offer, the Company
accepted for cancellation options to purchase 1,564,422 shares of Common Stock,
representing approximately 98% of the options that were eligible to be tendered
for exchange pursuant to the Option Exchange Offer. Subject to the terms and
conditions of the Option Exchange Offer, the Company has committed to grant new
options to purchase an aggregate of 1,564,422 shares of Common Stock in exchange
for those options the Company accepted for exchange. The new options are to be
granted on one of the first five trading days after June 13, 2003.

          The Merger Agreement provides that, as of the effective time of the
Merger, the surviving corporation in the Merger will continue to be bound by the
Company's commitment to issue options pursuant to the Option Exchange Offer. The
options issued pursuant to the Option Exchange Offer (the "Assumed Options")
will be options to purchase shares of the common stock, $0.01 par value per
share, of SunGard ("SunGard Common Stock"). The number of shares of SunGard
Common Stock purchasable upon exercise of each of the Assumed Options will be
calculated in accordance with the ratio set forth in the Merger Agreement, and
the per share exercise price under each of the Assumed Options will be the
closing sale price of a share of SunGard Common Stock reported on the New York
Stock Exchange on the date on which the Assumed Options are granted pursuant to
the Option Exchange Offer (rounding up to the nearest cent).

Item 14. Controls and Procedures

          Within 90 days prior to the date of filing of this Annual Report on
Form 10-K, the Company carried out an evaluation, under the supervision and with
the participation of the Company's Disclosure Committee and the Company's
management, including the Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective in alerting
them on a timely basis to material information relating to the Company
(including its consolidated subsidiaries) required to be included in the
Company's periodic SEC filings. Subsequent to the date of that evaluation, there
have been no significant changes in the Company's internal controls or in other
factors that could significantly affect internal controls, nor were any
corrective actions required with regard to significant deficiencies and material
weaknesses.

                                     Part IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

          (a) The following documents are filed as part of this Form 10-K:

                    1. Financial Statements. The following financial statements
          of Caminus Corporation are filed as part of this Form 10-K on the
          pages indicated:

          CAMINUS CORPORATION AND SUBSIDIARIES

<TABLE>
<S>                                                                                                                 <C>
          Independent Auditors' Report...........................................................................   F-2
          Consolidated Balance Sheets as of December 31, 2002 and 2001...........................................   F-3
          Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000.............   F-4
          Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2002, 2001 and 2000...   F-5
          Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000.............   F-6
          Notes to Consolidated Financial Statements.............................................................   F-7
</TABLE>


                                       49



<PAGE>

                    2. Schedules are omitted because the required information is
          inapplicable or the information is presented in the consolidated
          financial statements or related notes.

                    3. Exhibits. The exhibits listed in the Exhibit Index
          immediately preceding such exhibits are filed as part of this Annual
          Report on Form 10-K.

          (b) Reports on Form 8-K.

          None.


                                       50



<PAGE>

                                   SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the day of April
7, 2003.

                                        CAMINUS CORPORATION


                                        By:       /s/ WILLIAM P. LYONS
                                            -----------------------------------
                                                     William P. Lyons
                                           President and Chief Executive Officer

          Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the 7th day of April, 2003.

<TABLE>
<CAPTION>
          Signature                                  Title                               Date
          ---------                                  -----                               ----
<S>                            <C>                                                  <C>
    /s/ WILLIAM P. LYONS                  President and Chief Executive             April 7, 2003
----------------------------
      William P. Lyons         Officer (Principal Executive Officer) and Director


     /s/ JOSEPH P. DWYER        Executive Vice President, Chief Financial Officer   April 7, 2003
----------------------------
       Joseph P. Dwyer           and Treasurer (Principal Financial Officer and
                                          Principal Accounting Officer)


   /s/ LAWRENCE D. GILSON              Chairman of the Board of Directors           April 7, 2003
----------------------------
     Lawrence D. Gilson


    /s/ BRIAN J. SCANLAN                            Director                        April 7, 2003
----------------------------
      Brian J. Scanlan


 /s/ CHRISTOPHER S. BROTHERS                        Director                        April 7, 2003
----------------------------
   Christopher S. Brothers


    /s/ ANTHONY H. BLOOM                            Director                        April 7, 2003
----------------------------
      Anthony H. Bloom


   /s/ RICHARD K. LANDERS                           Director                        April 7, 2003
----------------------------
     Richard K. Landers


/s/ CLARE M. J. SPOTTISWOODE                        Director                        April 7, 2003
----------------------------
  Clare M. J. Spottiswoode
</TABLE>


                                       51



<PAGE>

                                 CERTIFICATIONS

I, William P. Lyons, certify that:

     1.   I have reviewed this annual report on Form 10-K of Caminus
          Corporation;

     2.   Based on my knowledge, this annual report does not contain any untrue
          statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this annul report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this annual report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this annual report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and have:

               a.   designed such disclosure controls and procedures to ensure
                    that material information relating to the registrant,
                    including its consolidated subsidiaries, is made known to us
                    by others within those entities, particularly during the
                    period in which this annual report is being prepared;

               b.   evaluated the effectiveness of the registrant's disclosure
                    controls and procedures as of a date within 90 days prior to
                    the filing date of this annual report (the "Evaluation
                    Date"); and

               c.   presented in this annual report our conclusions about the
                    effectiveness of the disclosure controls and procedures
                    based on our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of registrant's board of directors (or persons
          performing the equivalent functions):

               a.   all significant deficiencies in the design or operation of
                    internal controls which could adversely affect the
                    registrant's ability to record, process, summarize and
                    report financial data and have identified for the
                    registrant's auditors any material weaknesses in internal
                    controls; and

               b.   any fraud, whether or not material, that involves management
                    or other employees who have a significant role in the
                    registrant's internal controls; and

     6.   The registrant's other certifying officers and I have indicated in
          this annual report whether or not there were significant changes in
          internal controls or in other factors that could significantly affect
          internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.


/s/ WILLIAM P. LYONS                                        Date: April 7, 2003
-------------------------------------
William P. Lyons
President and Chief Executive Officer


                                       52



<PAGE>

I, Joseph P. Dwyer, certify that:

     1.   I have reviewed this annual report on Form 10-K of Caminus
          Corporation;

     2.   Based on my knowledge, this annual report does not contain any untrue
          statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this annul report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this annual report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this annual report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and have:

               a.   designed such disclosure controls and procedures to ensure
                    that material information relating to the registrant,
                    including its consolidated subsidiaries, is made known to us
                    by others within those entities, particularly during the
                    period in which this annual report is being prepared;

               b.   evaluated the effectiveness of the registrant's disclosure
                    controls and procedures as of a date within 90 days prior to
                    the filing date of this annual report (the "Evaluation
                    Date"); and

               c.   presented in this annual report our conclusions about the
                    effectiveness of the disclosure controls and procedures
                    based on our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of registrant's board of directors (or persons
          performing the equivalent functions):

               a.   all significant deficiencies in the design or operation of
                    internal controls which could adversely affect the
                    registrant's ability to record, process, summarize and
                    report financial data and have identified for the
                    registrant's auditors any material weaknesses in internal
                    controls; and

               b.   any fraud, whether or not material, that involves management
                    or other employees who have a significant role in the
                    registrant's internal controls; and

     6.   The registrant's other certifying officers and I have indicated in
          this annual report whether or not there were significant changes in
          internal controls or in other factors that could significantly affect
          internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.


/s/ JOSEPH P. DWYER                                         Date: April 7, 2003
----------------------------------
Joseph P. Dwyer
Executive Vice President and Chief
Financial Officer


                                       53



<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                Page
                                                                                                ----
<S>                                                                                              <C>
CAMINUS CORPORATION AND SUBSIDIARIES
Independent Auditors' Report.................................................................    F-2
Consolidated Balance Sheets as of December 31, 2002 and 2001.................................    F-3
Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000...    F-4
Consolidated Statements of Stockholders' Equity for the Years Ended
   December 31, 2002, 2001 and 2000..........................................................    F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000...    F-6
Notes to Consolidated Financial Statements...................................................    F-7
</TABLE>


                                       F-1



<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Caminus Corporation

          We have audited the accompanying consolidated balance sheets of
Caminus Corporation and Subsidiaries as of December 31, 2002 and 2001 and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 2002.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

          We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those 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 our opinion.

          In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Caminus Corporation and Subsidiaries as of December 31, 2002 and 2001 and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States of America.

          As discussed in Note 2 to the consolidated financial statements, the
Company adopted the provisions of Statement of Financial Accounting Standards
No. 142, "Goodwill and Other Intangible Assets", effective January 1, 2002.


                                                                    /s/ KPMG LLP

New York, New York
February 11, 2003


                                       F-2



<PAGE>

                      CAMINUS CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                          December 31,
                                                                                   -------------------------
                                                                                        2002       2001
                                                                                      --------   --------
                                                                                   (in thousands, except per
                                                                                          share data)
<S>                                                                                   <C>        <C>
                                     ASSETS

Current assets:
   Cash and cash equivalents ...................................................      $ 18,764   $ 35,387
   Investments in short-term marketable securities .............................        14,641      6,640
   Accounts receivable, net ....................................................        13,341     22,002
   Prepaid expenses and other current assets ...................................         2,712      2,361
                                                                                      --------   --------
      Total current assets .....................................................        49,458     66,390
                                                                                      --------   --------
Other assets:
   Investments in long-term marketable securities ..............................         7,728         --
   Fixed assets, net ...........................................................         6,465      7,173
   Acquired and internally developed technology, net ...........................        11,766     18,441
   Other intangibles, net ......................................................        12,210     14,936
   Goodwill, net ...............................................................        55,865     58,045
   Other assets ................................................................         1,739      1,994
                                                                                      --------   --------
      Total assets .............................................................      $145,231   $166,979
                                                                                      ========   ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable ............................................................      $  3,347   $  4,108
   Accrued liabilities .........................................................        12,722     16,044
   Income taxes payable ........................................................           212      1,515
   Deferred revenue ............................................................         7,754     12,707
                                                                                      --------   --------
      Total current liabilities ................................................        24,035     34,374
Long-term debt .................................................................            --     15,000
                                                                                      --------   --------
Total liabilities ..............................................................        24,035     49,374
                                                                                      --------   --------
Commitments and contingencies ..................................................            --         --
Stockholders' equity:
   Common stock, par value $0.01 per share, 50,000 shares authorized; 19,682
      shares issued and 16,782 shares outstanding at December 31, 2002,
      19,663 shares issued and 17,901 shares outstanding at December 31, 2001 ..           197        197
   Additional paid-in capital ..................................................       189,714    164,131
   Treasury stock, 2,900 and 1,762 shares at cost ..............................       (12,918)    (4,911)
   Deferred compensation .......................................................            --       (677)
   Accumulated deficit .........................................................       (56,646)   (40,676)
   Accumulated other comprehensive income (loss) ...............................           849       (459)
                                                                                      --------   --------
      Total stockholders' equity ...............................................       121,196    117,605
                                                                                      --------   --------
      Total liabilities and stockholders' equity ...............................      $145,231   $166,979
                                                                                      ========   ========
</TABLE>

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


                                       F-3



<PAGE>

                      CAMINUS CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                                     -------------------------------------
                                                           2002       2001      2000
                                                         --------   -------   --------
                                                     (in thousands, except per share data)
<S>                                                      <C>        <C>       <C>
Revenues:
   Licenses ......................................       $ 29,714   $34,579   $ 24,573
   Software services .............................         51,620    32,416     18,576
   Strategic consulting ..........................          1,919     7,722      8,565
                                                         --------   -------   --------
      Total revenues .............................         83,253    74,717     51,714
Cost of revenues:
   Cost of licenses ..............................            790     1,053        978
   Cost of software services .....................         21,650    16,293     10,698
   Cost of strategic consulting ..................          1,905     4,268      3,643
   Amortization of acquired technology ...........          8,077     3,581      1,566
                                                         --------   -------   --------
      Total cost of revenues .....................         32,422    25,195     16,885
                                                         --------   -------   --------
      Gross profit ...............................         50,831    49,522     34,829
Operating expenses:
   Sales and marketing ...........................          9,927    11,488      9,836
   Research and development ......................         26,745    13,336      6,601
   General and administrative ....................         27,052    17,154     10,852
   Restructuring charges .........................          3,486        --         --
   Acquired in-process research and development ..             --     1,300         --
   Amortization of intangible assets .............          2,017    11,063     10,156
   Expenses related to initial public offering ...             --        --     12,335
   Loss on office relocation .....................             --        --        508
                                                         --------   -------   --------
      Total operating expenses ...................         69,227    54,341     50,288
                                                         --------   -------   --------
Loss from operations .............................        (18,396)   (4,819)   (15,459)
Other income (expense):
   Interest income ...............................          1,112     1,934      2,346
   Interest expense ..............................           (499)     (173)       (89)
   Other income ..................................             --       868          1
                                                         --------   -------   --------
      Total other income .........................            613     2,629      2,258
                                                         --------   -------   --------
Loss before provision for income taxes ...........        (17,783)   (2,190)   (13,201)
Provision for (benefit from) income taxes ........         (1,813)    3,989      2,315
                                                         --------   -------   --------
Net loss .........................................       $(15,970)  $(6,179)  $(15,516)
                                                         ========   =======   ========
Basic and diluted net loss per share .............       $  (0.88)  $ (0.38)  $  (1.04)
                                                         ========   =======   ========
Weighted average shares used in computing basic
   and diluted net loss per share ................         18,087    16,059     14,925
</TABLE>

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


                                       F-4



<PAGE>

                      CAMINUS CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                   Number              Additional
                                                                Outstanding   Common     Paid-in    Treasury   Subscriptions
                                                                   Shares      Stock     Capital      Stock      Receivable
                                                                -----------   ------   ----------   --------   -------------
<S>                                                                <C>         <C>      <C>         <C>           <C>
Balance at December 31, 1999.................................       9,296       110       52,670      (4,911)      (2,907)
Forgiveness of subscription receivable.......................                                                       1,000
Issuance of shares for our initial public offering...........       4,088        41       58,987
Issuance of shares to related parties........................       1,521        15        8,726
Receipt of subscription receivables..........................                                                       2,018
Issuance of stock options below fair market value............                                 60
Amortization of deferred compensation........................
Unrealized gain on marketable securities.....................
Issuance of shares related to employee stock purchase plan...          33                    451
Issuance of shares for acquisition of Nucleus................         261         3        3,754
Stock option exercises.......................................         492         5        2,444                     (111)
Net loss.....................................................
Translation adjustment.......................................
                                                                   ------      ----     --------    --------      -------
Balance at December 31, 2000.................................      15,691       174      127,092      (4,911)          --
                                                                   ------      ----     --------    --------      -------
Issuance of shares for Altra Software acquisition............       1,975        20       33,871
Issuance of stock options....................................                              1,229
Amortization of deferred compensation........................
Reclassification of unrealized gain to realized gain on
   marketable securities.....................................
Issuance of shares related to employee stock purchase plan...          49                    842
Stock option exercises.......................................         186         3        1,097
Net loss.....................................................
Translation adjustment.......................................
                                                                   ------      ----     --------    --------      -------
Balance at December 31, 2001.................................      17,901      $197     $164,131    $ (4,911)     $    --
                                                                   ------      ----     --------    --------      -------
Issuance of shares in a secondary public offering............       1,593        16       28,926
Repurchase of common shares..................................      (2,625)                            (8,195)
Return of escrowed shares from Altra Software acquisition....        (275)                            (4,723)
Amortization of deferred compensation........................
Retirement of treasury shares................................                   (18)      (4,893)      4,911
Unrealized gain on marketable securities.....................
Issuance of shares related to employee stock purchase plan...          81         1          568
Stock option exercises.......................................         107         1          747
Net loss.....................................................
Net operating loss tax benefit from equity transactions .....                                235
Translation adjustment.......................................
                                                                   ------      ----     --------    --------      -------
Balance at December 31, 2002.................................      16,782      $197     $189,714    $(12,918)     $    --
                                                                   ======      ====     ========    ========      =======

<CAPTION>
                                                                                              Accumulated
                                                                                                 Other           Total
                                                                  Deferred     Accumulated   Comprehensive   Stockholders'
                                                                Compensation     Deficit     Income (Loss)       Equity
                                                                ------------   -----------   -------------   -------------
<S>                                                                <C>           <C>             <C>            <C>
Balance at December 31, 1999.................................         (235)       (18,981)           (7)          25,739
Forgiveness of subscription receivable.......................                                                      1,000
Issuance of shares for our initial public offering...........                                                     59,028
Issuance of shares to related parties........................                                                      8,741
Receipt of subscription receivables..........................                                                      2,018
Issuance of stock options below fair market value............          (60)                                           --
Amortization of deferred compensation........................          167                                           167
Unrealized gain on marketable securities.....................                                       183              183
Issuance of shares related to employee stock purchase plan...                                                        451
Issuance of shares for acquisition of Nucleus................                                                      3,757
Stock option exercises.......................................                                                      2,338
Net loss.....................................................                     (15,516)                       (15,516)
Translation adjustment.......................................                                      (115)            (115)
                                                                   -------       --------        ------         --------
Balance at December 31, 2000.................................         (128)       (34,497)           61           87,791
                                                                   -------       --------        ------         --------
Issuance of shares for Altra Software acquisition............                                                     33,891
Issuance of stock options....................................       (1,229)                                           --
Amortization of deferred compensation........................          680                                           680
Reclassification of unrealized gain to realized gain on
   marketable securities.....................................                                      (183)            (183)
Issuance of shares related to employee stock purchase plan...                                                        842
Stock option exercises.......................................                                                      1,100
Net loss.....................................................                      (6,179)                        (6,179)
Translation adjustment.......................................                                      (337)            (337)
                                                                   -------       --------        ------         --------
Balance at December 31, 2001.................................      $  (677)      $(40,676)       $ (459)        $117,605
                                                                   -------       --------        ------         --------
Issuance of shares in a secondary public offering............                                                     28,942
Repurchase of common shares..................................                                                     (8,195)
Return of escrowed shares from Altra Software acquisition....                                                     (4,723)
Amortization of deferred compensation........................          677                                           677
Retirement of treasury shares................................                                                         --
Unrealized gain on marketable securities.....................                                        37               37
Issuance of shares related to employee stock purchase plan...                                                        569
Stock option exercises.......................................                                                        748
Net loss.....................................................                     (15,970)                       (15,970)
Net operating loss tax benefit from equity transactions .....                                                        235
Translation adjustment.......................................                                     1,271            1,271
                                                                   -------       --------        ------         --------
Balance at December 31, 2002.................................      $    --       $(56,646)       $  849         $121,196
                                                                   =======       ========        ======         ========

<CAPTION>
                                                                Comprehensive
                                                                     Loss
                                                                -------------
<S>                                                                <C>
Balance at December 31, 1999.................................
Forgiveness of subscription receivable.......................
Issuance of shares for our initial public offering...........
Issuance of shares to related parties........................
Receipt of subscription receivables..........................
Issuance of stock options below fair market value............
Amortization of deferred compensation........................
Unrealized gain on marketable securities.....................      $    183
Issuance of shares related to employee stock purchase plan...
Issuance of shares for acquisition of Nucleus................
Stock option exercises.......................................
Net loss.....................................................       (15,516)
Translation adjustment.......................................          (115)
                                                                   --------
Balance at December 31, 2000.................................      $(15,448)
                                                                   ========
Issuance of shares for Altra Software acquisition............
Issuance of stock options....................................
Amortization of deferred compensation........................
Reclassification of unrealized gain to realized gain on
   marketable securities.....................................      $   (183)
Issuance of shares related to employee stock purchase plan...
Stock option exercises.......................................
Net loss.....................................................        (6,179)
Translation adjustment.......................................          (337)
                                                                   --------
Balance at December 31, 2001.................................      $ (6,699)
                                                                   ========
Issuance of shares in a secondary public offering............
Repurchase of common shares..................................
Return of escrowed shares from Altra Software acquisition....
Amortization of deferred compensation........................
Retirement of treasury shares................................
Unrealized gain on marketable securities.....................      $     37
Issuance of shares related to employee stock purchase plan...
Stock option exercises.......................................
Net loss.....................................................       (15,970)
Net operating loss tax benefit from equity transactions......
Translation adjustment.......................................         1,271
                                                                   --------
Balance at December 31, 2002.................................      $(14,662)
                                                                   ========
</TABLE>

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


                                       F-5



<PAGE>

                      CAMINUS CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                            Year Ended December 31,
                                                                                        ------------------------------
                                                                                          2002       2001       2000
                                                                                        --------   --------   --------
                                                                                                (in thousands)
<S>                                                                                     <C>        <C>        <C>
Cash flows from operating activities:
   Net loss .........................................................................   $(15,970)  $ (6,179)  $(15,516)
   Adjustments to reconcile net loss to net cash provided by
      (used in) operating activities:
      Depreciation and amortization .................................................     13,502     16,657     12,728
      Acquired in-process research and development ..................................         --      1,300         --
      Deferred taxes ................................................................        235      1,288       (146)
      Non-cash compensation expense .................................................        677        680        167
      Non-cash expenses related to our initial public offering ......................         --         --      9,741
      Write-off of property and equipment related to office relocation ..............         --         --        322
      Bad debt expense ..............................................................        715        473        138
      Changes in operating assets and liabilities net of effects of acquisitions:
         Accounts receivable ........................................................      7,946     (1,846)    (8,185)
         Prepaid expenses and other current assets ..................................         (5)     1,490        199
         Accounts payable ...........................................................       (761)    (1,348)       311
         Accrued liabilities ........................................................     (2,152)     1,578      2,407
         Income taxes payable .......................................................     (1,648)        42      1,585
         Deferred revenue ...........................................................     (4,819)    (1,295)       346
         Other ......................................................................     (1,692)      (182)        (2)
                                                                                        --------   --------   --------
Net cash provided by (used in) operating activities .................................     (3,972)    12,658      4,095
                                                                                        --------   --------   --------
Cash flows from investing activities:
   Purchases of marketable securities ...............................................    (19,550)   (25,052)   (40,831)
   Proceeds from sales of marketable securities .....................................      3,806     43,010     14,023
   Purchases of fixed assets ........................................................     (2,780)    (2,735)    (4,348)
   Proceeds from sale of furniture and leasehold improvements .......................         --         --        129
   Acquisition of Nucleus ...........................................................         --        (92)   (13,584)
   Acquisition of Altra, net of cash acquired .......................................     (2,513)   (25,816)        --
   Acquisition of DCS ...............................................................         --         --       (184)
                                                                                        --------   --------   --------
Net cash provided by (used in) investing activities .................................    (21,037)   (10,685)   (44,795)
                                                                                        --------   --------   --------
Cash flows from financing activities:
   Proceeds from the issuance of common stock, net ..................................     28,942         --     59,028
   Cash received for stock options exercised ........................................        748      1,100      2,338
   Cash received for stock issued under employee stock purchase plan ................        569        842        451
   Repurchase of common stock .......................................................     (8,195)        --         --
   Payments of obligation to affiliate ..............................................         --         --     (1,000)
   Payments of obligation to stockholders ...........................................         --         --     (2,188)
   Proceeds from borrowings under credit facility ...................................         --     15,000         --
   Repayment of borrowings under credit facility ....................................    (15,000)        --     (3,050)
   Payment of distribution to the former shareholders of Caminus LLC ................         --         --       (452)
   Cash received for subscriptions receivable .......................................         --         --      2,018
                                                                                        --------   --------   --------
Net cash provided by financing activities ...........................................      7,064     16,942     57,145
                                                                                        --------   --------   --------
Effect of exchange rates on cash flows ..............................................      1,322       (411)      (224)
                                                                                        --------   --------   --------
Net increase (decrease) in cash and cash equivalents ................................    (16,623)    18,504     16,221
Cash and cash equivalents, beginning of year ........................................     35,387     16,883        662
                                                                                        --------   --------   --------
Cash and cash equivalents, end of year ..............................................   $ 18,764   $ 35,387   $ 16,883
                                                                                        ========   ========   ========
</TABLE>

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


                                       F-6



<PAGE>

                      CAMINUS CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (in thousands, except per share information)

1.   Business and Organization

   Nature and formation of the business

          Caminus Corporation ("Caminus" or the "Company") was incorporated in
Delaware in September 1999. Caminus was formed to succeed Caminus LLC as the
parent organization for the subsidiaries formerly held by Caminus LLC.

          Caminus provides software and software services that facilitate energy
trading, transaction processing, risk management, and decision support within
the wholesale energy markets. The Company's integrated software solutions, which
cover all functional areas across the energy value chain and handle all major
energy commodities and financial instruments, enable energy companies to more
efficiently and profitably trade energy, streamline transaction management,
manage complex risk scenarios, and make optimal operational decisions. The
Company's software can be used by any entity that buys, sells, trades, or takes
a position in energy. Caminus serves customers in every segment of the wholesale
energy industry, including traders, marketers, generators, producers, gatherers,
processors, pipelines, utilities, distribution companies, and public agencies.

          Caminus LLC was originally organized as a Delaware limited liability
company on April 29, 1998 ("Inception") by an investor group 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"). 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 Caminus LLC was granted to a member of
the investor group. This option was valued at $1,648 using the Black-Scholes
option pricing model and was accounted for as part of the purchase price of ZNLP
and CEL. Any additional grants made under the anti-dilution provision were made
at the market price at the date of grant. In connection with the Company's
initial public offering ("IPO") in 2000, this option was exercised, which
resulted in the issuance of 975 shares of common stock to a related party.

   Capitalization

          On January 27, 2000, the Company sold 4,088 shares of common stock in
its IPO, realizing net proceeds of approximately $59,028. The accompanying
financial statements reflect the recapitalization on January 27, 2000 of Caminus
LLC as a corporation, 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 entities under
common control, and the proportionate ownership interests of the members pre-
and post-merger were preserved.

          In March 2002, the Company sold 1,593 shares of common stock resulting
in net proceeds of $28,942. The Company used $15,000 of these proceeds to repay
its borrowings under a credit facility with the remainder available for working
capital and general corporate purposes.

          In the first quarter of 2002, the Company retired its then held 1,762
treasury shares, which had a cost of $4,911.

          In June 2002, the Company approved a repurchase program for up to
$10,000 of the Company's common stock. Under the program, the Company has
authorized management to purchase shares of its common stock in the open market,
in privately negotiated block trades or in other transactions from time to time.
As of December 31, 2002 the Company had repurchased 2,625 common shares for a
total of $8,195, which has been recorded as treasury stock.

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.


                                       F-7



<PAGE>

   Revenue recognition

          The Company has generated revenues from licensing its software
products, reselling its products through distributors, providing related
implementation services and support and providing strategic consulting services.
The Company follows the provisions of Statement of Position ("SOP") No. 97-2,
"Software Revenue Recognition," as amended by SOP 98-9, "Modification of SOP
97-2, Software Revenue Recognition, with Respect to Certain Transactions." Under
SOP No. 97-2, if the license agreement does not provide for significant
customization of or enhancements to the software, software license revenues are
recognized when a license agreement is executed, the product has been delivered,
all significant obligations are fulfilled, the fee is fixed or determinable and
collectibility is probable. For those license agreements where customer
acceptance is required and it is not probable, license revenues are recognized
when the software has been accepted. For those license agreements where the
licensee requires significant enhancements or customization to adapt the
software to the unique specifications of the customer or the service elements of
the arrangement are considered essential to the functionality of the software
products, both the license revenues and services revenues are recognized using
contract accounting. If acceptance of the software and related software services
is probable, the percentage of completion method is used to recognize revenue
for those types of license agreements, where progress towards completion is
measured by comparing software services hours incurred to estimated total hours
for each software license agreement. If acceptance of the software and related
software services is not probable, then the completed contract method is used
and license revenues are recognized only when the Company's obligations under
the license agreement are completed and the software has been accepted.
Accordingly, for these contracts, payments received and software license costs
are deferred until the Company's obligations under the license agreement are
completed. Anticipated losses, if any, on uncompleted contracts are recognized
in the period in which such losses are determined. For non-exclusive software
licenses with distributors to resell the Company's software in exchange for
royalty payments based on the number of software products resold, the Company
recognizes nonrefundable software license fees as revenue when the software
product master is delivered and accepted and the cash is received from the
reseller, assuming all other revenue recognition criteria are met. Subsequent
royalty revenue related to the resale of the software is recognized as earned.
Maintenance and support revenues associated with new product licenses and
renewals are deferred and recognized ratably over the contract period. Software
services revenues, not required to be recognized using contract accounting, and
strategic consulting revenues are typically billed on a time and materials basis
and are recognized as such services are performed. When software licenses,
services and/or maintenance are bundled in one arrangement, the fair value of
the maintenance fees is determined by the contractual renewal rate and the fair
value of the services is based upon the amount the Company invoices customers
for such services when they are sold on a stand alone basis.

   Software development costs

          Software development costs are expensed as incurred, except that
capitalization of software development costs begins upon establishment of
technological feasibility of the product. After technological feasibility is
established, significant software development costs are capitalized until the
product is available for general release. The capitalized software development
costs are then amortized on a straight-line basis over the estimated product
life, which is primarily four years, or on the ratio of current revenues to
total projected product revenues, whichever is greater. Through 2001, 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 had been short, and software
development costs qualifying for capitalization were insignificant. Accordingly,
the Company did not capitalize any software development costs through December
31, 2001. At the end of 2001, the Company acquired Altra Software Services, Inc,
which was involved in major software development efforts to create a new
platform for its software products and to create its next generation gas
marketing product. During the six months ended June 30, 2002, the Company
continued the development of this platform, on which the Company expects most of
its future products would reside, and continued the development of its next
generation gas marketing product. Certain elements of these efforts met the
criteria for the capitalization of software development costs, and accordingly
$1,949 of these costs was capitalized during the first six months of 2002. As
the related products were available for general release as of June 30, 2002, no
additional costs were capitalized in the second half of 2002. The related
amortization of these capitalized software development costs for the years ended
December 31, 2002, 2001 and 2000 was $245, 0 and 0, respectively, and is
included in cost of licenses revenues.

   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 stockholders' 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.


                                       F-8



<PAGE>

   Cash and cash equivalents

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

   Investments in marketable securities

          Investments are recorded at fair value and classified as
available-for-sale. Unrealized gains and losses, net of taxes, on securities
classified as available-for-sale are carried as a separate component of
stockholders' equity. Management determines the appropriate classification of
its investments in debt securities at the time of purchase and reevaluates such
determination at each balance sheet date. At December 31, 2002 and 2001 the
Company recorded cumulative unrealized gains of $37 and $0 on investments
classified as available for sale. Realized gains and losses and permanent
declines in value on available-for-sale securities are reported in other income
or expense as incurred.

   Accounts receivable

          Accounts receivable, net consist of the following:

<TABLE>
<CAPTION>
                                                                 Year Ended
                                                                December 31,
                                                             -----------------
                                                               2002      2001
                                                             -------   -------
<S>                                                          <C>       <C>
Trade ....................................................   $11,808   $21,377
Unbilled .................................................     2,334     1,207
Allowance for doubtful accounts ..........................      (801)     (582)
                                                             -------   -------
                                                             $13,341   $22,002
                                                             =======   =======
</TABLE>

          Unbilled receivables arise as revenues are recognized under the
percentage-of-completion method, but are not contractually billable until
specified dates or milestones are achieved, which are expected to occur within
one year. All amounts included in unbilled receivables are related to long-term
contracts and are reduced by appropriate progress billings.

          Activity in the allowance for doubtful accounts is as follows:

<TABLE>
<CAPTION>
                                                               Year Ended
                                                              December 31,
                                                          --------------------
                                                           2002    2001   2000
                                                          -----   -----   ----
<S>                                                       <C>     <C>     <C>
Balance, beginning of year ............................   $ 582   $ 442   $304
  Provision ...........................................     715     473    138
  Write-offs ..........................................    (496)   (333)    --
                                                          -----   -----   ----
Balance, end of year ..................................   $ 801   $ 582   $442
                                                          =====   =====   ====
</TABLE>

   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, acquired technology and other intangible assets

     In July 2001, the FASB issued Statement No. 141, Business Combinations, and
Statement No. 142, Goodwill and Other Intangible Assets. Statement 141 requires
that the purchase method of accounting be used for all business combinations
initiated after June 30, 2001, as well as all purchase method business
combinations completed after June 30, 2001. Statement 141 also specifies
criteria that intangible assets acquired in a purchase method business
combination must meet to be recognized and reported apart from goodwill, noting
that any purchase price allocable to an assembled workforce may not be accounted
for separately from goodwill. Statement 142 requires that effective January 1,
2002 goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead tested for impairment at least annually in accordance
with the provisions of Statement 142. Under Statement 142 intangible assets with
definite useful lives are amortized over their respective estimated useful lives
to their estimated residual values, and reviewed for impairment in accordance
with SFAS


                                       F-9



<PAGE>

No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

     The Company adopted the provisions of Statements 141 and 142 effective July
1, 2001 and January 1, 2002 respectively. In connection with the adoption of
Statement 142, the Company evaluated its existing intangible assets and goodwill
that were acquired in prior purchase business combinations, and intangible
assets for assembled workforce in place related to certain prior acquisitions
were reclassified to goodwill in order to conform with the new criteria in
Statement 141 for recognition of intangible assets apart from goodwill. The
Company did not modify the useful lives and residual values of its intangible
assets acquired in purchase business combinations. In connection with the
adoption of Statement 142, the Company performed an assessment of whether there
was an indication that goodwill was impaired as of the date of adoption. The
Company assigned the existing goodwill and intangible assets to its North
American reporting unit and as of the date of adoption determined that the fair
value of the reporting unit based on an independent valuation exceeded the
carrying amount and thus the goodwill and other related intangible assets were
not impaired.

     As of January 1, 2002, the Company had unamortized goodwill in the amount
of $58,045 and unamortized identifiable intangible assets in the amount of
$33,377, all of which were subject to the transition provisions of Statements
141 and 142. After the reclassification of $708 of intangible assets for an
assembled workforce in place to goodwill, adding contingent consideration
related to the Altra acquisition to goodwill, amortization expense for 2002,
reducing goodwill by $2,952 for the finalization of Altra's tangible net worth,
and reducing goodwill by $1,771 for the settlement of an indemnification claim
against Altra, as of December 31, 2002, the Company has goodwill and unamortized
identified intangible assets with definite lives of $55,865 and $22,273,
respectively. Effective January 1, 2002, the Company is not amortizing goodwill.
The following table provides the pro forma results for the years ended December
31, 2002, 2001 and 2000 as if the nonamortization provisions of Statement 142
had been in effect.

<TABLE>
<CAPTION>
                                                                   Year  Ended December 31,
                                                                -----------------------------
                                                                  2002       2001      2000
                                                                --------   -------   --------
                                                                         (Unaudited)
<S>                                                             <C>        <C>       <C>
Loss from operations ........................................   $(18,396)  $(4,819)  $(15,459)
   Add back amortization of goodwill.........................         --     9,312      8,681
                                                                --------   -------   --------
Adjusted profit (loss) from operations ......................    (18,396)    4,493     (6,778)
   Interest and other income (expense), net .................        613     2,629      2,258
                                                                --------   -------   --------
Adjusted income (loss) before provision for income taxes ....    (17,783)    7,122     (4,520)
Provision for (benefit from) income taxes....................     (1,813)    3,989      2,315
                                                                --------   -------   --------
   Adjusted net income (loss)................................    (15,970)    3,133     (6,835)
                                                                ========   =======   ========

   Adjusted net income (loss) per share .....................   $  (0.88)  $  0.20   $  (0.46)
                                                                ========   =======   ========
   Weighted average shares used in computing adjusted net
      income (loss) per share................................     18,087    16,059     14,925
                                                                ========   =======   ========
</TABLE>

   Income taxes

          Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.

          Through January 27, 2000, the Company was taxed as a partnership for
federal and state tax purposes. There were no entity level income taxes imposed
by jurisdictions in which the Company conducted its business and, therefore, the
financial statements through that date 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 in January 2000, the
Company converted to a C Corporation and thereafter became subject to federal,
state and local income taxes.

          The Company has a wholly owned subsidiary located in the United
Kingdom. As such, the entity is liable for income taxes to the Inland Revenue.
Prior to January 27, 2000, for U.S. purposes, an election was made to include
the foreign income and expenses in the U.S. tax returns. Therefore, the Company
was liable for U.K. taxes and foreign tax credits were passed through to the
stockholders.


                                      F-10



<PAGE>

   Fair value of financial instruments

          The Company's financial instruments consist primarily of cash and cash
equivalents, investments in marketable securities, accounts receivable, accounts
payable, accrued liabilities and debt. The carrying amount of these instruments,
excluding debt, approximates fair value due to the relatively short period of
time to maturity for these instruments. The carrying amount of the debt at
December 31, 2001 approximated fair value as the debt was incurred near December
31, 2001.

   Earnings (loss) per share

          Basic loss per share is computed based upon the weighted average
number of shares of common stock outstanding and diluted loss per share is
computed based upon the weighted average number of shares of common stock
outstanding increased by dilutive common stock options. At December 31, 2002,
2001, and 2000, outstanding options to purchase 1,177, 2,423, and 1,142 shares,
respectively, with exercise prices ranging from $1.60 to $29.63, $2.31 to
$29.63, and $2.31 to $29.63, respectively, were excluded from the calculation of
diluted loss per share as the effect would have been anti-dilutive.

   Accounting for stock-based compensation

          The Company follows 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," ("APB 25") to
account for its stock-based employee compensation arrangements. Had compensation
cost for the Company's option plans been determined based upon the fair value at
the grant date for awards under the plans consistent with the methodology
prescribed under SFAS 123, the Company's net loss would have been increased by
approximately $3,465, $2,042 and $635 for the years ended December 31, 2002,
2001 and 2000, respectively. This additional compensation expense would have
resulted in a net loss and net loss per share of $19,435 and $1.07, $8,221 and
$0.51, and $16,151 and $1.08 for the years ended December 31, 2002, 2001 and
2000, respectively. The per share weighted average fair value of stock options
granted during 2002, 2001 and 2000 was $7.60, $11.79 and $9.86, respectively.
The fair values of options granted to employees have 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 2.78% for 2002, 3.26% to 4.51% for 2001, and 5.75% to 5.94% for 2000;
(2) dividend yield of 0.00%; (3) expected life of five years; and (4) volatility
of 140% for 2002 and 60% for 2001 and 2000.

          The pro forma effects above may not be representative of the effects
on future years because options vest over several years and new grants generally
are made each year.

   Long-lived assets

          The Company reviews long-lived assets, such as fixed assets and
certain identifiable intangibles to be held and used or disposed of, for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. If the sum of the expected
cash flows, undiscounted and without interest, is less than the carrying amount
of the asset, an impairment loss is recognized as the amount by which the
carrying amount of the asset exceeds its fair value.

   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 July 2002, the FASB issued Statement No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. Statement 146, which is effective
prospectively for exit or disposal activities initiated after December 31, 2002,
applies to costs associated with an exit activity, including restructurings, or
with a disposal of long-lived assets. Those activities can include eliminating
or reducing product lines, terminating employees and contracts and relocating
plant facilities or personnel. Statement 146 requires that exit or disposal
costs are recorded as an operating expense when the liability is incurred and
can be measured at fair value. Commitment to an exit plan or a plan of disposal
by itself will not meet the requirement for recognizing a liability and the
related expense under Statement 146. Statement 146 grandfathers the accounting
for liabilities that were previously recorded under EITF Issue 94-3.
Accordingly, Statement 146 had no effect on the restructuring costs


                                      F-11



<PAGE>

recorded by the Company in the second and third quarters of 2002.

          In November 2002, the FASB issued FIN 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others." This interpretation expands the disclosures to be made
by a guarantor in its financial statements about its obligations under certain
guarantees and requires the guarantor to recognize a liability for the fair
value of an obligation assumed under a guarantee. FIN 45 clarifies the
requirements of SFAS No.5, "Accounting for Contingencies," relating to
guarantees. In general, FIN 45 applies to contracts or indemnification
agreements that contingently require the guarantor to make payments to the
guaranteed party based on changes in a specified interest rate, security price,
foreign exchange rate or other variable that is related to an asset, liability,
or equity security of the guaranteed party, or failure of another party to
perform under an obligating agreement (performance guarantees). Certain
guarantee contracts are excluded from both the disclosure and recognition
requirements of this interpretation, including among others, guarantees relating
to employee compensation, residual value guarantees under capital lease
arrangements, commercial letters of credit, loan commitments, subordinated
interests in a special purpose entity, and guarantees of a company's own future
performance. Other guarantees are subject to disclosure requirements of FIN 45
but not to the recognition provisions and include, among others, a guarantee
accounted for as a derivative instrument under SFAS No. 133, and a guarantee
covering product performance, not product price. The disclosure requirements of
FIN 45 are effective for the Company as of December 31, 2002 and require
disclosure of the nature of the warranty or guarantee, the maximum potential
amount of future payments that the guarantor could be required to make under a
guarantee, and the current amount of the liability, if any, for the guarantor's
obligations under the guarantee. The recognition requirements are to be applied
prospectively to guarantees issued or modified after December 31, 2002. Certain
guarantees included in software license agreements that have been entered into
by the Company are disclosed in Note 14.

3.   IPO-Related Expenses

          As a result of the Company's IPO in January 2000, certain transactions
occurred which resulted in significant charges in the first quarter of 2000.
These transactions include the earning of 386 shares of common stock that were
contingently issuable upon an IPO to the former shareholders of Caminus Energy
Limited, which resulted in a charge of $6,950 (including $772 of taxes), a
payment of approximately $522 for a special one-time bonus to the former
shareholders of Caminus Energy Limited, payment of a $1,300 termination fee to
GFI Two LLC, a principal stockholder, to cancel its consulting and advisory
agreement and the granting of 160 shares and the forgiveness of a $1,000 loan,
recorded as a subscription receivable, to the Company's President and Chief
Executive Officer, which resulted in a charge of $3,563. The $772 for taxes
related to the earning of shares by the former shareholders of Caminus Energy
Limited was not ultimately owed. The reversal of the accrued taxes was included
in other income in 2001.

4.   Acquisitions

   Altra Software Services, Inc.

          On November 20, 2001, Caminus completed its acquisition of Altra
Software Services, Inc. ("Altra"), a provider of software solutions to the
energy industry, by purchasing all of the capital stock of Altra. As a result of
the acquisition, the Company combined Caminus' historical strength in software
for the financial and risk management of power with Altra's expertise in
software for management of physical logistics and transactions in the gas
markets to create a strong suite of integrated applications for the growing
number of participants in both gas and electricity.

     The purchase price of $60,794 consisted of $24,947 in cash, the issuance of
1,975 shares of common stock with a fair value of $33,891 and approximately
$1,956 of other direct acquisition costs including liabilities for severance.
The fair value of the common shares issued was determined based upon the average
market price of the Company's common stock over the three-day period before and
after the terms of the acquisition were agreed to and announced. The purchase
price was subject to adjustment, depending on the final determined value of the
tangible net worth, as defined, of Altra, as more fully described in the Stock
Purchase Agreement. As a result, 994 of the shares of common stock issued in the
acquisition were placed in escrow pending the final determination of the
purchase price, and the resolution of certain contingencies. Of these shares,
335 of the 994 shares of common stock were sold in our secondary offering in
March 2002 realizing net proceeds of $6,273. Such cash proceeds and the then
remaining 659 shares of common stock remained in escrow. During the fourth
quarter of 2002, the tangible net worth of Altra was finalized, which resulted
in the release of 172 escrowed shares of common stock to the Company. In
addition, the Company settled an indemnification claim against Altra, which
resulted in the release of an additional 103 escrowed shares of common stock to
the Company. The portion of the purchase price related to the 275 shares of
common stock received by the Company, or $4,723, was recorded as treasury stock
and a reduction of goodwill.


                                      F-12



<PAGE>

     The cash portion of the purchase price was paid for in part from the
proceeds of a $15,000 Term Credit Agreement, dated as of November 20, 2001,
between the Company and Blue Ridge Investments LLC, and in part from Caminus'
cash and cash equivalents. A summary of the allocation of the acquisition
purchase price is as follows:

<TABLE>
<S>                                                                    <C>
Fair value of current assets acquired ..............................   $  6,428
Fair value of property and equipment acquired ......................      1,519
Fair value of current liabilities assumed ..........................    (19,195)
Acquired in-process research and development .......................      1,300
Acquired technology ................................................     17,659
Other identifiable intangible assets ...............................     11,100
Goodwill ...........................................................     41,983
                                                                       --------
                                                                       $ 60,794
                                                                       ========
</TABLE>

     The acquisition was accounted for under the purchase method of accounting.
Altra's results of operations are included in the statement of operations from
December 1, 2001. The fair value assigned to intangible assets acquired was
based on an independent appraisal. Acquired technology represents the fair value
of applications and technologies existing at the date of acquisition. The fair
value of the acquired technology was determined based on the future discounted
cash flows method, which will be amortized on a straight line basis over the
estimated product life, or the ratio of current revenue to total projected
product revenue, whichever is greater. Other intangible assets represent the
fair value of customer relationships. Goodwill is the only asset not subject to
amortization, although it will be deductible for tax purposes over fifteen
years.

     Acquired in-process research and development ("IPR&D") represents the fair
value of the project under development at the date of acquisition. The
allocation of $1,300 to IPR&D represents the estimated fair value related to an
incomplete project based on a risk-adjusted discount rate applied to projected
cash flows. At the acquisition date, the project associated with the IPR&D
efforts had not yet reached technological feasibility and had no alternative
future uses. Accordingly, these costs were expensed upon acquisition. At the
acquisition date, Altra was conducting development associated with the next
generation of its gas marketing product and was approximately 50% complete with
the IPR&D project. Estimated future development costs totaled $2,500 at the time
of acquisition. Actual research and development related to this project was
completed in June 2002 and totaled $2,265.

   Nucleus Corporation and Nucleus Energy Consulting Corporation

          On August 30, 2000, the Company acquired substantially all of the
assets and assumed certain liabilities of Nucleus Corporation and Nucleus Energy
Consulting Corporation (collectively, "Nucleus"), a provider of software
solutions to the energy industry. The purchase price of $17,606 consisted of
$13,584 in cash, the issuance of 261 shares of common stock with a fair value of
$3,757 and approximately $265 of other direct acquisition costs. A summary of
the allocation of the acquisition purchase price is as follows:

<TABLE>
<S>                                                                     <C>
Fair value of net liabilities assumed (excluding intangible assets)..   $  (391)
Acquired technology .................................................     2,960
Other identifiable intangible assets ................................     3,007
Goodwill ............................................................    12,030
                                                                        -------
                                                                        $17,606
                                                                        =======
</TABLE>

          The acquisition was accounted for under the purchase method of
accounting. The fair value assigned to intangible assets acquired was based on
an independent appraisal. Acquired 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, a covenant not to compete and work force in
place.

   Caminus Energy Limited

          In 1998, the Company acquired Caminus Energy Limited ("CEL"), a
consulting and professional services organization, which provides services and
research to companies in the energy market sector. In connection with the
acquisition, the Company granted options to purchase 481 shares to two officers
of CEL (289 and 192 shares) for $3.12 per share. These options were 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 vested and became exercisable was contingent upon all of
these conditions. No amounts were recorded for these options through December
31, 1999, as the conditions under which they would vest were not met as of
December 31, 1999. However, upon consummation of the IPO in 2000, the Company
recorded a $6,950 compensation-related charge for the excess of the fair value
of common shares issued over the exercise price, including applicable


                                      F-13



<PAGE>

taxes of $772, for the exercise of these options. As the options were exercised
on a cashless basis, the exercise resulted in the issuance of 386 shares of
common stock.

   DC Systems, Inc.

          On July 31, 1999, Caminus acquired DC Systems, Inc. ("DCS"), a
provider of software solutions to the gas industry. In July 1999, DCS declared a
dividend to the existing shareholders to cover the estimated tax liability
associated with the sale of DCS to the Company. This dividend amounted to $184
and was paid during 2000.

   Unaudited Pro Forma Financial Information

          The above acquisitions were accounted for using the purchase method of
accounting. Had the acquisition of Altra occurred on January 1, 2001 the
unaudited pro forma revenues, net loss and basic and diluted net loss per share
for the year ended December 31, 2001 would have been $100,308, $19,603, and
$1.10, respectively. The per share amount was based on a weighted average number
of shares outstanding of 17,817. These results, which give effect to certain
adjustments, including the amortization of Altra's intangible assets excluding
goodwill, interest expense, provision for income taxes and additional shares
outstanding, are not necessarily indicative of results that would have occurred
had the acquisition been consummated on January 1, 2001 or that may be obtained
in the future.

5.   Investments in Marketable Securities

          The Company invests its excess cash in investment-grade debt
instruments of state and municipal governments and their agencies and high
quality corporate issuers. All instruments with maturities at the time of
purchase greater than three months and maturities less than twelve months from
the balance sheet date are considered short-term investments, and those with
maturities greater than twelve months from the balance sheet date are considered
long-term investments.

          The Company's marketable securities are classified as
available-for-sale and are reported at fair value, with unrealized gains and
losses, net of tax, recorded in stockholders' equity.

<TABLE>
<CAPTION>
                                                   December 31, 2002                         December 31, 2001
                                     ---------------------------------------------   -------------------------------------
                                       Gross       Gross       Gross               Gross       Gross       Gross
                                     Amortized  Unrealized  Unrealized   Fair    Amortized  Unrealized  Unrealized   Fair
                                       Costs       Gains      Losses     Value     Costs       Gains      Losses     Value
                                     ---------  ----------  ----------  -------  ---------  ----------  ----------  ------
<S>                                   <C>           <C>         <C>     <C>        <C>          <C>         <C>     <C>
Taxable auction securities........    $    --       $--         $--     $    --    $5,638       $--         $--     $5,638
Non taxable auction securities ...      5,817        --          --       5,817     1,002        --          --      1,002
Government Bonds .................        281         1          --         282        --        --          --         --
Municipal bonds ..................      7,685        17          --       7,702        --        --          --         --
Corporate debt securities ........      8,550        18          --       8,568        --        --          --         --
                                      -------       ---         ---     -------    ------       ---         ---     ------
                                      $22,333       $36         $--     $22,369    $6,640       $--         $--     $6,640
                                      =======       ===         ===     =======    ======       ===         ===     ======
</TABLE>

          The contractual maturities of available-for-sale debt securities are
as follows:

<TABLE>
<CAPTION>
                                                                  December 31,
                                                                ----------------
                                                                  2002     2001
                                                                -------   ------
<S>                                                             <C>       <C>
Due within one year .........................................   $14,641   $6,640
Due after one year through two years ........................     7,728       --
                                                                -------   ------
                                                                $22,369   $6,640
                                                                =======   ======
</TABLE>


                                      F-14



<PAGE>

6.   Fixed Assets

          Fixed assets consist of the following:

<TABLE>
<CAPTION>
                                                                   December 31,
                                                                -----------------
                                                                  2002      2001
                                                                -------   -------
<S>                                                             <C>       <C>
Computer hardware, software and office equipment ............   $ 8,800   $ 7,064
Furniture, fixtures and leasehold improvements ..............     3,985     3,611
                                                                -------   -------
                                                                 12,785    10,675
Less accumulated depreciation and amortization ..............    (6,320)   (3,502)
                                                                -------   -------
                                                                $ 6,465   $ 7,173
                                                                =======   =======
</TABLE>

          Depreciation expense for the years ended December 31, 2002, 2001 and
2000 amounted to $3,163, $2,013, and $1,006, respectively.

          In December 2000, the Company relocated its headquarter offices in New
York City resulting in a disposal and write-off of furniture, fixtures, and
leasehold improvements with a net book value of $451.

7.   Intangible Assets

          The intangible assets arising from acquisition transactions and
internally developed technology are as follows:

<TABLE>
<CAPTION>
                                                                    December 31,
                                                                -------------------
                                                                  2002       2001
                                                                --------   --------
<S>                                                             <C>        <C>
Intangible Assets:
Acquired technology .........................................   $ 24,724   $ 25,026
Internally developed technology .............................      1,949         --
Goodwill ....................................................     83,014     84,583
Other intangible assets .....................................     17,847     19,167
                                                                --------   --------
                                                                 127,534    128,776
                                                                --------   --------
Accumulated Amortization:
Acquired technology .........................................   $(14,662)  $ (6,585)
Internally developed technology .............................       (245)        --
Goodwill ....................................................    (27,149)   (26,538)
Other intangible assets .....................................     (5,637)    (4,231)
                                                                --------   --------
                                                                 (47,693)   (37,354)
                                                                --------   --------
                                                                $ 79,841   $ 91,422
                                                                ========   ========
</TABLE>

          The average life of acquired technology and other intangible assets is
three and five years, respectively. Effective January 1, 2002 none of the
Company's goodwill is subject to amortization. Amortization expense for acquired
technology for the years ended December 31, 2002, 2001 and 2000 amounted to
$8,077, $3,581, and $1,566, respectively. Amortization expense for goodwill for
the years ended December 31, 2002, 2001 and 2000 amounted to $0, $9,312, and
$8,681, respectively. Amortization expense for other intangible assets for the
years ended December 31, 2002, 2001 and 2000 amounted to $2,017, $1,751, and
$1,475, respectively. The Company expects amortization of identifiable
intangible assets to be $5,913, $4,564, $2,850, $2,345, and $2,020 in 2003,
2004, 2005, 2006 and 2007, respectively.


                                      F-15



<PAGE>

8.   Accrued Liabilities

          Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                                   December 31,
                                                                -----------------
                                                                  2002     2001
                                                                -------   -------
<S>                                                             <C>       <C>
Accrued bonuses and commissions..............................   $ 6,320   $ 8,903
Accrued professional fees....................................     1,166     2,137
Accrued employee related expenses............................     1,277     1,024
Accrued rent.................................................     1,140       620
Accrued contingent acquisition consideration.................     1,011     1,856
Accrued royalties............................................       265       859
Other accrued expenses.......................................     1,543       645
                                                                -------   -------
                                                                $12,722   $16,044
                                                                =======   =======
</TABLE>

          Accrued contingent acquisition consideration relates to an acquisition
by Altra of United Information, Inc., prior to Caminus' acquisition of Altra.
The amounts owed are based upon specified percentages of revenue from the
acquired products through December 31, 2002.

9.   Deferred Revenue

          Deferred revenue consists of the following:

<TABLE>
<CAPTION>
                                                                  December 31,
                                                                ----------------
                                                                 2002     2001
                                                                ------   -------
<S>                                                             <C>      <C>
Deferred license revenue.....................................   $  980   $ 3,966
Deferred maintenance revenue.................................    6,766     7,922
Deferred consulting revenue..................................        8       819
                                                                ------   -------
                                                                $7,754   $12,707
                                                                ======   =======
</TABLE>

     Deferred revenue consists of cash received from customers in advance of
revenue recognition.

10.  Credit Facility

          On November 20, 2001, the Company entered into a credit agreement with
Blue Ridge Investments, LLC, an affiliate of Banc of America Securities, LLC,
for a $15,000 term loan to partially finance the acquisition of Altra. The loan
was due October 31, 2003 and bore interest at 10% for the first year, 12.5% from
months 13 through 18 and 15% thereafter. Additionally, the credit agreement
required that the term loan be repaid immediately from the proceeds of a public
offering of the Company's securities, to the extent such offering occurs prior
to the due date of the loan or for any acquisition or merger of the Company in
which at least 25% of the assets or common stock of the Company are acquired by
or merged with another company. In March 2002, the Company completed a secondary
offering of its common stock and used a portion of the proceeds to repay its
borrowings under this credit facility. As of December 31, 2002 and 2001, the
amount outstanding under this credit agreement was $0 and $15,000.

          On June 23, 1999, the Company entered into a credit agreement with
Fleet Bank ("Fleet"), pursuant to which the Company could borrow up to $5,000
under a revolving loan and a working capital loan. Pursuant to the agreement,
the Company was required to repay the facilities in full upon the event of a
public offering of common stock. Accordingly, the Company repaid all amounts
outstanding under the loan in February 2000 and the facility was terminated.

          Credit facilities under the agreement bore interest at either Fleet's
reference rate, generally equivalent to prime rate, or LIBOR plus an applicable
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 December 31, 1999
was 8.5%.


                                      F-16



<PAGE>

11.  Income Taxes

          The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                                        Year Ended
                                                                       December 31,
                                                                -------------------------
                                                                  2002     2001     2000
                                                                -------   ------   ------
<S>                                                             <C>       <C>      <C>
Current tax provision
   Foreign taxes ............................................   $(2,048)  $2,471   $2,315
      State and city ........................................        --      230       --
                                                                -------   ------   ------
         Total current tax provision ........................    (2,048)   2,701    2,315
                                                                -------   ------   ------
Deferred tax provision
      Foreign ...............................................        --       --       --
      Federal, state and city ...............................       235    1,288       --
                                                                -------   ------   ------
         Total deferred tax provision .......................       235    1,288       --
                                                                -------   ------   ------
Provision for income taxes ..................................   $(1,813)  $3,989   $2,315
                                                                =======   ======   ======
</TABLE>

          The provision for income taxes differs from income tax expense at the
statutory U.S. Federal income tax rate for the following reasons:

<TABLE>
<CAPTION>
                                                                        Year Ended
                                                                       December 31,
                                                                --------------------------
                                                                  2002     2001      2000
                                                                -------   ------   -------
<S>                                                             <C>       <C>      <C>
Income taxes at statutory U.S. Federal income tax rate ......   $(6,046)  $ (745)  $(4,488)
Local income taxes, net of Federal income tax benefit .......      (934)     151        --
Tax-exempt investment income ................................       (47)    (214)     (122)
Non-deductible IPO-related expenses .........................        --       --     2,540
Other non-deductible expenses ...............................       380    1,232     1,504
Foreign tax rate differential ...............................       541     (206)     (430)
Increase in valuation allowance, net ........................     6,346    3,771     3,206
UK tax refund ...............................................    (1,802)      --        --
Other .......................................................      (251)      --       105
                                                                -------   ------   -------
Provision for income taxes, at effective rate ...............   $(1,813)  $3,989   $ 2,315
                                                                =======   ======   =======
</TABLE>

          The tax effects of temporary differences that give rise to the net
deferred tax assets (liabilities) as of December 31, 2002 and 2001 are as
follows:

<TABLE>
<CAPTION>
                                                                   December 31,
                                                                -----------------
                                                                  2002     2001
                                                                -------   -------
<S>                                                             <C>       <C>
Net operating loss carryforwards ............................   $10,900   $ 4,196
Goodwill and other intangible assets amortization ...........     8,064     6,868
Deferred revenue ............................................        --       177
Accrued restructuring costs .................................       213        --
Accounts receivable allowances ..............................       202        --
Unbilled revenue ............................................      (514)       --
Capitalized software development costs ......................      (664)       --
Tax credit carryforwards ....................................       747       458
Other .......................................................       146      (177)
                                                                -------   -------
                                                                 19,094    11,522
Less: valuation allowance ...................................    19,094    11,522
                                                                -------   -------
                                                                $    --   $    --
                                                                =======   =======
</TABLE>


                                      F-17



<PAGE>

          In 2002, the Company formalized transfer pricing agreements for
intercompany royalties and other charges for 2002, 2001 and 2000. The
application of these intercompany agreements had no impact on pre-tax
consolidated amounts but shifted taxable income for prior years from the U.K. to
the U.S. resulting in a net tax benefit of $1,567. The reduced taxable income in
the U.K. resulted in a reduction of prior taxes of $1,802. The increased taxable
income in the U.S. resulted in no taxes payable and a federal tax provision of
$235 as a portion of the benefit associated with the utilization of the net
operating loss carryforwards that arose from equity related transactions was
allocated to additional paid-in capital. The Company's U.S. net operating loss
carryforwards as of December 31, 2002, which expire from 2020 to 2022, were
approximately $27,950 of which the benefit associated with the utilization of
$14,654 of these net operating loss carryforwards would be allocated to
additional paid-in-capital.

12.  401(k) Savings Plan

          The Company sponsors the Caminus Corporation 401(k) Savings Plan (the
"Plan"). All domestic employees of the Company 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 fully 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 a maximum
contribution of $6 in 2002 and $1 in 2001 and 2000 per participant. The Company
matching contribution is determined at calendar year end and is payable only to
those participants employed on that day. Participants become vested in Company
matching contributions to the Plan at the rate of 20% per year of service with
the Company. For the years ended December 31, 2002, 2001, and 2000, the Company
elected to match 100% of participant contributions up to a maximum of $6, $1 and
$1, respectively per participant. The 401(k) expense for the years ended
December 31, 2002, 2001 and 2000 totaled $703, $162 and $95, respectively.

13.  Stock Option and Purchase Plans

          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.
In February 1999, the Board of Directors approved the adoption of the ZNLP Plan
for all eligible Caminus employees (the "1998 Plan"). In September 1999, the
Company established a new stock option plan (the "1999 Plan").

          On October 28, 2002, the Company filed a Schedule TO with the
Securities and Exchange Commission relating to an offer to exchange for new
options all outstanding stock options to purchase shares of common stock that
had an exercise price greater than $10.00 per share and that were granted to
current employees of the Company or its subsidiaries under the 1998 Plan, the
1999 Plan, the Caminus Corporation 2001 Non-Officer Employee Stock Incentive
Plan (the "2001 Plan"), and certain nonstatutory stock option agreements, upon
the terms and subject to the conditions described in an offer to exchange and a
related Letter of Transmittal. The Company's Chief Executive Officer and members
of the Company's Board of Directors were not eligible to participate in the
exchange offer. The Company accepted 1,564 outstanding options for exchange and
cancellation on December 13, 2002. The new options will be granted not less than
six months and one day after the Company's acceptance of the old options for
exchange and cancellation, and will have exercise prices equal to the fair value
of the Company's common stock on the grant date of the new options. The number
of shares covered by each new option will be equal to the number of shares
covered by the old option that was exchanged for such new option, subject to
adjustments for any stock splits, stock dividends and other events affecting the
Company's capital structure that occur before the grant date of the new option.

          In August 2000, the Company granted 210 options at an exercise price
of $14.38 outside of any plan of which 105 were canceled in 2002 in connection
with the Company's option exchange program. In May 2001, the Company granted an
additional 160 options at an exercise price of $24.71 outside of any plan, which
were canceled in 2002 in connection with the Company's option exchange program.
In July 2002, the Company granted an additional 500 options at an exercise $2.32
outside of any plan. In May 2001, the Company established the 2001 Plan, a new
non-qualified stock option plan. All future grants will be made under the 2001
Plan and the 1999 Plan. The 1998 Plan, the 1999 Plan, and the 2001 Plan provide
for the issuance of stock options to key employees, directors and consultants of
the Company. Under the terms of the plans, incentive stock 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 grant. The options generally vest over a period
of four years and are exercisable for a period of ten years from the date of
grant. Under the 1998 Plan, the Company reserved 818 shares of common stock. The
Company has reserved 1,419 shares of common stock for issuance under the 1999
Plan, 200 of which were approved by shareholders in 2002. The Company has
reserved 1,850 shares under the 2001 Plan.


                                      F-18



<PAGE>

The following table summarizes the Company's option plan activity under the 2001
Plan:

<TABLE>
<CAPTION>
                                      Shares Under Option         Weighted                       Weighted
                                   -------------------------      Average         Options         Average
                                   Incentive   Non-Incentive   Exercise Price   Exercisable   Exercise Price
                                   ---------   -------------   --------------   -----------   --------------
<S>                                    <C>        <C>              <C>               <C>          <C>
Outstanding December 31, 2000...       --             --           $   --            --           $   --
   Granted......................       --            696            19.47
   Exercised....................       --             --               --
   Cancelled....................       --            (20)           17.30
                                      ---         ------
Outstanding December 31, 2001...       --            676            19.53            --           $   --
   Granted......................       --            571            13.97
   Exercised....................       --             --               --
   Cancelled....................       --         (1,023)           20.16
                                      ---         ------
Outstanding December 31, 2002...       --            224           $ 2.45            10           $17.39
                                      ===         ======                            ===
</TABLE>

          The following table summarizes information about stock options
outstanding under the 2001 Plan at December 31, 2002:

<TABLE>
<CAPTION>
                                          Options Outstanding
                         -------------------------------------------------------
                                           Weighted Average          Weighted
Range of                   Number              Remaining              Average
Exercise Prices          Outstanding   Contractual Life (Years)   Exercise Price
---------------          -----------   ------------------------   --------------
<S>                          <C>                  <C>                 <C>
$  1.60-2.05                 212                  9.8                 $ 1.62
$17.30-17.85                  12                  1.7                 $17.38
                             ---
                             224                                      $ 2.45
                             ===                                      ======
</TABLE>

          At December 31, 2002, options to purchase 1,626 shares were available
for grant under the 2001 Plan.

          The following table summarizes the Company's option plan activity
under the 1999 Plan:

<TABLE>
<CAPTION>
                                      Shares Under Option         Weighted                       Weighted
                                   -------------------------       Average        Options         Average
                                   Incentive   Non-Incentive   Exercise Price   Exercisable   Exercise Price
                                   ---------   -------------   --------------   -----------   --------------
<S>                                  <C>           <C>             <C>              <C>           <C>
Outstanding December 31, 1999...       --            --            $   --
Granted  .......................      579            34             17.33
Exercised.......................       --            --                --
Cancelled.......................      (29)           --             12.99
                                     ----          ----
Outstanding December 31, 2000...      550            34             17.54            --           $   --
Granted  .......................      267           447             23.25
Exercised.......................      (14)           (2)            13.10
Cancelled.......................     (131)           (5)            18.65
                                     ----          ----
Outstanding December 31, 2001...      672           474             21.11           160           $17.06
Granted  .......................       --            --                --
Exercised.......................      (20)           (9)            15.52
Cancelled.......................     (559)         (405)            21.22
                                     ----          ----
Outstanding December 31, 2002...       93            60            $21.89            74           $20.79
                                     ====          ====            ======           ===           ======
</TABLE>


                                      F-19



<PAGE>

          The following table summarizes information about stock options
outstanding under the 1999 Plan at December 31, 2002:

<TABLE>
<CAPTION>
                                          Options Outstanding
                                           Weighted Average          Weighted
Range of                    Number             Remaining              Average
Exercise Prices          Outstanding   Contractual Life (Years)   Exercise Price
---------------          -----------   ------------------------   --------------
<S>                          <C>                  <C>                 <C>
$11.50-16.00                  42                  7.2                 $15.08
$20.13-29.63                 111                  8.3                  24.47
                             ---
                             153                                      $21.89
                             ===                                      ======
</TABLE>

          At December 31, 2002, options to purchase 1,221 shares were available
for grant under the 1999 Plan.

          The following table summarizes the Company's option plan activity
under the 1998 Plan:

<TABLE>
<CAPTION>
                                      Shares Under Option         Weighted                       Weighted
                                   -------------------------       Average        Options         Average
                                   Incentive   Non-Incentive   Exercise Price   Exercisable   Exercise Price
                                   ---------   -------------   --------------   -----------   --------------
<S>                                  <C>             <C>           <C>              <C>          <C>
Outstanding December 31, 1999...      942            --              4.62           202          $2.76
Granted  .......................        9            --             13.97
Exercised.......................     (215)           --              3.25
Cancelled.......................     (178)           --              3.87
                                     ----           ---                             ---
Outstanding December 31, 2000...      558            --              5.55           108          $6.17
Granted  .......................       --            --                --
Exercised.......................     (170)           --              5.39
Cancelled.......................      (52)           --              4.98
                                     ----           ---                             ---
Outstanding December 31, 2001...      336            --              5.38           215          $4.70
Granted  .......................       --            --                --
Exercised.......................      (78)           --              3.39
Cancelled.......................      (64)           --             10.02
                                     ----           ---                             ---
Outstanding December 31, 2002...      194            --            $ 4.66           182          $4.56
                                     ====           ===                             ===
</TABLE>

          The following table summarizes information about stock options
outstanding under the 1998 Plan at December 31, 2002:

<TABLE>
<CAPTION>
                                          Options Outstanding
                                           Weighted Average          Weighted
Range of                    Number             Remaining              Average
Exercise Prices          Outstanding   Contractual Life (Years)   Exercise Price
---------------          -----------   ------------------------   --------------
<S>                          <C>                  <C>                 <C>
$      2.31                   69                  5.4                 $ 2.31
$ 4.62-5.78                  114                  7.0                   5.54
$9.03-11.13                   11                  4.4                  10.47
                             ---
                             194                                      $ 4.66
                             ===                                      ======
</TABLE>

          An option that was granted outside of any of the Company's option
plans in 1998 was exercised in February 2001, which resulted in the issuance of
277 shares of common stock.

          The Company applies APB 25 and related interpretations in accounting
for its plans and other stock-based compensation issued to employees. On May 2,
2001, the shareholders authorized an additional 717 shares to be available for
grant under the 1999 Plan. The Company had previously granted, subject to
shareholder approval, approximately 182 options with exercise prices ranging
from $20.13 to $29.63. The closing price of the Company's stock on May 2, 2001
was $31.15. As a result in May 2001, the Company recorded deferred compensation
of approximately $1,229, which was being amortized over the four-year vesting
period of the options but was accelerated and fully amortized in 2002 as a
result of option cancellations under the Company's option exchange program. The
related non-cash compensation expense for 2002 and 2001 was $590 and $639,
respectively. In addition, for the years ended December 31, 2002, 2001 and 2000,
the Company recognized $87, $41 and $167 of compensation expense, respectively,
associated with options granted to employees with exercise prices below the
common stock's


                                      F-20



<PAGE>

fair market value on the date of grant, which includes expensing the remaining
balance in 2002 as a result of option cancellations under the Company's option
exchange program.

          Effective September 30, 1999, the Company adopted an employee stock
purchase plan to provide employees who meet eligibility requirements an
opportunity to purchase shares of its common stock through payroll deductions of
up to 10% of eligible compensation. Bi-annually, participant account balances
are used to purchase shares of stock at 85% of the fair market value of shares
on the exercise date or the offering date. The plan remains in effect unless
terminated by the Board of Directors. A total of 595 shares are available for
purchase under the plan, 500 of which were approved by shareholders in 2002. In
2002 and 2001, 81 and 49 shares were purchased under the plan for $569 and $842,
respectively.

14.  Commitments and Contingencies

          The Company leases office space under long-term leases in New York,
New York; London, England; Calgary, Canada; and Houston, Texas.

          Future minimum annual lease commitments net of sublease income are as
follows:

<TABLE>
<S>                                                                      <C>
2003..................................................................     2,648
2004..................................................................     2,373
2005..................................................................     1,742
2006..................................................................     1,631
2007..................................................................     1,631
Thereafter............................................................     4,285
                                                                         -------
                                                                         $14,310
                                                                         =======
</TABLE>

          Rent expense for the years ended December 31, 2002, 2001 and 2000 was
$4,566, $2,863, and $2,232, respectively. Rent expense for 2002 included $892
relating to early lease termination costs.

          In December 2002, the Company entered into an arrangement with a third
party to assist in the development of its next generation gas pipeline product.
Under the terms of this agreement, the Company is obligated to pay $1,300 to the
third party for their contribution to the product development. In addition,
royalties would be due to the third party, if and when the product is
successfully developed and sold to end users.

          The Company typically provides its customers a warranty on its
software for a period of 90 days. Such warranties are accounted for in
accordance with SFAS No. 5, "Accounting for Contingencies." Through
December 31, 2002, the Company has not incurred any costs related to
warranty obligations.

          Under the terms of substantially all of its software license
agreements, the Company has agreed to indemnify its customers for all costs
arising from claims against such customers based on, among other things,
allegations that the Company's software infringes the intellectual property
rights of a third party. In most cases, in the event of an infringement claim,
the Company retains the right to (i) procure for the customer the right to
continue using the software; (ii) replace or modify the software to eliminate
the infringement while providing substantially equivalent functionality; or
(iii) if neither (i) or (ii) can be reasonably achieved, the Company may
terminate the license agreement and refund to the customer a pro-rata portion of
the license fee paid to the Company. Such indemnification provisions are
accounted for in accordance with SFAS No. 5. Through December 31, 2002, there
have not been any claims under such indemnification provisions.

          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 material adverse effect on the financial
position, results of operations or cash flows of the Company.

15.  Related Party Transactions

          On October 21, 1998, in connection with his employment with the
Company, the Chief Executive Officer ("CEO") was loaned $1,000 by the Company in
order to acquire shares of common stock. The loan bore interest at a rate of 9%,
and all accrued and unpaid interest was payable upon maturity in October 2008.
In addition, on October 21, 1998, the Company loaned the CEO $100. The loan bore
interest at a rate of 9%. The $100 loan was repaid, including interest, in
November 1999. In connection with the CEO's employment agreement, if certain
performance criteria and other conditions were met, the CEO would receive a
bonus


                                      F-21



<PAGE>

based on forgiveness of the entire outstanding amount of the $1,000 loan plus
accrued interest as well as additional shares of common stock. Such amounts were
earned upon the IPO and resulted in a compensation related charge in the quarter
ended March 31, 2000 of $3,563.

          During 2000, Caminus made distributions of $452 to its shareholders,
for the estimated tax associated with the former LLC's taxable income.

          On September 1, 1998, in connection with his employment with the
Company, an employee was loaned $75 by the Company to acquire a portion of his
shares of common stock. The loan bore interest at a rate of 9% and was repaid in
April 2000.

          Upon the IPO closing in February 2000, the Company paid two officers
of the Company (former shareholders of CEL) a special bonus of $476.

          As outlined in the former LLC Agreement, the Company was 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 was calculated as 1% of the shareholders
aggregate adjusted capital contribution. In November 1999, the Company agreed to
terminate its advisory arrangement with GFI effective as of the IPO closing in
February 2000. As consideration, the Company paid GFI $1,300 from the net
proceeds of the initial public offering.

16.  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
maintenance and support provided to its customers in the event of non-payment.
During the years ended December 31, 2002, 2001 and 2000, there were no customers
who represented more than 10% of consolidated revenues. At December 31, 2002 and
2001, the combined balances of five customers represented 55% and 35% of
accounts receivable, net, respectively.

17.  Segment Reporting

          The Company has three reportable segments: software, strategic
consulting and corporate. Software comprises the licensing of the Company's
software products and the related implementation and maintenance services.
Strategic consulting provides assistance to regulatory entities in establishing
policies and provides energy market participants with professional advice
regarding where and how to compete in their respective markets. Beginning in the
third quarter of 2002 the Company ceased to operate its strategic consulting
business for energy market participants. The Company will continue to perform
consulting services under a few strategic consulting contracts for regulatory
agencies and the related personnel have been transferred to the software
services segment. Such consulting services are reported in the software services
segment beginning with the third quarter of 2002. Corporate includes general
overhead and administrative expenses not directly related to the operating
segments, including rent and facility costs. 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. In evaluating financial performance,
management uses earnings before interest and other income, income taxes,
amortization, depreciation and non-cash compensation expense ("Adjusted EBITDA")
as the measure of a segment's profit or loss.

          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 three reportable segments.


                                      F-22



<PAGE>

          The following tables illustrate the financial results of the
reportable segments:

<TABLE>
<CAPTION>
                                                 As of or Year Ended                          As of or Year Ended
                                                  December 31, 2002                            December 31, 2001
                                   ------------------------------------------   ------------------------------------------
                                   Software   Strategic   Corporate    Total    Software   Strategic   Corporate    Total
                                   --------   ---------   ---------   -------   --------   ---------   ---------   -------
<S>                                <C>          <C>        <C>        <C>         <C>       <C>         <C>        <C>
Revenues:
   License......................    29,714         --           --     29,714     34,579        --           --     34,579
   Software services............    50,874         --           --     50,874     32,416        --           --     32,416
   Strategic consulting.........       746      1,919           --      2,665         --     7,722           --      7,722
                                   -------      -----      -------    -------   --------    ------      -------    -------
      Total revenues............    81,334      1,919           --     83,253     66,995     7,722           --     74,717
Adjusted EBITDA.................    21,107       (842)     (24,726)    (4,461)    25,092     3,239      (14,513)    13,818
Non-cash compensation...........        --         --         (677)      (677)        --        --         (680)      (680)
Acquired IPR&D..................        --         --           --         --         --        --       (1,300)    (1,300)
Loss on office relocation.......        --         --           --         --         --        --           --         --
IPO-related expenses............        --         --           --         --         --        --           --         --
                                   -------      -----      -------    -------   --------    ------      -------    -------
        ........................    21,107       (842)     (25,403)    (5,138)    25,092     3,239      (16,493)    11,838
Amortization/depreciation.......   (10,094)        --       (3,164)   (13,258)   (13,953)     (691)      (2,013)   (16,657)
                                   -------      -----      -------    -------   --------    ------      -------    -------
Operating income (loss).........    11,013       (842)     (28,567)   (18,396)    11,139     2,548      (18,506)    (4,819)
Total assets....................   111,946         --       33,285    145,231    138,266    10,545       18,168    166,979

<CAPTION>
                                                  As of or Year Ended
                                                   December 31, 2000
                                   ------------------------------------------
                                   Software   Strategic   Corporate    Total
                                   --------   ---------   ---------   -------
<S>                                 <C>         <C>        <C>        <C>
Revenues:
   License......................    24,573          --          --     24,573
   Software services............    18,576          --          --     18,576
   Strategic consulting.........        --       8,565          --      8,565
                                   -------      ------     -------    -------
      Total revenues............    43,149       8,565          --     51,714
Adjusted EBITDA.................    15,018       4,666      (9,405)    10,279
Non-cash compensation...........        --          --        (167)      (167)
Acquired IPR&D..................        --          --          --         --
Loss on office relocation.......        --          --        (508)      (508)
IPO-related expenses............        --          --     (12,335)   (12,335)
                                   -------      ------     -------    -------
        ........................    15,018       4,666     (22,415)    (2,731)
Amortization/depreciation.......    (9,649)     (2,073)     (1,006)   (12,728)
                                   -------      ------     -------    -------
Operating income (loss).........     5,369       2,593     (23,421)   (15,459)
Total assets....................    64,798       8,295      30,952    104,045
</TABLE>

          Geographic information for the Company, for the years ended December
31, 2002, 2001 and 2000 is summarized in the table below.

<TABLE>
<CAPTION>
                                                           Year Ended December 31,
                                                         ---------------------------
                                                          2002      2001      2000
                                                         -------   -------   -------
<S>                                                      <C>       <C>       <C>
Revenues:
   United States .....................................   $69,469   $52,587   $30,733
   United Kingdom ....................................    13,784    22,130    20,981
                                                         -------   -------   -------
                                                         $83,253   $74,717   $51,714
                                                         =======   =======   =======
</TABLE>

<TABLE>
<CAPTION>
                                                               As of December 31,
                                                         ----------------------------
                                                          2002       2001      2000
                                                         -------   --------   -------
<S>                                                      <C>       <C>        <C>
Long-lived assets (includes all non-current
   assets):
   United States .....................................   $94,777   $ 99,261   $51,721
   United Kingdom ....................................       996      1,328     2,456
                                                         -------   --------   -------
                                                         $95,773   $100,589   $54,177
                                                         =======   ========   =======
</TABLE>

18.  Supplemental Cash Flow Information

<TABLE>
<CAPTION>
                                                          Year Ended December 31,
                                                         --------------------------
                                                           2002      2001     2000
                                                         -------   -------   ------
<S>                                                      <C>       <C>       <C>
Unrealized gain on available for sale securities .....   $    37   $    --   $  183
Reclassification of unrealized gain to realized
   gain on available for sale securities .............        --      (183)      --
Issuance (return) of equity in connection with the
   acquisition of Altra ..............................    (4,723)   33,891       --
Issuance of equity in connection with the
      acquisition of Nucleus .........................        --        --    3,757
Interest paid ........................................       522        --       27
Income taxes paid, net of income tax refunds .........       424     2,594    1,226
</TABLE>

19.  Restructuring Charges

          In the second quarter of 2002, the Company reduced the number
personnel and consolidated its European strategic consulting services operati
into one leased facility. The associated costs of $857 were reflected as a
restructuring charge consisting of $496 of severance costs, all of which were
paid in the second quarter of 2002, moving costs incurred and related asset
write-downs of $128 and $233 of lease commitment costs in excess of estimated
sublease rental income for a facility vacated by the Company. In the third
quarter of 2002, the Company further reduced its workforce and ceased a majority
of its strategic consulting operations, which included abandoning certain leased
facilities in the U.K and North America. The associated costs of $2,629 were
reflected as a restructuring charge consisting of $1,899 of severance costs, of
which $1,702 were paid in 2002, moving costs incurred and related asset
write-downs of $171 and $559 of lease abandonment costs.

20.  Quarterly Financial Data (unaudited)


                                      F-23



<PAGE>

          The following table sets forth certain quarterly financial information
for fiscal 2002:

<TABLE>
<CAPTION>
                                                                        Quarter Ended
                                                   ------------------------------------------------------
                                                   March 31,   June 30,   Sept. 30,   Dec. 31,
                                                     2002        2002       2002        2002      Total
                                                   ---------   --------   ---------   --------   --------
<S>                                                 <C>         <C>        <C>        <C>        <C>
Revenues........................................    $25,301     $18,774    $19,742    $19,436    $ 83,253
Gross profit....................................     14,688      10,345     12,350     13,448      50,831
Net loss........................................       (893)     (6,671)    (5,124)    (3,282)    (15,970)
Basic and diluted net (loss) per share..........      (0.05)      (0.34)     (0.29)     (0.19)      (0.88)
</TABLE>

          The following table sets forth certain quarterly financial information
for fiscal 2001:

<TABLE>
<CAPTION>
                                                                       Quarter Ended
                                                   -----------------------------------------------------
                                                   March 31,   June 30,   Sept. 30,   Dec. 31,
                                                     2001        2001       2001        2001      Total
                                                   ---------   --------   ---------   --------   -------
<S>                                                 <C>        <C>         <C>         <C>       <C>
Revenues........................................    $16,395    $17,738     $15,156     $25,428   $74,717
Gross profit....................................     10,425     12,120       9,137      17,840    49,522
Net income (loss)...............................     (2,423)      (947)     (3,125)        316    (6,179)
Basic and diluted net income (loss) per share...      (0.15)     (0.06)      (0.20)       0.02     (0.38)
</TABLE>

          The sum of the quarterly per share amounts do not always equal the
annual amount reported, as per share amounts are computed independently for each
quarter and for the twelve months based on the weighted average common and
common equivalent shares outstanding in each period.

21.  Subsequent Events

          SunGard Acquisition

          On January 20, 2003, the Company entered into an agreement for the
acquisition by SunGard Data Systems Inc. of all the shares of the Company for
$9.00 per share in cash. Pursuant to the Merger Agreement, a wholly owned
subsidiary of SunGard commenced a cash tender offer to acquire all of the
Company's outstanding shares at a price of $9.00 per share. The tender offer is
pending. Following successful completion of the tender offer, any remaining
shares of the Company will be cancelled and converted into the right to receive
the same price in a cash merger. The consummation of the transaction is subject
to customary conditions, including the tender of at least a majority of the
outstanding shares of the Company in the tender offer.

          Litigation (unaudited)

          On March 12, 2003 a complaint was filed in the U.S. District Court for
the Southern District of New York by Dennis Fasano, individually and on behalf
of others similarly situated, naming the Company, former executive officer David
Stoner, and current executive officers Joseph P. Dwyer and John A. Andrus as
defendants. On March 14, 2003, the Law Offices of Brian M. Felgoise, P.C. and
the Law Offices of Charles J. Piven, P.A. also announced the filing of similar
complaints in the U.S. District Court for the Southern District of New York. The
complaints allege that defendants violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by
making material misrepresentations and omissions in their public disclosures
between February 12, 2002 and July 8, 2002, thereby artificially inflating the
price of the Company's common stock. The complaints seek compensatory damages
and other relief. The Company believes the complaints are without merit and
intends to defend them vigorously. However, there can be no assurance that the
pending litigation, or any future similar litigation, will not have a material
adverse effect on the Company, whether due to the expense of defending the
litigation, any adverse judgment in the litigation, the devotion of management
time and resources to defending the litigation, and/or other similar factors.


                                      F-24



<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
No.                                Description
-------                            -----------
<S>       <C>
2.1       Merger Agreement among the Registrant, Caminus LLC and Caminus Merger
          LLC, dated December 17, 1999. (Incorporated herein by reference to the
          Registrant's Registration Statement on Form S-1 (File No. 333-88437))

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. (Incorporated herein by reference to the Registrant's
          Registration Statement on Form S-1 (File No. 333-88437))

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. (Incorporated herein by reference to the
          Registrant's Registration Statement on Form S-1 (File No. 333-88437))

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. (Incorporated herein by reference to the
          Registrant's Registration Statement on Form S-1 (File No. 333-88437))

2.5       Agreement of Merger by and between Caminus LLC and Zai*Net Software,
          L.P., dated February 26, 1999. (Incorporated herein by reference to
          the Registrant's Registration Statement on Form S-1 (File No.
          333-88437))

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. (Incorporated herein by reference to
          the Registrant's Registration Statement on Form S-1 (File No.
          333-88437))

2.7       Nucleus Purchase Agreement by and among the Registrant, Nucleus
          Corporation, Nucleus Energy Consulting Corporation, David C. Meyers,
          and John H. Gerold, dated August 30, 2000. (Incorporated herein by
          reference to the Registrant's Current Report on Form 8-K (File No.
          000-28085) dated August 30, 2000)

2.8       Stock Purchase Agreement, dated as of October 12, 2001, by and between
          the Registrant and Altra Energy Technologies, Inc. (Incorporated
          herein by reference to the Registrant's Current Report on Form 8-K
          (File No. 000-28085) dated November 20, 2001)

2.9       Registration Rights Agreement, dated as of November 20, 2001, by and
          between the Registrant and Altra Energy Technologies, Inc.
          (Incorporated herein by reference to the Registrant's Current Report
          on Form 8-K (File No. 000-28085) dated November 20, 2001)

2.10      Agreement and Plan of Merger, dated January 20, 2003, by and among
          SunGard Data Systems Inc., Rapid Resources Inc. and the Registrant
          (Incorporated herein by reference to the Registrant's Current Report
          on Form 8-K (File No. 000-28085) dated January 21, 2003)

2.11      Amendment No. 1 to Agreement and Plan of Merger, dated March 20, 2003,
          by and among SunGard Data Systems Inc., Rapid Resources Inc. and the
          Registrant (Incorporated herein by reference to Amendment No. 5 to
          Schedule TO (File No. 000-57767) filed by SunGard Data Systems Inc. on
          March 24, 2003)

3.1       Certificate of Incorporation of the Registrant. (Incorporated herein
          by reference to the Registrant's Registration Statement on Form S-1
          (File No. 333-88437))

3.2       Amended and Restated Bylaws of the Registrant. (Incorporated herein by
          reference to the Registrant's Annual Report on Form 10-K (File No.
          000-28085) for the year ended December 31, 2000)

4.1       Specimen certificate for shares of Common Stock, $0.01 par value per
          share, of the Registrant. (Incorporated herein by reference to the
          Registrant's Registration Statement on Form S-1 (File No. 333-88437))

10.1#     1998 Stock Incentive Plan. (Incorporated herein by reference to the
          Registrant's Registration Statement on Form S-1 (File No. 333-88437))
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
Exhibit
No.                                Description
-------                            -----------
<S>       <C>
10.14#    Service Agreement by and between Dr. Nigel L. Evans and Caminus Energy
          Limited, dated May 12, 1998. (Incorporated herein by reference to the
          Registrant's Registration Statement on Form S-1 (File No. 333-88437))

10.15#    Covenant Not to Compete by and among Dr. Nigel L. Evans, Dr. Michael
          B. Morrison and Caminus Energy Limited, dated May 12, 1998.
          (Incorporated herein by reference to the Registrant's Registration
          Statement on Form S-1 (File No. 333-88437))

10.16#    Amendment No. 1 to Employment Agreement between Dr. Nigel Evans and
          Caminus Limited, dated January 14, 2000. (Incorporated herein by
          reference to the Registrant's Registration Statement on Form S-1 (File
          No. 333-88437))

10.17#    Employment Agreement by and between Brian J. Scanlan and Zai*Net
          Software, L.P., dated May 12, 1998. (Incorporated herein by reference
          to the Registrant's Registration Statement on Form S-1 (File No.
          333-88437))

10.18#    Amendment No. 1 to Employment Agreement between Brian Scanlan and
          Caminus LLC, dated November 8, 1999. (Incorporated herein by reference
          to the Registrant's Registration Statement on Form S-1 (File No.
          333-88437))

10.19#    Covenant Not to Compete by and between Brian J. Scanlan and Zai*Net
          Software, L.P., dated May 12, 1998. (Incorporated herein by reference
          to the Registrant's Registration Statement on Form S-1 (File No.
          333-88437))

10.20     Agreement by and between Caminus LLC and GFI Two LLC, dated January
          21, 2000. (Incorporated herein by reference to the Registrant's
          Registration Statement on Form S-1 (File No. 333-88437))

10.21     Exchange Agreement between the Registrant and OCM Caminus Investment,
          Inc., dated January 21, 2000. (Incorporated herein by reference to the
          Registrant's Registration Statement on Form S-1 (File No. 333-88437))

10.22     Amendment to Limited Liability Company Agreement among Caminus LLC and
          certain members of Caminus LLC, dated January 19, 2000. (Incorporated
          herein by reference to the Registrant's Registration Statement on Form
          S-1 (File No. 333-88437))

10.23     Termination Agreement between the Registrant and David M. Stoner dated
          August 3, 2000. (Incorporated herein by reference to the Registrant's
          Quarterly Report on Form 10-Q (File No. 000-28085) for the fiscal
          quarter ended September 30, 2000)

10.24     Registration Rights Agreement, dated as of August 30, 2000, by and
          among the Registrant, Nucleus Corporation and Nucleus Energy
          Consulting Corporation. (Incorporated herein by reference to the
          Registrant's Current Report on Form 8-K (File No. 000-28085) dated
          August 30, 2000)

10.25     Escrow Agreement, dated as of August 30, 2000, by and among the
          Registrant, Nucleus Corporation, Nucleus Energy Consulting
          Corporation, David C. Meyers, John H. Gerold and State Street Bank and
          Trust Company of California N.A. (Incorporated herein by reference to
          the Registrant's Current Report on Form 8-K (File No. 000-28085) dated
          August 30, 2000)

10.26     Lease Agreement between the Registrant and Advance Magazine Publishers
          Inc. dated September 13, 2000. (Incorporated herein by reference to
          the Registrant's Quarterly Report on Form 10-Q (File No. 000-28085)
          for the fiscal quarter ended September 30, 2000)
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
Exhibit
No.                                Description
-------                            -----------
<S>       <C>
10.27     Escrow Agreement, dated as of November 20, 2001, by and among the
          Registrant, Altra Energy and JP Morgan Chase Bank, as escrow agent.
          (Incorporated herein by reference to the Registrant's Current Report
          on Form 8-K (File No. 000-28085) dated November 20, 2001)

10.28     Term Credit Agreement, dated as of November 20, 2001, by and between
          the Registrant and Blue Ridge Investments, LLC. (Incorporated herein
          by reference to the Registrant's Current Report on Form 8-K (File No.
          000-28085) dated November 20, 2001)

10.29#    Employment Agreement by and between William P. Lyons and Caminus
          Corporation, dated July 23, 2002

10.30#    Employment Letter between Caminus Corporation and Joseph P. Dwyer,
          dated April 10, 2001 (Incorporated herein by reference to the
          Registrant's Quarterly Report on Form 10-Q (File No. 000-28085) for
          the fiscal quarter ended June 30, 2001)

10.31#    Caminus Corporation Management Retention Plan by John A. Andrus and
          Joseph P. Dwyer, dated October 16, 2002.

10.32#    Amendment to Employment Agreements, dated January 20, 2003, by John A.
          Andrus, Joseph P. Dwyer and William P. Lyons.

21.1      Subsidiaries of the Registrant

23.1      Consent of KPMG LLP

99.1      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive
          Officer).

99.2      Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial
          Officer).

#         Management contract or compensatory plan or arrangement filed in
          response to Item 15(a)(3) of the instructions to Form 10-K.
</TABLE>


                         STATEMENT OF DIFFERENCES
                         ------------------------
The trademark symbol shall be expressed as.............................. 'TM'
The registered trademark symbol shall be expressed as................... 'r'
The section symbol shall be expressed as................................ 'SS'