Document:

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CAMINUS LLC

                                                                  Exhibit 10.54
Mark A. Herman                                                  January 26, 1999
115 E. 34th St., Apt. 11G
New York, New York 10016

Dear Mark:

I am very pleased to extend an offer to you to join CAMINUS LLC as Vice
President and Chief Financial Officer. In this strategic position you will
report directly to me. Mark, the management team is excited about having someone
of your caliber join us to help lead the company's marketing efforts. To this
end we have structured an attractive compensation package that consists of base
salary, incentive compensation, stock options, and benefits.

Salary
Your base salary will be $165,000 annually, paid according to the Company's
standard payroll policy.

Incentive Compensation
You will participate in the 1999 management bonus program. While the terms and
conditions for the plan are being finalized, you will receive the greater of the
bonus you earn under the terms of the plan or a guarantee of 30% of your 1999
compensation. Thereafter you will participate in the finalized management bonus
program.

Stock Options
Subject to the approval of the Board of Directors, you will be granted options
under the Caminus Incentive Stock Option (ISO) Plan of one half of one percent
of CAMINUS common stock at a strike price based on the Company's valuation when
you commence employment. Currently the Company is valued at $49,235,000. While
this valuation is not expected to change in the near term, it will be guaranteed
if you commence employment by February 22, 1999.

Under the terms of the plan your options will vest over a four year period as
follows: 25% on your first anniversary then on a pro rata monthly rate over the
next three years.

Other
If you are involuntary terminated for reasons other than cause during your first
two years of employment you will receive continuing base salary and benefits for
a period of one year. You also will become immediately vested in the greater of
twenty-five percent of your options or the then vested amount. Examples of
"cause" include committing a felony or a misdemeanor, or unethical or dishonest
behavior.

If you become subordinate to another Chief Financial Officer, and/or you are
relieved of the duties and responsibilities of the Chief Financial Officer, for
reasons other than your

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CAMINUS LLC
                                                                January 26, 1999

ability to perform to reasonable standards for the job, your options will
immediately become fully vested. If such a change is to take advantage of other
opportunities in the Company and is mutually agreed upon then vesting will not
be accelerated.

Benefits
I will send you under separate cover information on the Company's benefits
programs for your review. Should you have questions on these I will have a
benefits representative contact you.

Mark, as you know, this is a critical executive position in a fast growing,
results oriented company. I believe CAMINUS is an excellent opportunity for you
to leverage your experience and abilities as well as grow professionally.
Best regards,

/s/ David M. Stoner
David M. Stoner
Chief Executive Officer

Please indicate your acceptance of this offer by signing below and returning an
original copy of this letter.

  /s/ Mark A Herman
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Mark A. Herman

  1/26/99
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Date<PAGE>   1
                                                               Exhibit 10.4(vii)

                FIFTH AMENDMENT TO CREDIT AGREEMENT AND GUARANTY

                  FIFTH AMENDMENT TO CREDIT AGREEMENT AND GUARANTY dated as of
September 30, 1999 (the "Fifth Amendment") among HEALTH MANAGEMENT SYSTEMS, INC.
(the "Borrower"), ACCELERATED CLAIMS PROCESSING, INC. ("ACP"), QUALITY MEDI-CAL
ADJUDICATION, INCORPORATED ("QMA"), HEALTH CARE MICROSYSTEMS, INC. ("HCM"), CDR
ASSOCIATES INC. ("CDR"), HSA MANAGED CARE SYSTEMS, INC. ("HSA"), HEALTH
RECEIVABLES MANAGEMENT, INC. (formerly QUALITY STANDARDS IN MEDICINE, INC.)
("HRM") and THE CHASE MANHATTAN BANK (the "Bank").

                  PRELIMINARY STATEMENT. The Borrower, ACP, QMA, HCM, CDR and
the Bank have entered into a Credit Agreement and Guaranty dated as of July 15,
1996, as amended by First Amendment to Credit Agreement and Guaranty dated as of
September 9, 1996, the Second Amendment to Credit Agreement and Guaranty dated
as of April 16, 1997, the Third Amendment to Credit Agreement and Guaranty dated
as of June 30, 1997 and the Fourth Amendment to Credit Agreement and Guaranty
dated as of July 15, 1999 (as so amended and as it may be further amended,
supplemented or modified, the "Credit Agreement"). Any term used herein and not
otherwise defined herein shall have the meaning assigned to such term in the
Credit Agreement.

                  The Borrower, ACP, QMA, HCM, CDR, HSA, HRM and the Bank have
agreed to amend the Credit Agreement as hereinafter set forth.

                  SECTION 1. Amendment to Credit Agreement. The Credit Agreement
is, effective as of the date hereof and subject to the satisfaction of the
condition precedent set forth in Section 2 hereof, hereby amended as follows:

                  (a) The following definition shall be added in its proper
alphabetical order:

                  ""Fifth Amendment" means the Fifth Amendment to Credit
Agreement and Guaranty dated as of September 30, 1999 among the Borrower, each
of the Guarantors and the Bank.";

                  (b) The definition of "Revolving Credit Facility Termination
Date" is amended in full to read as follows:

                  ""Revolving Credit Facility Termination Date" means December
                  30, 1999."; and

                  (c) Section 9.02. Minimum Consolidated Tangible Net Worth, is
hereby amended by replacing "October 1998, January 1999, April 1999, July 1999"
with
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"October 1998, January 1999, April 1999, July 1999, October 1999".

                  SECTION 2. Conditions of Effectiveness. This Fifth Amendment
shall become effective as of the date on which each of the following conditions
shall have been fulfilled:

(a) the Borrower, ACP, QMA, HCM, CDR, HSA, HRM and the Bank shall each have
executed and delivered this Fifth Amendment; and

(b) the Bank shall have received a certificate signed by a duly authorized
officer of the Borrower dated the date hereof (a) certifying that no Default or
Event of Default has occurred and is continuing; and (b) with computations
demonstrating compliance with the covenants contained in Article IX of the
Credit Agreement.

                  SECTION 3. Reference to and Effect on the Loan Documents. (a)
Upon the effectiveness of Section 1 hereof, on and after the date hereof each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each reference in the other Loan Documents
to the Credit Agreement, shall mean and be a reference to the Credit Agreement
as amended hereby.

                  (b) Except as specifically amended above, the Credit Agreement
and all other Loan Documents shall remain in full force and effect and are
hereby ratified and confirmed.

                  (c) The execution, delivery and effectiveness of this Fifth
Amendment shall not operate as a waiver of any right, power or remedy of the
Bank under any of the Loan Documents, nor constitute a waiver of any provision
of any of the Loan Documents, and, except as specifically provided herein, the
Credit Agreement and each other Loan Document shall remain in full force and
effect and are hereby ratified and confirmed.

                  SECTION 4. Costs, Expenses and Taxes. The Borrower agrees to
reimburse the Bank on demand for all out-of-pocket costs, expenses and charges
(including, without limitation, all fees and charges of legal counsel for the
Bank) incurred by the Bank in connection with the preparation, reproduction,
execution and delivery of this Fifth Amendment and any other instruments and
documents to be delivered hereunder. In addition, the Borrower shall pay any and
all stamp and other taxes and fees payable or determined to be payable in
connection with the execution and delivery, filing or recording of this Fifth
Amendment and any other instruments and documents to be delivered hereunder, and
agrees to save the Bank harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
or fees.

                  SECTION 5. Governing Law. This Fifth Amendment shall be
governed by and construed in accordance with the laws of the State of New York.

                  SECTION 6. Headings. Section headings in this Fifth Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Fifth Amendment for any other purpose.

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                  SECTION 7. Counterparts. This Fifth Amendment may be executed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument, and any party hereto may execute this Fifth Amendment
by signing any such counterpart.

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                  IN WITNESS WHEREOF, the parties hereto have caused this Fifth
Amendment to be duly executed as of the day and year first above written.

                                   HEALTH MANAGEMENT SYSTEMS, INC.

                                   By
                                     --------------------------------
                                     Name:
                                     Title:

                                   ACCELERATED CLAIMS PROCESSING, INC.

                                   By
                                     --------------------------------
                                     Name:
                                     Title:

                                   QUALITY MEDI-CAL ADJUDICATION,
                                   INCORPORATED

                                   By
                                     --------------------------------
                                     Name:
                                     Title:

                                   HEALTH CARE MICROSYSTEMS, INC.

                                   By
                                     --------------------------------
                                     Name:
                                     Title:

                                   CDR ASSOCIATES, INC.

                                   By
                                     --------------------------------
                                     Name:
                                     Title:

                                       4
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                                   HSA MANAGED CARE SYSTEMS, INC.

                                   By
                                     --------------------------------
                                     Name:
                                     Title:

                                   QUALITY STANDARDS IN MEDICINE, INC.

                                   By
                                     --------------------------------
                                     Name:
                                     Title:

                                   THE CHASE MANHATTAN BANK

                                   By
                                     --------------------------------
                                     Name:
                                     Title:

                                       5

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