Group 1 Software Inc. of Lanham said yesterday that it will pay up to $10 million in cash for the assets of Sagent Technology Inc., a struggling California software firm. Under the terms of the deal, Group 1 has already lent $5 million to Sagent to keep the company afloat.

"They have a secured creditor," said Group 1 Chief Financial Officer Mark D. Funston. "They need to pay that creditor off, and we're going to step into that creditor's shoes."

With the approval of Group 1's board of directors, the company could loan Sagent an additional $2 million. The $10 million purchase price for the company would probably be accompanied by the forgiveness of those loans, Funston said.

Group 1 is buying just the assets of Sagent, instead of its public stock, to avoid liabilities that could accompany an outright purchase of the firm. Sagent is in default on $7 million in loans from CDC Software Corp. and subject to a number of shareholder lawsuits. Shares in Sagent closed yesterday at 12 cents, down 2 cents. The company has been trading below $1 for nearly a year.

"They're a distressed company," Funston said. "We want to structure this as safe a transaction as we can from a Group 1 standpoint. If we buy the stock, we buy everything known and unknown about the company. And we're concerned about the unknowns."

Shares in Group 1 rose 12 cents yesterday, to $15.78.

Group 1 is buying Sagent's two primary software products. One is a service for matching street addresses with geographic locations, similar to an existing Group 1 product. Another is software for moving information between databases.

"We're buying substantially all of [Sagent's] assets," Funston said.

The deal is expected to close within the next 120 days, with the approval of both Sagent and Group 1 shareholders.

Most of Sagent's 165 employees worldwide will probably find work at Group 1, Funston said, although those plans have not been worked out.

"We've bought a number of companies, and we tend to buy the companies and the people," he said.

Chief Financial Officer Mark Funston said Group 1 Software was cautious about its transaction with Sagent Technology.