Document:

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                                                                    Exhibit 10.5

   Confidential materials omitted and filed separately with the Securities and
                 Exchange Commission. Asterisks denote omission.

April 10, 2001

Mr. Joseph P. Dwyer
3 Cordwood Court
East Northport, NY 11731

Dear Joe,

I am very pleased to extend you an offer to join Caminus Corporation as the
Chief Financial Officer and Senior Vice President, Finance and Administration,
reporting directly to me. You will be based in our New York headquarters. Please
contact me when you receive this information so that we may arrange for a
convenient start date. This letter shall confirm the terms and conditions of our
offer of employment to you.

1.    You will be compensated at the annualized base salary rate of $275,000 per
      year, to be paid at a semi-monthly rate of $11,458.33 per pay period.

2.    You will be eligible to participate in Caminus' 2001 Bonus Program as
      follows:

            -     You will earn and be paid a bonus of $125,000 if you achieve
                  100% of your bonus plan objective, which is defined as pro
                  forma EPS of $[**] per share for 2001.

            -     You will earn and be paid additional bonus compensation of up
                  to $25,000 if the Company achieves pro-forma EPS greater than
                  $[**] per share and up to $[**] per share for fiscal 2001.
                  This will be earned pro-rata from $[**] to $[**] per share.

            -     In addition to the foregoing, you will earn and be paid
                  additional bonus compensation of up to $31,250 if the Company
                  achieves pro-forma EPS of greater than $[**] per share and up
                  to $[**] per share for fiscal 2001 (which represents 125% of
                  your bonus plan objective of $[**]. This will be earned
                  pro-rata from $[**] to $[**] per share.

      Pro forma EPS is defined as fully diluted earnings per share, before
      amortization expense. The bonus under this paragraph shall be paid to you
      within 30 days following the completion of the Company's audited financial
      statements for the subject fiscal year. If your employment terminates
      prior to the end of the fiscal year, the bonus under this paragraph shall
      be paid on a pro-rata basis based upon the amount of time worked in
      relation to the full fiscal year. This shall have no impact whatsoever on
      the company's obligation to pay you the full guaranteed minimum bonus
      under paragraph 3 below.

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3.    You are guaranteed a minimum bonus potential of $125,000 at 100%
      achievement of your bonus plan objectives for 2001 and $150,000 for 2002.
      For each of 2001 and 2002, you will be guaranteed a minimum bonus of
      $62,500. Upon your commencement of employment, you will be paid the
      guaranteed minimum portion of your 2001 bonus. Your guaranteed minimum
      bonus for 2002 will be paid on January 2, 2002.

4.    You will be granted 160,000 options to purchase Caminus stock.  The
      strike price will be the closing price of Caminus common stock on the
      later of your first day of employment or the Board of Director's
      approval of your options scheduled for May 2, 2001.  These options are
      granted under the terms and conditions of the Caminus Incentive Stock
      Option Plan. Such options will become exercisable as to 25% of the
      original number of shares on the first anniversary of the grant date
      and as to 75% of the original number of shares in 36 equal monthly
      installments on the same day of the month as the grant date commencing
      in the 13th month following the grant date. The options granted to you
      will be ISO's to the maximum extent allowable by law.  The options
      shall be covered by an S-8 registration statement of the Company within
      12 months following the date of grant.

5.    In the event there is a Change of Control, as defined below, all options
      held by you will immediately vest and become exercisable. For purposes of
      this Letter Agreement, the term "Change of Control" means any person or
      entity, or group of persons and/or entities, other than the Company, or
      its original investors as outlined in the Caminus LLC Agreement, becomes a
      beneficial owner directly or indirectly of 50% or more of the voting power
      of the Company's then outstanding securities.

6.    If Caminus terminates your employment involuntarily and without
      "cause," or if you resign either for "Good Reason," as defined below,
      or within 3 months after a "Change in Control," as defined above, you
      will receive your base salary and any guaranteed portion of your bonus
      (paid according to the Company's standard payroll practices, as
      described above) and healthcare benefits for a period of one year after
      your termination date.  In addition, to the extent that you are
      terminated within the first year of your employment without cause or
      for Good Reason, the first 25% of your options will immediately vest
      and become exercisable.

      Events that would constitute termination for "cause" that will disqualify
      you from post-termination compensation are as defined in Exhibit A to this
      agreement.

      For purposes of this Agreement, "Good Reason" shall mean (i) your being
      asked to relocate and you choose not to do so, (ii) a failure by Caminus
      to maintain you in a management position substantially equivalent to that
      provided for in the opening paragraph of this letter, (iii) a material
      diminution by Caminus of your responsibilities which change would cause
      your position to become one of less responsibility, importance or scope,
      or (iv) a willful failure in bad faith to pay

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      your compensation when due or another material breach of the obligations
      of Caminus under this letter.

7.    You will be eligible to enroll in the Caminus Benefits Program, 401(k)
      Savings Plan and Stock Purchase Plan upon commencement of employment with
      Caminus.

8.    You will be entitled to 20 business days of paid time off (PTO) leave,
      prorated towards vacation and personal days. PTO is accrued monthly and
      may not be taken during the first 90 days of employment except with prior
      written approval of the CEO of the Company,

9.    You will be eligible for a performance evaluation and salary review per
      Company policy.

Joe, as we have discussed, this is a critical position in a fast growing,
results oriented Company. We believe Caminus is an excellent opportunity for you
to leverage your experience and abilities, as well as growing professionally.
Once again, welcome to Caminus-we look forward to having you join us soon.

Please feel free to call if you have any questions or need further information.

Sincerely,

/s/David M. Stoner
David M. Stoner
President and CEO
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Offer of Employment to Joseph P. Dwyer, dated April 10, 2001

This offer letter is not an employment contract and the terms listed should not
be interpreted as a guarantee of employment for any specific period of time.
Your employment with Caminus Corporation is at-will. The Company retains the
right to terminate your employment for any reason at any time, just as you have
the right to resign your employment at any time. You hereby acknowledge that you
have not relied upon any representations other than those set forth in this
letter.

Please indicate your acceptance of this offer by signing below and returning one
copy to me. By signing this letter, you also confirm that you are not subject to
any agreement, with a prior employer or otherwise, which would prohibit, limit
or otherwise be inconsistent with your employment at Caminus. Further, you agree
that you will not use or disclose any confidential or proprietary information or
intellectual property to any third party, including any previous or subsequent
employer.

Accepted and Agreed:

/s/Joseph P. Dwyer
---------------------------------
Mr. Joseph P. Dwyer

April 10, 2001
---------------------------------
Date
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                                    Exhibit A

Examples of "cause" which will disqualify you from post-termination compensation
include the following:

                  (i)   A willful breach of any of the material obligations you
                        assume under this Agreement which have not been cured
                        following 30 days written notice; or

                  (ii)  conviction of, or plea of nolo contendere to, criminal
                        charges (other than a traffic citation or minor
                        misdemeanor), or

                  (iii) material violation of the Company's policies, including,
                        by way of example, a violation of the Caminus voucher or
                        expense reimbursement rules, the Caminus harassment-free
                        workplace or equal employment opportunity policy, or
                        acts of dishonesty toward the Company.<PAGE>   1

                                                                    EXHIBIT 10.6

                               CAMINUS CORPORATION

                       NONSTATUTORY STOCK OPTION AGREEMENT

1.    Grant of Option.

      This agreement evidences the grant by Caminus Corporation, a Delaware
corporation (the "Company"), on May 7, 2001 (the "Grant Date") to Joseph P.
Dwyer, an employee of the Company (the "Participant"), of an option to purchase,
in whole or in part, on the terms provided herein, a total of 160,000 shares
(the "Shares") of common stock, $0.01 par value per share, of the Company
("Common Stock") at $24.71 per Share. Unless earlier terminated, this option
shall expire on May 7, 2011 (the "Final Exercise Date").

      This option is intended as an inducement essential for the Participant to
enter into his employment arrangement with the Company. It is intended that the
option evidenced by this agreement shall not be an incentive stock option as
defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the "Code"). Except as otherwise indicated
by the context, the term "Participant", as used in this option, shall be deemed
to include any person who acquires the right to exercise this option validly
under its terms.

2.    Vesting Schedule.

      Subject to Sections 3(f) and 7(c), this option will become exercisable
("vest") as to 25% of the original number of Shares on the first anniversary of
the Grant Date and as to 75% of the original number of Shares in 36 equal
successive monthly installments on the same day of the month as the Grant Date
commencing in the 13th month following the Grant Date.

      The right of exercise shall be cumulative so that to the extent the option
is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all shares for
which it is vested until the earlier of the Final Exercise Date or the
termination of this option under Section 3 hereof.

3.    Exercise of Option.

      (a) Form of Exercise. Each election to exercise this option shall be in
writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided herein. The Participant may purchase less than the number of shares
covered hereby, provided that no partial exercise of this option may be for any
fractional share or for fewer than ten whole shares.

      (b) Continuous Relationship with the Company Required. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Participant, at the time he exercises this option, is, and has been at all times
since the Grant Date, an employee, officer or
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director of, or consultant or advisor to, the Company or any parent or
subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an
"Eligible Participant").

      (c) Termination of Relationship with the Company. If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
30 days after such cessation (but in no event after the Final Exercise Date),
provided, that, except as provided in paragraph (f) below, this option shall be
exercisable only to the extent that the Participant was entitled to exercise
this option on the date of such cessation. Notwithstanding the foregoing, if the
Participant, prior to the Final Exercise Date, violates the non-competition or
confidentiality provisions of any employment contract, confidentiality and
nondisclosure agreement or other agreement between the Participant and the
Company, the right to exercise this option shall terminate immediately upon such
violation.

      (d) Exercise Period Upon Death or Disability. If the Participant dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Final Exercise Date while he is an Eligible Participant and the Company has
not terminated such relationship for "cause" as specified in paragraph (e)
below, this option shall be exercisable, within the period of six months
following the date of death or disability of the Participant, by the
Participant, provided, that, this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.

      (e) Discharge for Cause. If the Participant, prior to the Final Exercise
Date, is discharged by the Company for "cause" (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. "Cause" shall mean (i) a willful breach of any of the material
obligations the Participant assumed under the Offer Letter from the Company to
the Participant, dated April 10, 2001 (the "Offer Letter"), which breach has not
been cured following 30 days' written notice, (ii) a conviction of, or plea of
nolo contendere to, criminal charges (other than a traffic citation or minor
misdemeanor), or (iii) a material violation of the Company's policies,
including, by way of example, a violation of the Company's voucher or expense
reimbursement rules, the Company's harassment-free workplace or equal employment
opportunity policy, or acts of dishonesty toward the Company. The Participant
shall be considered to have been discharged for "cause" if the Company
reasonably determines, within 30 days after the Participant's resignation, that
discharge for cause was warranted.

      (f) Termination During First Year of Employment. If the Participant's
employment with the Company is terminated within the first year of his
employment (a) without cause (as defined above) by the Company or (b) for Good
Reason (as defined below) by the Participant, then 25% of the original number of
Shares, which originally would vest on the first anniversary of the Grant Date,
shall become immediately vested and exercisable in full. "Good Reason" shall
mean (i) the Participant chooses not to relocate upon the request of the
Company, (ii) a failure by the Company to maintain the Participant in a
management position substantially equivalent to that of Chief Financial Officer
and Senior Vice President, Finance and Administration, (iii) a material
diminution by the Company of the Participant's responsibilities, which change
would cause the Participant's position to become one of less responsibility,
importance or scope, (iv) a willful failure in bad faith by the Company to pay
the Participant's

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compensation when due, or (v) any other material breach of the obligations of
the Company under the Offer Letter.

4.    Withholding.

      No Shares will be issued pursuant to the exercise of this option unless
and until the Participant pays to the Company, or makes provision satisfactory
to the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.

5.    Nontransferability of Option.

      This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.

6.    Payment Upon Exercise.  Common Stock purchased upon the exercise of
this option shall be paid for as follows:

      (a) in cash or by check, payable to the order of the Company;

      (b) by (i) delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to pay
the exercise price or (ii) delivery by the Participant to the Company of a copy
of irrevocable and unconditional instructions to a creditworthy broker to
deliver promptly to the Company cash or a check sufficient to pay the exercise
price;

      (c) by delivery of shares of Common Stock owned by the Participant valued
at their fair market value as determined by (or in a manner approved by) the
Board in good faith ("Fair Market Value"), provided (i) such method of payment
is then permitted under applicable law and (ii) such Common Stock was owned by
the Participant at least six months prior to such delivery;

      (d) by (i) delivery of a promissory note of the Participant to the Company
on terms determined by the Board, or (ii) payment of such other lawful
consideration as the Board may determine; or

      (e)   by any combination of the above permitted forms of payment.

7.    Adjustments for Changes in Common Stock and Certain Other Events

      (a) Changes in Capitalization. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, the number and class of securities and exercise price per share
subject to this option shall be appropriately adjusted by the Company (or a
substitute option may be made, if applicable) to the extent the Board shall
determine, in good faith, that such an

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adjustment (or substitution) is necessary and appropriate. If this Section 7(a)
applies and Section 7(c) also applies to any event, Section 7(c) shall be
applicable to such event, and this Section 7(a) shall not be applicable.

      (b) Liquidation or Dissolution. In the event of a proposed liquidation or
dissolution of the Company, the Board shall upon written notice (including
electronic notice) to the Participant provide that any then unexercised portion
of this option will (i) become exercisable in full as of a specified time at
least 10 business days prior to the effective date of such liquidation or
dissolution and (ii) terminate effective upon such liquidation or dissolution,
except to the extent exercised before such effective date.

      (c) Change of Control Event

            (i) Definition. A "Change of Control Event" means the acquisition,
directly or indirectly, of "beneficial ownership" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
securities of the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities by any "person," as such term is
used in Sections 13(d) and 14(d) of the Exchange Act, other than the Company or
its original investors (as contemplated by the Company's Limited Liability
Company Agreement, dated as of May 12, 1998, as amended), any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, or
any entity owned directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of stock of the Company.

            (ii) Consequence of a Change of Control Event on this Option. Upon a
Change of Control Event, any then unvested portion of this option shall become
immediately vested and exercisable in full.

8.    Non-Competition

      (a) Non-Competition. As a condition to the grant of this option and the
issuance of shares of Common Stock issuable upon exercise of this option
(together with this option, "Securities") and as a means reasonably designed to
protect the intellectual property, confidential and proprietary information of
the Company, as long as the Participant owns Securities, the Participant will
not, without the prior written consent of the Company based upon approval from
the Board (or any successor entity of the Company), anywhere in the world,
directly or indirectly, engage in, assist (financially or otherwise), associate
with, or perform services (other than on behalf of the Company or any of its
affiliates) in the Company Business, including, without limitation, whether such
engagement, assistance, association or performance is as an individual,
principal, officer, director, proprietor, employee, partner, stockholder or
other investor (other than as a holder of less than five percent (5%) of the
outstanding capital stock of a publicly traded corporation), creditor,
guarantor, consultant, advisor, agent, sales representative or other
participant, or otherwise permit his name to be used or employed with any such
business. "Company Business" shall mean the business of the Company, including,
without limitation, the business of developing, licensing, installing and
maintaining commodities trading and risk management software and providing
consulting and support services substantially

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related to such software activities to the foreign exchange, natural gas, crude
oil, refined products and electric power industries.

      (b) Non-Interference. As long as the Participant owns Securities, the
Participant shall not, without the prior written consent of the Company,
directly, indirectly or as an agent on behalf of or in conjunction with any
person, firm, partnership, corporation or other entity, (i) hire, solicit,
encourage the resignation of, or in any other manner seek to engage or employ
any person who is then, or within the prior twelve (12) months has been, an
employee of the Company or its affiliates, whether or not for compensation and
whether as an officer, covenantor, consultant, advisor, independent sales
representative, independent contractor or participant, or (ii) except as may be
appropriate to perform the Participant's employment duties for the Company,
contact, solicit, service or otherwise have any dealings related to Company
Business with any person or entity with whom the Company or its affiliate has a
former, current or prospective business relationship or who is or was at any
time during his employment with the Company (including any predecessor or
successor entity) a customer or client of the Company or its affiliates, or a
prospective customer or client to which the Company or its affiliates has made a
written or oral business proposal.

      (c) Effect of Violation. In the event of a violation by the Participant of
the provisions of this Section 8, then this option shall be immediately null and
void and non-exercisable, and the Company shall have the right, at any time
after such event, to repurchase any shares of Common Stock issued in connection
with any option exercises ("Option Shares") owned by the Participant for an
amount equal to the lesser of (i) the Fair Market Value of the Option Shares
repurchased as of the date of such violation, and (ii) the price paid by the
Participant for such Option Shares.

9. No Rights To Employment. Nothing contained in this agreement shall be
construed as giving the Participant any right to be retained, in any position,
as an employee of the Company. The Participant acknowledges and agrees that the
vesting of this option pursuant to Section 2 hereof is earned only by continuing
service as an employee at the will of the Company (not through the act of being
hired or purchasing shares hereunder). The Participant further acknowledges and
agrees that the transactions contemplated hereunder and the vesting schedule set
forth herein do not constitute an express or implied promise of continued
engagement as an employee for the vesting period, for any period, or at all.

10.   Severability. The invalidity or unenforceability of any provision of
this agreement shall not affect the validity or enforceability of any other
provision of this agreement, and each other provision of this agreement shall
be severable and enforceable to the extent permitted by law.

11.   Waiver.  Any provision for the benefit of the Company contained in this
agreement may be waived, either generally or in any particular instance, by
the Board of Directors of the Company.

12. Binding Effect. This agreement shall be binding upon and inure to the
benefit of the Company and the Participant and their respective heirs,
executors, administrators, legal representatives, successors and assigns,
subject to the restrictions on transfer set forth in Section 5 of this
agreement.

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13. Notice. All notices required or permitted hereunder shall be in writing and
deemed effectively given upon personal delivery or five days after deposit in
the United States Post Office, by registered or certified mail, postage prepaid,
addressed to the other party hereto at the address shown beneath his or its
respective signature to this agreement, or at such other address or addresses as
either party shall designate to the other in accordance with this Section 13.

14. Pronouns. Whenever the context may require, any pronouns used in this
agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa.

15. Entire Agreement. This agreement constitutes the entire agreement between
the parties, and supersedes all prior agreements and understandings, relating to
the subject matter of this agreement.

16. Amendment. This agreement may be amended or modified only by a written
instrument executed by both the Company and the Participant.

17. Governing Law. This agreement shall be construed, interpreted and enforced
in accordance with the internal laws of the State of Delaware without regard to
any applicable conflicts of laws.

18. Acknowledgment and Agreement. The Participant acknowledges and agrees that
(i) Section 4 of the Offer Letter provides for the award of incentive stock
options under the Company's 1999 Stock Incentive Plan, as amended (the "1999
Plan"), (ii) this option is a nonstatutory stock option that is not subject to,
or awarded under, the 1999 Plan, and (iii) this option satisfies in full any and
all of the Company's obligations to award options to the Participant pursuant to
Section 4 of the Offer Letter. The Participant waives any rights to receive the
options described in Section 4 of the Offer Letter. The Company acknowledges and
agrees that, prior to the first anniversary of the Grant Date, it will register
the issuance of the Shares to the Participant on a Registration Statement on
Form S-8 (or any successor form thereto).

                  [Remainder of page intentionally left blank.]

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      IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.

                                    CAMINUS CORPORATION

Dated:    7/12/01                   By: /s/ David M. Stoner
                                        --------------------------------
                                        Name:
                                        Title:

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                            PARTICIPANT'S ACCEPTANCE

The undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof.

                                    PARTICIPANT:

                                    /s/ Joseph P. Dwyer
                                    -----------------------------------
                                    Print Name:  Joseph P. Dwyer

                                    Address:
                                            ------------------------
                                    --------------------------------

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