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                                                                   EXHIBIT 10.24

                AGREEMENTS RELATING TO SALE OF ARCA SYSTEMS, INC.

                            ASSET PURCHASE AGREEMENT

       THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made as of October 2,
1998 (the "EFFECTIVE DATE"), by and between CyberGuard Corporation, a Florida
corporation ("CYBERGUARD"), Arca Systems, Inc., a California corporation and
wholly-owned subsidiary of CyberGuard ("ARCA," and, together with CyberGuard,
"SELLER"), Exodus Communications, Inc., a Delaware corporation ("EXODUS"), and
EC Acquisitions Corp., a Delaware corporation and wholly-owned subsidiary of
Exodus ("SUB," and together with Exodus, "BUYER").

                                 R E C I T A L S

       A. Arca is engaged in the business of network security consulting (such
business as engaged in by Arca is hereinafter referred to as the "BUSINESS").
CyberGuard also conducts, and after consummation of the Closing contemplated
under this Agreement will continue to conduct, lines of business other than the
Business.

       B. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, certain assets (including customer lists, technology, software products,
product designs, contracts and intellectual properties) of Arca related to the
Business, on the terms and conditions set forth in this Agreement, including but
not limited to assets related to Arca's facilities currently located in San
Jose, California; Vienna, Virginia; Columbia, Maryland; and Bedford,
Massachusetts (the "FACILITIES"). Such purchased assets are to be held by Sub.

       NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, Buyer and Seller hereby agree as follows:

1.     PURCHASE AND SALE OF ASSETS.

       1.1 AGREEMENT TO SELL AND PURCHASE ASSETS. Subject to the terms and
conditions of this Agreement, and in reliance on the representations, warranties
and covenants set forth in this Agreement, Seller agrees to sell, assign,
transfer and convey to Sub at the Closing (as defined in Section 2.3 below), and
Buyer agrees to purchase and acquire from Seller at the Closing, all right,
title and interest in and to all of the Assets (as defined below). The Assets
will be sold, assigned, transferred and conveyed to Buyer (subject to Section
1.3(b)) on the Closing Date (as hereinafter defined).

       1.2 ASSETS DEFINED. As used in this Agreement, the term "ASSETS" means,
collectively, all of the assets, rights and properties of Seller described in
the following paragraphs of this Section 1.2; PROVIDED, HOWEVER, that,
notwithstanding anything to the contrary set forth in this Agreement or any
agreement, document, schedule or exhibit relating hereto, "Assets" expressly
excludes any assets of CyberGuard (i) owned by CyberGuard before the Prior
Acquisition Date or (ii) which are owned by CyberGuard and are not related
primarily to the Business, in either case unless such assets are specifically
referenced and identified on the Schedules hereto.

                  (a) CUSTOMER LISTS, MARKETING INFORMATION. All of Seller's
customer lists (whether current or prior) and customer account histories for
customers or prospective customers of the Business (including, but not limited
to, customers and prospective customers of Seller's product lines and services
related to the Business), including all data regarding such customers, and all
other marketing, promotional and sales information, whether completed or in
process and whether stored in written form, magnetic or electronic media or in
any other form, that have been or now are related to the Business or that have
been or now are used, developed or purchased in connection with the Business.
Upon the Closing, Buyer shall





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acquire and have sole and exclusive ownership of, access to and use of all
assets, customer lists and other information described in this Section 1.2(a)
(collectively, the "CUSTOMER LIST ASSETS").

                  (b) INVENTORY. All inventories of Seller of tangible finished
products and marketing and product literature that are related to or used,
developed or purchased in connection with the Business and all work in process
and spare parts that have been marked for the Business (collectively, the
"INVENTORY").

                  (c) CONTRACTS. Subject to Section 1.3(b) hereof, all of the
contracts, agreements, engagements, leases and licenses relating to the Business
that are listed on SCHEDULE 1.2(C) hereto and all outstanding proposals for
contracts, agreements, engagements, leases and licenses related to the Business
that are listed on Schedule 1.2(c) (collectively, the "CONTRACTS"), together
with all claims, causes of action and rights of Seller now existing or hereafter
arising out of such Contracts or the performance thereof, all warranties and
representations made to Seller by third parties under such Contracts, and all
rights, remedies, setoffs, allowances, rebates, discounts and credits granted to
Seller by third parties in relation to such Contracts. Schedule 1.2(c) also
identifies the termination dates of the Contracts and those Contracts that
require third party consents to assign and transfer such Contracts to Buyer.

                  (d) TECHNOLOGY; PRODUCTS AND INTELLECTUAL PROPERTY. Subject to
Section 1.3(b) hereof, all copies of documentation, drafts, papers, designs,
drawings, schematics, diagrams, models, prototypes, software (in both source
code and object code form and in any media or format and for all hardware
platforms, software platforms and operating environments) including but not
limited to the software products and services listed in SCHEDULE 1.2(D)(I)
hereto that are related to or used, developed or purchased in connection with
the Business, all Seller's "shrinkwrap" or other use licenses or other rights to
use object code or executable code copies of third party personal computer
software (and the copies of such software) used or located at Seller's
Facilities or such other properties used to conduct the Business on the
Effective Date, computer stored data, diskettes, manuscripts and other items
describing any product, development tools, testing tool or suite, application,
operating system, routine, subroutine, module or other proprietary technology,
together with any derivative works made or developed therefrom, that are related
to or used, developed, sold, marketed or purchased in connection with the
Business and all of Seller's rights, title and interest in and to all
Intellectual Property (as defined in Section 5.8 below) that is related to or
used, developed or purchased in connection with the Business (such Intellectual
Property includes, but is not limited to, those items set forth in SCHEDULE
1.2(d)(ii) hereto).

                  (e) BUSINESS RECORDS. All logs, books, records, files,
supplier lists and files, product component lists, engineering and design
drawings, diagrams and other documentation depicting or specifying the designs
and components of all the Business products and services, and all sales
literature and sales aids, pictures, negatives, camera ready proofs, product
catalogs, product sheets and documentation, product displays, advertising
materials, manuals, computer and electronic data processing materials and
correspondence relating to the Business products, all copies of all sales and
customer records relating to the Business. In addition, Assets shall include
copies of all the Financial Records (as defined below); PROVIDED that Seller
shall retain title to and ownership of the Financial Records and may retain
copies of the Financial Records for Seller's use in compliance with this
Agreement. As used herein, the term "FINANCIAL RECORDS" means all Seller's
business, accounting and financial records and analyses pertaining to the
operation of the Business but not including those items included in the first
sentence of this Section 1.2(e).

                  (f) OTHER TANGIBLE ASSETS. All of the tangible assets and
tangible embodiments of intangible assets (including but not limited to personal
computers, furniture and equipment) not described in the preceding subparagraphs
of this Section 1.2 that, on the Effective Date, are located at the Facilities
or other locations, including, but not limited to, all such assets used in
support of the Business, exclusive of inventory, training documentation and
other materials not related to the Business (the "TANGIBLE ASSETS"). A list of
the Tangible Assets as of the Closing Date is listed on SCHEDULE 1.2(f) hereto.






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                  (g) TRADEMARKS; TRADE NAMES. All of the trademarks and trade
names used by the Business, including without limitation, the exclusive right to
use the names "Arca" and "Arca Systems", or any substantially similar name,
trademark or variant thereof, and the exclusive right for Buyer to hold itself
out as the successor to the Business.

                  (h) ACCOUNTS RECEIVABLE. The debts and other money which on or
before the Closing Date are or become owing to Arca in relation to products or
services sold or provided by the Seller in respect of the Business that are
listed on SCHEDULE 1.2(H) hereto.

                  (i) PERMITS, LICENSES AND OTHER ASSETS. Subject to Section
1.3(b) hereof, all governmental licenses, permits, filings, authorizations,
approvals or indicia of authority related to the Business or necessary for the
conduct of the business (the "PERMITS AND LICENSES"); and all other assets
listed on SCHEDULE 1.2(i) hereto.

       1.3        ASSET TRANSFER; PASSAGE OF TITLE; DELIVERY.

                  (a) TITLE PASSAGE. Except as otherwise provided in Section
1.3(b), upon the Closing, title to all of the Assets shall pass to the Buyer;
and the Seller shall deliver to the Buyer possession of all of the Assets as
provided in subsection 1.3(c), and shall further deliver to the Buyer proper
assignments, conveyances and bills of sale sufficient to convey to the Buyer
good and marketable title to all the Assets, as well as such other instruments
of conveyance as counsel for the Buyer may reasonably deem necessary or
desirable (both at and after the Closing) to effect or evidence the transfers
contemplated hereby;

                  (b) NON-TRANSFERABLE AND NON-ASSIGNABLE ASSETS. To the extent
that any of the Assets transferred to the Buyer hereunder, or any claim, right
or benefit arising under or resulting from such Assets (collectively, the
"RIGHTS") is not capable of being transferred without the approval, consent or
waiver of any third person, or if the transfer of a Right would constitute a
breach of any obligation under, or violation of, any applicable law unless the
approval, consent or waiver of such third person is obtained, then, except as
expressly otherwise provided in this Agreement and without limiting the rights
and remedies of the Buyer contained elsewhere in this Agreement, this Agreement
shall not constitute an agreement to transfer such Right unless and until such
approval, consent or waiver has been obtained (which approval, consent or waiver
shall be obtained at the Buyer's cost, which costs shall be subject to Buyer's
prior approval; provided, however, that costs of personnel (including legal
advisors) and other non-out-of-pocket costs incurred by Seller in seeking such
approvals, consents or waivers shall be at Seller's expense and not at Buyer's
cost). After the Effective Date and until all such Rights are transferred to
Buyer, the Seller shall use its reasonable efforts (to the extent permitted by
law and applicable contract terms) to:

                  (i)      maintain its existence and hold the Rights in trust
                           for the Buyer;

                  (ii)     comply in all material respects with the terms and
                           provisions of the Rights as agent for the Buyer at
                           the Buyer's cost and for the Buyer's benefit;

                  (iii)    cooperate with the Buyer at the expense of the Buyer
                           in any reasonable and lawful arrangements designed to
                           provide the benefits of such Rights solely and
                           exclusively to the Buyer;

                  (iv)     enforce, at the request of the Buyer and for the
                           account of the Buyer at the expense of the Buyer, any
                           rights of the Seller arising from such Rights against
                           any third person, including the right to elect to
                           terminate any such rights in accordance with the
                           terms of such rights upon the written direction of
                           the Buyer; and

                  (v)      not knowingly waive, alter or amend any obligations
                           of third parties, whether expressly or impliedly
                           without the written consent of the Buyer.






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                  In order that the full value of the Rights may be realized for
the benefit of the Buyer, the Seller shall, at Buyer's expense, at the request
and under the direction of the Buyer, in the name of the Seller or otherwise as
the Buyer may specify, take all such action and do or cause to be done all such
things as are reasonable, necessary, proper and prudent in order that the
obligations of the Seller under such Rights may be performed in such manner that
the value of such Rights is preserved and inures to the benefit of the Buyer,
and that any moneys due and payable and to become due and payable to the Buyer
in and under the rights are received by the Buyer. At the end of each calendar
month after the Closing Date, the Seller shall supply Buyer with written reports
regarding all moneys collected by or paid to the Seller in respect of every such
Right and shall promptly pay to the Buyer all such moneys collected.

                  With respect to the Contracts which will not have been
assigned to Buyer as of the Closing Date (the "UNASSIGNED CONTRACTS") listed on
SCHEDULE 1.3(b) hereto and which by their terms require Seller to perform
consulting services thereunder (the "UNASSIGNED SERVICES CONTRACTS"), to the
extent permitted by law and the terms of the Unassigned Services Contracts,
Seller hereby hires and authorizes Buyer to perform the services specified in
such Unassigned Services Contracts, on Seller's behalf, pursuant to the terms of
such Unassigned Services Contracts, and Buyer hereby agrees to use its
reasonable efforts to perform such services in accordance with the terms of the
Unassigned Services Contracts. Buyer also agrees to use its reasonable efforts
to comply with the terms of the Unassigned Contracts to the extent that such
compliance is within the control of Buyer. In addition, Seller hereby authorizes
and directs Buyer to collect payment for services rendered pursuant to the
Unassigned Services Contracts for Buyer's own account. Buyer's obligation to
perform such services pursuant to an Unassigned Services Contract shall
terminate upon the valid assignment of such Unassigned Services Contract to
Buyer; provided, however, that Buyer shall have the right to terminate its
obligations under this paragraph to perform services under the Unassigned
Services Contracts in the event that (i) payment for such services has been
remitted to Seller by the other party to the contract and Buyer has not received
from Seller the amounts due to it for such services for a period in excess of 60
days following Seller's receipt of the payment and (ii) Buyer has notified
Seller of its intention to terminate its obligations to perform such services
hereunder as a result of such nonpayment, and a period of 10 days has passed
since such notification, in which time Seller has not paid Buyer such past due
payments.

                  Buyer shall indemnify and hold Seller harmless for any costs,
damages, liabilities, expenses or obligations incurred by Seller (the "COSTS")
in connection with the Unassigned Contracts and with respect to any Rights which
have not been assigned as described above, to the extent that such Costs are due
to any acts or the failure to act by Buyer under this Section 1.3(b), following
the date hereof and until such Unassigned Contracts or Rights are assigned to
Buyer, including the performance of, or the failure to perform, the services
required to be performed by Buyer under the Unassigned Services Contracts
pursuant to the preceding paragraph. Buyer shall use its best efforts to obtain
all consents with respect to Rights, Unassigned Contracts and Unassigned
Services Contracts necessary to assign such Rights, Unassigned Contracts and
Unassigned Services Contracts to Buyer, including, where reasonably necessary or
advisable, causing Exodus to guarantee any obligations of Sub with respect
thereto.

                  Notwithstanding anything to the contrary set forth herein and
except as provided below in this Section 1.3(b), so long as Seller provides
cooperation to Buyer (as described in this Section 1.3(b) and in Section 7.1) in
obtaining the approval, consent or waiver of any third person to the assignment
to Buyer of the Unassigned Contracts and Rights, Seller shall not be liable to
Buyer if any such consents are not obtained. Buyer shall indemnify and hold
Seller harmless for any Costs incurred by Seller in connection with the
Unassigned Contracts or with respect to any Rights which have not been assigned
as described above, to the extent that such Costs are due to the violation as a
result of the transactions contemplated by this Agreement of (i) any "change of
control" provisions or (ii) any provisions requiring the consent of a third
party to assign the Unassigned Contracts or Rights to Buyer, that are contained
in the Unassigned Contracts or included within such Rights, as long as Seller
has not breached this Section 1.3(b) or Section 7.1 of this Agreement; provided,
however, that the foregoing indemnification obligations shall not have any force
or effect until Seller has incurred, and paid, an aggregate of $150,000 of Costs
associated with such





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violations, and then such indemnification obligation shall be effective only
with respect to any such Costs which exceed such $150,000 amount.

                  (c) DELIVERY OF ASSETS. The Assets shall be delivered by
Seller to Buyer as follows, and all Assets shall be delivered by Seller to Buyer
on the Closing Date:

                           (i) All of the original Customer List Assets and all
of the original software products, documentation and other assets described in
Section 1.2(d) and Section 1.2(e) and all of the Inventory and Tangible Assets
shall be delivered to Buyer by Seller at the Facilities; and

                           (ii) All other Assets shall be delivered to Buyer by
Seller at such location as Buyer may reasonably request in writing; PROVIDED,
HOWEVER, that if such location is other than at the location at which such
Assets are located on the Effective Date, then Buyer shall promptly reimburse
Seller for all shipping expenses Seller incurs in delivering such Assets to
Buyer at the location specified by Buyer.

2.     PURCHASE PRICE; PAYMENT.

       2.1 PURCHASE PRICE. In consideration of the sale, transfer, conveyance
and assignment of all the Assets to Buyer at the Closing, upon the consummation
of the Closing, Buyer agrees to pay or transfer, as appropriate, to Seller the
following, the aggregate total of which shall be defined as the "PURCHASE
PRICE":

                  (a) the sum of Three Million Two Hundred Fifty-Eight Thousand
Four Hundred and Seventy Dollars ($3,258,470) in cash (which includes Five
Hundred Thousand Dollars ($500,000) in cash already delivered by the Buyer to
the Seller on or about September 2, 1998). Of the Purchase Price, Two Hundred
Fifty Eight Thousand Dollars ($258,000) shall be withheld in escrow (the "ESCROW
FUNDS") for a period of time not to exceed one (1) year pursuant to an escrow
agreement attached hereto as EXHIBIT A (the "ESCROW AGREEMENT") until required
to be delivered pursuant to Sections 9.3 hereof;

                  (b) the sum of One Hundred Sixty-Five Thousand Six Hundred
Nineteen Dollars ($165,619.00) in cash which represents the aggregate amount to
be paid by the Seller immediately after the Closing Date to satisfy all of its
accounts payable known by Seller to exist, which amounts and the parties to whom
they are owed are listed on Schedule 7.3 hereto (the "ACCOUNTS PAYABLE"); and

                  (c) all of the "TRANSFERRED INTERESTS AND ASSETS" (as that
term is defined in the Claims and Stock Purchase Agreements of even date
herewith to which the Buyer and the persons listed on Schedule 2.1 are parties
(the "CLAIMS AND STOCK PURCHASE AGREEMENT")) which have been assigned or
otherwise transferred to Buyer under such Claims and Stock Purchase Agreements.

       2.2 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
to the Assets in the manner to be set forth on SCHEDULE 2.2, which shall be
completed by Buyer and consented to by Seller (which consent shall not be
unreasonably withheld) as soon thereafter as is reasonably practicable. When
final, Schedule 2.2 will be attached to this Agreement and form a part hereof.
Each party agrees not to take any position that varies from or is inconsistent
with such allocation in any tax return or other filing made by such party with
the Internal Revenue Service ("IRS") or with any other governmental, tax or
regulatory authority. Nothing herein contained shall impose on either party the
duty or obligation to contest any action which the IRS or any other taxing
authority may take or any adjustment or change in such allocation which the IRS
or any other taxing authority may make or propose.

       2.3 CLOSING. The consummation of the purchase and sale of the Assets
contemplated hereby is taking place at a closing to be held simultaneously with
the execution of this Agreement at the offices of Buyer's counsel, Fenwick &
West LLP, Two Palo Alto Square, Palo Alto, California (the "CLOSING") on October
2, 1998 (such date being the "CLOSING DATE" or "EFFECTIVE DATE").



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3.     OBLIGATIONS ASSUMED.

       3.1 LIABILITIES. Buyer agrees, upon consummation of, and effective as of,
the Closing, to assume those (and only those) obligations of Seller arising
after the Closing under those (and only those) Contracts specifically listed in
Schedule 1.2(c) (and to discharge the same in accordance with their terms),
OTHER THAN obligations arising from any breach or default of any of such
Contracts by Seller that occurred (or arose from facts occurring) prior to the
Closing (collectively, the "ASSUMED LIABILITIES").

       3.2 LIABILITIES AND OBLIGATIONS NOT ASSUMED. Except as expressly set
forth in Section 3.1 above, the Buyer shall not assume or become obligated in
any way to pay any liabilities, debts or obligations of Seller or of the
Business whatsoever, including but not limited to any liabilities or obligations
now or hereafter arising from or with respect to, (i) the sale or license of any
products or services of Seller that occurred prior to the Closing, (ii) the
termination by Seller of the employment of any current or future employees of
Seller or any of its affiliates, any other claims brought against Seller arising
from Seller's employment of any person, any duties or obligations under any
existing or future Employee Plans (as term is defined in Section 5.14) or other
employee benefit plans of Seller or any of its affiliates, whether or not under
the Employee Retirement Income Security Act of 1974 ("ERISA"), any present or
future obligations or liabilities of Seller or any of its affiliates to existing
or future employees of Seller or any of its affiliates under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), the Federal
Worker Adjustment and Retraining Act ("WARN") or any severance pay obligations
of Seller or any of its affiliates (together, "EMPLOYEE LIABILITIES") or (iii)
any obligations or liabilities arising from any breach or default by Seller of
any contract, agreement or commitment of Seller (including but not limited to
the Contracts) that occurred prior to the Closing. All liabilities, debts and
obligations of Seller not expressly assumed by Buyer hereunder are hereinafter
referred to as the "EXCLUDED LIABILITIES".

       3.3 NO OBLIGATIONS TO THIRD PARTIES. The execution and delivery of this
Agreement shall not be deemed to confer any rights upon any person or entity
other than the parties hereto, or make any person or entity a third party
beneficiary of this Agreement, or to obligate the parties to any person or
entity other than the parties to this Agreement. Assumption by Buyer of any
liabilities or obligations of Seller under Section 3.1 shall in no way expand
the rights or remedies of third parties against Buyer as compared to the rights
and remedies such parties would have against Seller if the Closing were not
consummated.

4.     REPRESENTATIONS AND WARRANTIES OF BUYER.

       Buyer hereby represents and warrants to Seller that all the following
statements are true, accurate and correct:

       4.1 CORPORATE ORGANIZATION. Each of Exodus and Sub is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware. Each Buyer has all necessary corporate power and authority to enter
into this Agreement and all assignments or other documents that the Buyer is
required to execute and deliver hereunder (the "ANCILLARY DOCUMENTS"), and holds
all permits, licenses, orders and approvals of all federal, state and local
governmental or regulatory bodies necessary and required therefor.

       4.2 POWER AND AUTHORITY; NO DEFAULT. The execution, delivery and
performance by Buyer of this Agreement and the Ancillary Documents, and the
consummation of all the transactions contemplated hereby and thereby, have been
duly and validly authorized by the Buyer by all necessary corporate action of
each Buyer's Boards of Directors. This Agreement and the Ancillary Documents,
when executed and delivered by the Buyer, will be duly and validly executed and
delivered and will be the valid and binding obligations of the Buyer,
enforceable against Buyer in accordance with their respective terms, except as
the same may be limited by applicable bankruptcy, moratorium, fraudulent
conveyance and other laws affecting creditors and general principles or equity.
Neither the execution and delivery of this Agreement or the Ancillary Documents
by the Buyer, nor the performance by the Buyer of its obligations under this






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Agreement, will (i) violate the Buyer's Certificate of Incorporation or Bylaws,
(ii) to the Buyer's knowledge, materially violate any law, statute, rule or
regulation or order, writ, judgment, injunction or decree of any court,
administrative agency or government body applicable to the Buyer.

       4.3 BROKERAGE AND FINDER'S FEES. Except for employing the services of
NationsBanc Montgomery Securities LLC, neither Buyer nor any of its affiliates
has employed any broker, finder or agent, or agreed to pay or incurred any
brokerage fee, finder's fee or commission with respect to the transactions
contemplated by this Agreement, or dealt with anyone purporting to act in the
capacity of a broker, finder or agent with respect thereto as a result of which
any claim for a fee can be asserted against Seller.

       4.4 AUTHORIZATION FOR THIS AGREEMENT. No authorization, approval, consent
of, or filing with any governmental department, bureau, agency, public board,
authority or other third party is required for the consummation by the Buyer of
the transactions contemplated by this Agreement.

       4.5 TRANSFERRED INTERESTS AND ASSETS. To the Buyer's knowledge, and based
solely on the representations and warranties of the parties (other than the
Buyer) to the Claims and Stock Purchase Agreement, the Transferred Interests and
Assets are being transferred to the Seller free and clear of all mortgages,
claims, pledges, liens, licenses, rights of possession, security interests,
restrictions, encumbrances, charges, title retention, conditional sale or other
security arrangements and all other claims or agreements of any nature
whatsoever ("ENCUMBRANCES"), except as otherwise provided in the Claims and
Stock Purchase Agreement; and the Buyer has not granted any Encumbrance upon or
transferred any right, title or interest in or to, any Transferred Interests or
Assets.

       4.6 NON-RELIANCE. In entering into this Agreement, the Buyer has not
relied upon any oral representations or warranties, or any projections, with
respect to the Business.

       4.7 BUYER'S KNOWLEDGE. The Buyer is not aware of any breach by the Seller
of any representation, warranty, covenant or agreement made herein or in
connection herewith.

       4.8 EMPLOYEES. The Buyer has no present intent to terminate any employees
of Arca listed on Schedule 5.16 hereto, all of which are being offered
employment by the Buyer immediately following the Closing.




















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5.     REPRESENTATIONS AND WARRANTIES OF SELLER.

       Each of CyberGuard and Arca, jointly and severally, represents and
warrants to Buyer that, except as set forth in SCHEDULE 5 attached hereto (the
"SELLER'S SCHEDULE OF EXCEPTIONS"), all of the statements in this Section 5 are
true, accurate and correct:

       5.1 CORPORATE ORGANIZATION. CyberGuard is a corporation duly organized,
validly existing, and in good standing under the laws of the state of Florida.
CyberGuard owns all of the capital stock of Arca. Arca is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
California. Each of CyberGuard and Arca is duly qualified to transact business
as a foreign corporation, and is in good standing, in all jurisdictions where
the failure to be so qualified would materially and adversely affect the
Business. Each Seller has all necessary corporate power and authority to own and
use the Assets and to operate the Business and to enter into this Agreement and
all assignments or other documents that each Seller is required to execute and
deliver hereunder (the "ANCILLARY DOCUMENTS"), and each Seller holds all
permits, licenses, orders and approvals of all federal, state and local
governmental or regulatory bodies necessary and required therefor. Each Seller
has delivered true and correct copies of its Articles of Incorporation and
By-laws, as in effect on the date hereof. Arca has no interest in any
corporation, partnership or other entity except as set forth in Schedule 5
hereto.

       5.2 POWER AND AUTHORITY; NO DEFAULT UPON TRANSFER. The execution,
delivery and performance by each Seller of this Agreement and the Ancillary
Documents, and the consummation of all the transactions contemplated hereby and
thereby, have been duly and validly authorized by Seller by all necessary
corporate action of each Seller's Board of Directors. This Agreement and the
Ancillary Documents, when executed and delivered by Seller, will be duly and
validly executed and delivered and will be the valid and binding obligations of
each Seller, enforceable against Seller in accordance with their respective
terms, except as the same may be limited by applicable bankruptcy, moratorium,
fraudulent conveyance and other laws affecting creditors and general principles
or equity. Neither the execution and delivery of this Agreement or the Ancillary
Documents by the Seller, nor the performance by Seller of its obligations under
this Agreement, will (i) violate the Seller's Articles of Incorporation or
By-Laws, (ii) result in a material violation or breach of, or permit any third
party to rescind any term or provision of, or constitute a default under, any
loan, note, indenture, mortgage, deed of trust, security agreement, lease or
material contract, Contract, license, lease or other agreement to which Seller
is a party or by which Seller or any of the Assets is bound or (iii) to the
Seller's knowledge, materially violate any law, statute, rule or regulation or
order, writ, judgment, injunction or decree of any court, administrative agency
or government body applicable to the Seller or the Business.

       5.3 TITLE. Except as set forth on SCHEDULE 5, Seller has good and
marketable title to all of the Assets, free and clear of all Encumbrances. Title
to all the Assets is freely transferable from the Seller to the Buyer without
obtaining the consent or approval of any person or party, except such consents
and approvals as will be obtained by the Seller prior to the Closing or those
consents otherwise identified in the Schedules as required in connection with
the transactions contemplated hereunder. Except for the "shrinkwrap" or other
use licenses or other rights to use object code or executable code copies of
third party personal computer software programs (and the copies of such
software) that are used or located on the Effective Date at a location other
than the Facilities, the Assets include all of the intangible assets used in the
Business to use, create, enhance and modify the software programs set forth on
Schedule 1.2(d)(i) and all information (including but not limited to identities)
that the Seller possesses on the Closing Date regarding the customers of the
Business.

       5.4 FINANCIAL STATEMENTS. Attached hereto as SCHEDULE 5.4 is (i) an
unaudited balance sheet of Arca as of August 31, 1998 and (ii) an unaudited
income statement of Arca covering the period from July 1, 1998 to August 31,
1998. The foregoing financial statements (i) are, in all material respects, in
accordance with the books and records of Seller, (ii) are true, correct and
complete and present fairly in all material respects the financial condition of
Arca and the Business at the date or dates therein indicated and the results of
operations for the period or periods therein specified, and (iii) have been
prepared in





                                      -9-
<PAGE>   9

accordance with generally accepted accounting principles consistently applied
("GAAP"), except that the above-referenced unaudited financial statements do not
include notes or statements of cash flows required by GAAP and are subject to
year-end audit adjustments. Also included in Schedule 5.4 is a listing of all
debts, liabilities and obligations of Arca and the Business of any nature,
whether due or to become due (including without limitation absolute liabilities,
accrued liabilities and contingent liabilities) as of the Closing Date.

       5.5 CONDITION OF ASSETS. Taken as a whole, all of the tangible personal
property included in the Assets are in good working condition and repair,
ordinary wear and tear excepted.

       5.6 LITIGATION. Except as set forth on Schedule 5.6, there is no claim,
action, suit or proceeding pending or, to Seller's knowledge, threatened,
against Seller (including but not limited to any claim, action, suit or
proceeding relating to or affecting the Business or the Assets), at law, in
equity, by way of arbitration or before any governmental department, commission,
board or agency that could reasonably be expected to have a material adverse
effect on the Seller or the Business, nor is Seller aware of any reasonable
basis therefor. There are no judgments, decrees, injunctions or orders of any
court, governmental department, commission, agency, instrumentality or
arbitrator against Seller affecting the Assets or the Business.

       5.7 CONTRACTS AND COMMITMENTS. SCHEDULE 5.7 attached hereto sets forth a
description of all contracts, agreements, understandings and commitments of
Seller related to the Business, whether written or oral (other than oral
agreements to employ employees of Seller): (i) that involve the payment by any
party thereto of consideration in an aggregate amount of $50,000 or more during
any year; (ii) under which performance must or is scheduled to extend beyond six
(6) months after the Closing Date; (iii) that involve the lending or borrowing
of money or any guarantees by Arca or the payment of indebtedness or performance
of an obligation of any third party in excess of $10,000; (iv) that involve
transactions not in the ordinary course of the Business; (v) that involve the
lease or purchase of real estate; or (vi) that involve the purchase or license
of any Intellectual Property (as defined in Section 5.8 below). The Seller is
not in violation, breach or default of any of the Contracts or any other
contracts, agreements or understandings required to be listed on Schedule 5.7 or
that are listed on Schedule 1.2(c). Arca has delivered to the Buyer a true and
correct copy of each written Contract included in the Assets and listed on
Schedule 1.2(c) and has obtained, or by Closing will obtain, all written
consents of third parties required to assign and transfer all Contracts to Buyer
without the breach or violation of any such Contract, except as set forth on
Schedule 5.7. Seller also represents and warrants that the Contracts listed on
Schedule 1.2(c) as requiring third party consents to assign and transfer such
Contracts to Buyer are the only Contracts requiring such consents for
assignment.

       5.8 INTELLECTUAL PROPERTY. The term "INTELLECTUAL PROPERTY" means and
includes, collectively, the worldwide rights to all patents, patent applications
(including but not limited to continuations, continuations-in-part, divisionals
and reissues), trademarks (whether or not registered), trade names, service
marks (whether or not registered), copyrights (whether or not registered), moral
rights, trademark and service mark registrations (and pending applications
therefor), mask works and mask work registrations, computer software in object
and source code form (whether owned by Seller, or authored or developed for
Seller by any of its employees, contractors or agents), licenses, sublicenses,
and franchise agreements of Seller, and all know-how, formulae, recipes,
compositions by matter, processes, techniques, confidential business
information, designs, patterns, shapes, inventions (whether or not patented or
patentable), trade secrets, and other proprietary information (including without
limitation customer lists) and technology owned by or licensed to Seller that is
related to the Business. Schedule 1.2(d)(i) contains a true and accurate list of
all products and services currently offered as part of the Business and Schedule
1.2(d)(ii) sets forth a true and accurate list of all Intellectual Property
referred to in Section 1.2(d). Seller owns, possesses, has the exclusive right
to make, use, sell and license, has the right to bring actions for the
infringement of, and where necessary, has made timely and proper application
for, all Intellectual Property rights that are used in the Business and that are
not Excluded Assets or that comprise the Assets. Seller has not granted any
third party any outstanding licenses or other rights to any of its Intellectual
Property and




                                      -10-
<PAGE>   10

Seller is not liable, nor has it made any contract or arrangement whereby it may
become liable, to any person for any royalty or other compensation for the use
of any Intellectual Property. Seller has not received notice of any claim that
any Intellectual Property infringes any patent, copyright, moral right, mask
work, trade secret or proprietary right of any third party and there is no
reasonable basis for such claim known to Seller. All employees and consultants
of Seller and any other third parties who have been involved in providing
services for the Business have executed invention assignment agreements and all
employees and consultants who have access to confidential or trade secret
information concerning technology or products related to the Business have
executed nondisclosure agreements.

       5.9 BROKERAGE AND FINDER'S FEES. Except for employing the services of
Goldblum Lentz & Co., neither Seller nor any of its affiliates has employed any
broker, finder or agent, or agreed to pay or incurred any brokerage fee,
finder's fee or commission with respect to the transactions contemplated by this
Agreement, or dealt with anyone purporting to act in the capacity of a broker,
finder or agent with respect thereto as a result of which any claim for a fee
can be asserted against Buyer.

       5.10 COMPLIANCE WITH LAWS. In the operation of the Business, to Seller's
knowledge, Seller has duly complied with all applicable laws, rules, regulations
and orders of federal, state, local and foreign governments (including but not
limited to all export control laws and regulations of the United States of
America or any governmental, authority or agency of the United States
government), except where the failure to comply would not have a materially
adverse effect on the Assets or the Business, and, to Seller's knowledge, Seller
is not in default with respect to any order, judgment, writ, injunction, decree,
award, rule or regulation of any court, governmental or regulatory body or
arbitrator which restrains or limits the operations of the Business or the use
of the Assets.

       5.11 LABOR AND EMPLOYEE RELATIONS. There are no agreements between any
union, labor organization or other collective bargaining agent in respect of any
employee of Seller.

       5.12 AUTHORIZATION FOR THIS AGREEMENT. Except as set forth on Schedule
1.2(c) hereto, no authorization, approval, consent of, or filing with any
governmental department, bureau, agency, public board, authority or other third
party is required for the consummation by Seller of the transactions
contemplated by this Agreement.

       5.13 TAXES. At the Closing, and upon the date of any subsequent transfer
of Assets to Buyer in accordance with this Agreement, there will be no federal,
state or local tax liens against any of the Assets to be transferred to Buyer
hereunder, except for taxes which are not yet due and payable. Seller has paid
or will pay, when due, any federal, state or local taxes attributable to periods
prior to the Effective Date with respect to the Assets or the Business which, if
unpaid, may result in a lien against any of the Assets.

       5.14 EMPLOYEE BENEFIT PLANS. Set forth on Schedule 5 is a list of all
pension, retirement, profit sharing, deferred compensation agreements,
severance, stock, stock options, bonus or other incentive plans or other
employee benefit plans or other employee benefit plans or arrangements
maintained by Seller for the employees of the Arca including all "Employee
Benefit Plans" as defined in Section 3(3) of ERISA (collectively, the "EMPLOYEE
PLANS"). With respect to all "Employee Plans" as defined in ERISA in which any
employee of Arca is or was eligible to participate in, the Seller or any entity
which, within the last 5 years, has been under common control of or affiliated
with the Seller (an "ERISA AFFILIATE") within the meaning of Section 414(b), (c)
or (m) of the Code, is in material compliance with the requirements prescribed
by any and all statutes, orders or governmental rules or regulations currently
in effect, including, but not limited to, ERISA and the Code, applicable to such
Employee Plans and the Seller is in material compliance with its obligations
under the terms of such plans. None of the Employee Plans maintained by the
Seller or its ERISA Affiliates are subject to Title IV of ERISA. Neither the
Seller nor any ERISA Affiliate has ever been obligated to contribute to any
"multi-employer plan" as such term is defined in Section III(37) of ERISA. To
Seller's knowledge, no Employee Plan of the Seller or any ERISA Affiliate has
engaged in any prohibited transaction as such term is defined in Section 4975 of
the Code or Section 406 of ERISA.



                                      -11-
<PAGE>   11

       5.15 ENVIRONMENTAL MATTERS. There have been no disposals, releases or
threatened releases of Hazardous Materials (as defined below) on, from or under
any such Facilities in violation of law that would have a material adverse
effect on the Assets, the Business or the Buyer. Seller has no knowledge of any
presence, disposals, releases or threatened releases of Hazardous Materials on,
from or under any of the Facilities in violation of law. For purposes of this
Section, the terms "DISPOSAL," "RELEASE" and "THREATENED RELEASE" have the
definitions assigned thereto by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as
amended ("CERCLA"). For the purposes of this Section, "HAZARDOUS MATERIALS"
means any hazardous or toxic substance, material or waste that is, or becomes
prior to the Closing Date, regulated under, or defined as a "hazardous
substance," "pollutant", "contaminant", "toxic chemical", "hazardous material",
"toxic substance" or "hazardous chemical" or similar hazardous substance under
(i) CERCLA; (ii) the Emergency Planning and Community Right-to-Know Act, 42
U.S.C. Section 11001 et seq.; (iii) the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801 et seq.; (iv) the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et. seq., (v) the Occupational Safety and Health Act of 1970, 29
U.S.C. Section 651 et seq., (vi) regulations promulgated under any of the above
statutes; or (vii) any other applicable federal, state or local statute,
ordinance, rule or regulation that has a scope or purpose similar to those
identified.

       None of the Facilities is in violation of any federal, state or local
law, ordinance, regulation or order relating to industrial hygiene or to the
environmental conditions on, under or about the Facilities, including, but not
limited to, soil and ground water condition, which would have a material adverse
effect on the Assets, the Business or the Buyer.

       Neither Seller nor, to Seller's knowledge, any third party, has used,
generated, manufactured or stored on, under or about the Facilities or
transported to or from such Facilities any Hazardous Materials in violation of
the law, which would have a material adverse effect on the Assets, the Business
or the Buyer.

       There has been no litigation, proceeding or administrative action brought
or threatened against Seller, or any settlement reached by Seller with, any
party or parties alleging the presence, disposal, release or threatened release
of any Hazardous Materials on, from or under any of the Facilities which is
reasonably likely to have a material adverse effect on the Assets, the Business
or the Buyer.

       5.16 EMPLOYEES. Attached hereto as SCHEDULE 5.16 is a list, which is
complete in all material respects, of Arca's employees, contractors and
subcontractors whose work relates to the Business as of the Closing, including a
description of the title and responsibilities of each such employee, contractor
and subcontractor, the current compensation payable to each such employee,
contractor and subcontractor, the amount of accrued and unused vacation time for
each such employee, contractor and subcontractor, the date of hire and the date
and amount of last compensation adjustment and any contract, agreement,
understanding or ongoing commitment of Seller to such employee, contractor or
subcontractor, whether or not in written form. To the Seller's knowledge, no
employee of Arca has any claims pending against the Seller (whether under any
law, any agreements between such employee and the Seller or otherwise) on
account of or for (i) overtime pay, other than overtime pay for the current
payroll period, (ii) wages or salary (excluding bonuses and amounts accruing
under annual bonus plans) for any period other than the current payroll,
including any bonuses, benefits or other compensation payable with respect to
the period prior to the Closing Date, (iii) vacation, time off or pay in lieu of
vacation or time off other than that earned in respect of the current fiscal
year (for any period other than the current payroll period), (iv) any violation
of any statute, ordinance or regulation relating to minimum wages or maximum
hours of work or (v) a violation of ERISA. CyberGuard's human resources
department has not received written notification from any employee of Arca to
the effect that such employee presently plans to terminate his or her
relationship with the Seller.

       5.17 ACCESS TO CODE. To the Seller's knowledge, no former employee or
consultant of Arca has possession of any software (in source code or object code
form) that is owned by Arca or used in the Business and material to the
Business.



                                      -12-
<PAGE>   12

       5.18 NO DEFAULT UNDER LEASES. Seller has not materially breached or been
in material default of any provision of, and is currently in material compliance
with and not in breach or default of, the real property leases for the
Facilities or other properties leased for the conducting of the Business (the
"LEASES") and, except for the consents specifically referenced in Schedule
1.2(c) hereto, nothing in such lease restricts or prevents Seller from selling
and transferring the Assets to Buyer free and clear of any claims or liens of
the lessors under such Leases. No written notice of violation of any ordinance
or administrative regulation (including any zoning or building law) has been
received by Seller with respect to any of the Facilities or other properties
leased for the conducting of the Business. The Facilities and other properties
leased for the conducting of the Business are in a state of good maintenance and
repair and are adequate and suitable for the purposes for which they are
presently being used, taken as a whole. To Seller's knowledge, neither the whole
nor any portion of such Facilities or other properties leased for the conducting
of the Business is being condemned or otherwise taken by any public authority,
nor is any such condemnation or taking to Seller's knowledge threatened or
contemplated.

       5.19 PERMITS AND LICENSES. The Permits and Licenses represent all
material licenses, franchises, approvals, certificates, permits, planning
permissions and authorizations necessary for the conduct of the Business and are
presently in full force and effect and no action or claim is pending, and no
notice of any such claim or action has been received which threatens to revoke,
vary, modify or terminate any material Permit or License or declare any material
Permit or License invalid in any respect. The Business is being operated in
material compliance with all Permits and Licenses. Neither the execution,
delivery nor performance of this Agreement shall adversely affect the status of
any material Permit or License nor permit such material Permits or Licenses to
be terminated whether or not following the giving of notice or making of
payment.

       5.20 YEAR 2000 COMPLIANCE. None of the Contracts contain obligations with
any customers or other persons which require the Assets of Arca to be Year 2000
compliant. In the event the Assets of Arca are required to be Year 2000
compliant, Seller has taken all necessary steps to comply with the requirements
and terms of the Contracts.

       5.21 COMPLIANCE; GOVERNMENT AUTHORIZATION. Arca (and the properties used
by it) is, and has been in material compliance with all federal, state, local
and foreign laws, ordinances, regulations, judgments, rulings, orders and other
legal requirements applicable to it, its properties or its operations. Seller
has furnished Buyer with true and correct copies of all correspondence from
governmental authorities asserting that Arca is not or was not in material
compliance with any laws, ordinances, regulations, judgments, rulings, orders or
other requirements. All material deficiencies noted in any such report furnished
to Buyer in accordance with this Section 5.21 have been corrected. There is no
existing governmental or judicial order or decree directed expressly at Arca or
the Assets. Arca is, and during the past five years, has been, in material
compliance with all defense contract accounting standards and all related and
similar standards, laws, rules, regulations, guidelines and the like. A list of
all material investigations, proceedings, actions, notices, reports, assessments
and correspondence or other communications from or to any governmental entity
during the past five years with respect to defense contract accounting standards
is set forth on Schedule 5.21, no material deficiency has been asserted against
Arca with respect to the foregoing matters, and each such deficiency has been
corrected without cost or adverse impact to Arca.

6.     COVENANTS OF BUYER.

       Buyer covenants and agrees with Seller as follows:

       6.1 CONFIDENTIAL INFORMATION. All copies of financial information,
marketing and sales information, pricing, marketing plans, business plans,
financial and business projections, manufacturing processes and procedures,
formulae, methodologies, inventions, product designs, product specifications and
drawings, and other confidential and/or proprietary information of Seller
disclosed to Buyer in the course





                                      -13-
<PAGE>   13

of negotiating the transaction contemplated by this Agreement ("SELLER
CONFIDENTIAL INFORMATION") will be held in confidence and not used or disclosed
by Buyer or any of its employees, affiliates or stockholders for a period of two
(2) years from the Effective Date and will be promptly destroyed by Buyer or
returned to Seller, upon Seller's written request to Buyer; PROVIDED, HOWEVER
that from and after the Closing, the foregoing covenant shall not be applicable
to any Seller Confidential Information included in the Assets. Buyer's
employees, affiliates and stockholders will not be given access to Seller
Confidential Information except on a "need to know" basis. It is agreed that
Seller Confidential Information will NOT include information that: (a) is proven
to have been known to Buyer prior to receipt of such information from Seller;
(b) is disclosed by a third party having the legal right to disclose such
information and who owes no obligation of confidence to Seller; (c) is now, or
later becomes part of the general public knowledge or literature in the art,
other than as a result of a breach of this Agreement by Buyer; or (d) is
required by law, including the rules and regulations of the Securities and
Exchange Commission, a securities exchange or the Nasdaq Stock Market to be
disclosed by any party. The provisions of this Section 6.1 supersede the
Non-Disclosure Agreement between the parties dated June 4, 1998. The covenants
set forth in this Section 6.1 shall survive the execution and delivery of this
Agreement.

       6.2 POST-CLOSING ACCESS AND COOPERATION. After the Closing, the Buyer
shall permit the Seller reasonable access to all books and records related to
the Business and employees, accountants and agents related to the Business as
may be necessary or advisable in connection with the preparation of tax returns,
and audited financial statements in accordance with GAAP, related to the
Business or the prosecution or defense of tax audits or third party claims
related to the Business or as otherwise reasonably requested by the Seller.

7.     COVENANTS OF SELLER.

       Seller covenants and agrees with Buyer as follows:

       7.1 CONSENT OF THIRD PARTIES. Seller shall use its best efforts to obtain
the consents for the transfer of Assets set forth in Schedule 5.7 as soon as
practicable after the Closing.

       7.2 FURTHER ASSURANCES. From and after the Closing Date, the Seller and
the Buyer shall promptly execute and deliver to the other any and all such
further assignments, endorsements and other documents as the other may
reasonably request for the purpose of effecting the transfer of Seller's title
to the Assets to Buyer and/or carrying out the provisions of the Agreements.
Seller hereby appoints Buyer as its attorney-in-fact for the limited purpose of
executing such assignments, endorsements and other documents should Seller be
unable or unwilling to do so.

       7.3 PAYMENT OF ACCOUNTS PAYABLE. Seller hereby acknowledges that all
accounts payable known to Seller (the "ACCOUNTS PAYABLE") related to the
Business as of the Effective Date are listed on SCHEDULE 7.3 hereto and hereby
agrees to pay all such Accounts Payable immediately following the Effective
Date, whether or not yet due, and shall provide a written report to Buyer within
one week thereafter confirming that all such Accounts Payable have been
discharged.

       7.4 NON-SOLICITATION. As a material inducement and consideration for the
Buyer to enter into this Agreement, for a period of three (3) years from and
after the Closing Date, the Seller shall not (and shall not allow its then
current employees to) (i) encourage, induce, attempt to induce, solicit or
attempt to solicit (on the Seller's behalf or on behalf of any other person or
entity) anyone who is employed at the time, or was employed during the previous
three months, by the Buyer or any of the Buyer's subsidiaries, to leave his or
her employment with the Buyer or any of the Buyer's subsidiaries; or (ii)
solicit the business of any customers or prospective customers of Arca as of the
Closing Date with respect to network security services, except for services
related to installation, maintenance and use of CyberGuard's network security
products.



                                      -14-
<PAGE>   14

       7.5 USE OF NAMES "ARCA" AND "ARCA SYSTEMS". From and after the Closing
Date, Seller shall cease to use the trademarks and trade names "Arca", "Arca
Systems" or any similar name, without the prior written consent of Buyer, and
Seller shall file an amendment to its Articles of Incorporation with the
Secretary of State of California to change the name of the Arca corporate entity
within 10 days after the Closing Date.

       7.6 CONFIDENTIAL INFORMATION. All copies of financial information,
marketing and sales information, pricing, marketing plans, business plans,
financial and business projections, manufacturing processes and procedures,
formulae, methodologies, inventions, product designs, product specifications and
drawings, and other confidential and/or proprietary information of Buyer
disclosed to Seller in the course of negotiating the transaction contemplated by
this Agreement ("BUYER CONFIDENTIAL INFORMATION") will be held in confidence and
not used or disclosed by Seller or any of its employees, affiliates or
stockholders for a period of two (2) years from the Closing Date and will be
promptly destroyed by Seller or returned to Buyer, upon Buyer's written request
to Seller. Seller's employees, affiliates and stockholders will not be given
access to Buyer Confidential Information except on a "need to know" basis. It is
agreed that Buyer Confidential Information will NOT include information that:
(a) is proven to have been known to Seller prior to receipt of such information
from the Buyer; (b) is disclosed by a third party having the legal right to
disclose such information and who owes no obligation of confidence to the Buyer;
(c) is now, or later becomes part of the general public knowledge or literature
in the art, other than as a result of a breach of this Agreement by Seller; or
(d) is required by law, including the rules and regulations of the Securities
and Exchange Commission, a securities exchange or the Nasdaq Stock Market to be
disclosed by any party. The provisions of this Section 7.6 supersede the
Non-Disclosure Agreement between the parties dated June 4, 1998.

       7.7 TAXES. Seller agrees to promptly pay all sales, use or other similar
taxes imposed on the sale of the Assets to Buyer under this Agreement (the
"SALES TAXES"), and Buyer hereby agrees to reimburse Seller promptly upon
written request for one-half of the amount of such Sales Taxes paid by Seller
(the "BUYER SALES TAX REIMBURSEMENT"). Except for the Buyer Sales Tax
Reimbursement, Seller agrees to defend, indemnify and hold Buyer harmless from
and against any Sales Taxes or claims for payment thereof, or penalties
associated therewith, by any tax authority.

8.     CLOSING OBLIGATIONS.

       8.1 BUYER'S CLOSING OBLIGATIONS. At the Closing, the Buyer shall deliver
to the Seller the following:

                  (a) A certified copy of the resolutions of the Boards of
Directors of Buyer authorizing the execution and delivery by Buyer of this
Agreement, and all related agreements, and the consummation of the transactions
contemplated hereby and thereby;

                  (b) Payment of the Purchase Price;

                  (c) the Escrow Agreement, substantially in the form attached
hereto as EXHIBIT A signed by authorized officers of Buyer on behalf of Buyer;

                  (d) The Assignment, Bill of Sale and Assumption Agreement,
substantially in the form attached hereto as EXHIBIT B, signed by authorized
officers of Buyer on behalf of Buyer;

                  (e) Good Standing Certificates for Exodus from the Secretaries
of State of the States of California and Delaware and for EC Acquisitions Corp.
from the Secretary of State of the State of Delaware, of recent date; and

                  (f) Incumbency certificates of Exodus and Sub.

                                      -15-
<PAGE>   15

       8.2 SELLER'S CLOSING OBLIGATIONS. At the Closing, the Seller shall
deliver to the Buyer the following:

                  (a) The Assets, or if Seller has delivered the Assets to Buyer
prior to the Closing, a certificate signed by an officer of Seller, on behalf of
Seller, to the effect that the Assets have been earlier delivered to Buyer;

                  (b) A Good Standing Certificate for CyberGuard from the
Secretaries of State of the States of Florida and California and for Arca from
the Secretary of State of the States of California, Virginia, Maryland and
Massachusetts, of recent date;

                  (c) Incumbency Certificates of CyberGuard and Arca;

                  (d) A certified copy of the resolutions of the Boards of
Directors of Seller authorizing the execution and delivery by Seller of this
Agreement, and all related agreements, and the consummation of the transactions
contemplated hereby and thereby;

                  (e) the Escrow Agreement, substantially in the form attached
hereto as EXHIBIT A, signed by authorized officers of the Seller on behalf of
the Seller;

                  (f) The Assignment, Bill of Sale and Assumption Agreement,
substantially in the form attached hereto as EXHIBIT B, signed by authorized
officers of the Seller on behalf of the Seller.

                  (g) A copy of an opinion from Goldblum Lentz & Co., the
Seller's investment banker, stating that the sale of Assets related to the
Business for the Purchase Price stated herein is fair to the Seller.

                  (h) Such specific assignments and other instruments of
conveyance as the Buyer and/or Buyer's counsel may reasonably request.

                  (i) All consents obtained by the Seller up to and as of the
Closing Date.

                  (j) A written opinion of Seller's counsel, addressed to the
Buyer and dated the Closing Date in the form of Schedule 8.2(j).

                  (k) The Seller shall have delivered, and the Buyer shall have
received, a solvency certificate substantially in the form attached hereto as
EXHIBIT C, signed by an authorized officer of the Seller on behalf of Seller.

9.     SURVIVAL OF WARRANTIES AND INDEMNIFICATION.

       9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties made by the Seller or the Buyer herein, or in any
certificate, schedule or exhibit delivered pursuant hereto, shall survive the
Closing for a period of one (1) year after the Closing Date except that all
representations relating to taxes or tax liens in Section 5.13 shall survive
until the expiration of the applicable statute of limitations (including
extensions). Each of the covenants set forth in Sections 1, 2, 3, 6 and 7 hereof
shall survive the Closing and until the expiration of the applicable statutes of
limitations (including extensions).

       9.2 INDEMNIFIED CLAIMS. For the purpose of this Section 9.2 and when used
elsewhere in this agreement, "CLAIM" shall mean and include any and all
liability, loss, damage, claim, expense, cost, fine, fee, penalty, obligation or
injury including, without limitation, those resulting from any and all actions,
suits, proceedings, demands, assessments, judgments, awards or arbitrations,
together with reasonable costs and expenses including the reasonable attorneys'
fees and other legal costs and expenses relating thereto, net of any insurance
benefits.



                                      -16-
<PAGE>   16

       9.3        INDEMNIFICATION BY SELLER.

                  9.3.1 GENERAL INDEMNIFICATION. Subject to the provisions and
limitations set forth in this Section 9, Seller agrees to defend, indemnify and
hold harmless Buyer, any parent, subsidiary or affiliate of Buyer and any
director, officer, employee, stockholder, agent or attorney of Buyer or of any
parent, subsidiary or affiliate of Buyer (collectively, the "BUYER INDEMNIFIED
PERSONS") from and against any Claim which arises out of or results from:

                  (a) any breach of any covenant, or the material inaccuracy or
untruth of any representation or warranty of Seller made herein or pursuant to
any certificate, exhibit or schedule delivered hereunder;

                  (b) any demand, claim, debt, suit, cause of action or
proceeding made or asserted by a person, including, but not limited to a
shareholder, creditor, receiver, or trustee in bankruptcy of Seller, asserting
that the transfer of the Assets to Buyer hereunder constitutes a fraudulent
conveyance, fraudulent transfer, or constitutes a preference under any
applicable state or federal law, including but not limited to the United States
Bankruptcy Code;

                  (c) any demand, claim, debt, suit, cause of action or
proceeding made or asserted by any employee or independent contractor or any
former employee or independent contractor of Seller, to the extent that it
relates in any manner to any termination by Seller in connection with the
transactions contemplated by this Agreement of his, her or its employment or the
services of such employee or independent contractor;

                  (d) any demand, claim, debt, suit, cause of action or
proceeding arising from the Excluded Liabilities, except as otherwise provided
in Section 9.4.3 hereof;

                  (e) any demand, claim, debt, suit, cause of action or
proceeding brought by shareholders of Seller (other than Buyer, Arca, the Stock
Sellers (as defined below) or the shareholders of Buyer) against Seller and/or
Buyer with respect or related in any way to the fairness of the transactions
contemplated herein and in connection herewith, including the Claims and Stock
Purchase Agreement and the other agreements listed on EXHIBIT A thereto; and

                  (f) taxes, assessments and other governmental charges of any
kind or nature whatsoever imposed on Seller and arising out of the transactions
contemplated by this Agreement, except for the Buyer Sales Tax Reimbursement.

                  9.3.2 LIMITATIONS. Except as provided under the first
paragraph of Section 9.3.3, this Section 9.3 sets forth the sole and exclusive
remedies of the Buyer Indemnified Persons for misrepresentation or breach of or
default in connection with any of the representations, warranties or covenants
given by or on behalf of the Seller pursuant hereto and in connection with the
other events requiring indemnification under Section 9.3.1 hereof. Except as
provided under the first paragraph of Section 9.3.3, Seller shall not incur
liability with respect to such misrepresentation or breach of or default in
connection with any of the representations, warranties and covenants or the
indemnification obligations set forth in Section 9.3.1 (a), (c), and (d) beyond
$258,000 in the aggregate and shall not incur liability with respect to the
indemnification obligations set forth in Section 9.3.1 (b) and (e) beyond $1.0
million in the aggregate.

                  9.3.3 EXCEPTIONS TO LIMITATIONS. None of the provisions of
this Section 9 or of the Escrow Agreement shall in any manner limit the
liability or indemnification obligations of the Seller with respect to (i) fraud
or (ii) any criminal matters or (iii) any claim concerning the breach of the
representations, warranties or covenants set forth in Sections 1.3, 7.1, 7.2,
7.4, 7.5, 7.6 and 7.7 or (iv) Seller's failure to discharge the Accounts Payable
listed on SCHEDULE 7.3 hereto.





                                      -17-
<PAGE>   17

                  Notwithstanding anything to the contrary set forth herein, the
Seller shall not incur liability with respect to a misrepresentation or breach
of or default in connection with the representations or warranties of Seller
herein to the extent that such misrepresentation, breach or default is due to an
action, omission or circumstance which existed, occurred or arose on or prior to
the Prior Acquisition Date and of which CyberGuard has no knowledge (either of
the misrepresentation, breach, default, act, omission or circumstance, to the
extent it related to CyberGuard, or of the misrepresentation, breach or default,
to the extent it related to Arca). In addition, with the exception of the
representations, warranties and covenants contained (i) in the first two
sentences of Section 5.1, (ii) in the fourth, fifth and sixth sentences of
Section 5.1 solely with respect to CyberGuard (excluding Arca), (iii) in the
first two sentences of Section 5.2, (iv) in the third sentence of Section 5.2
solely with respect to representations and warranties related to CyberGuard
(excluding Arca), (v) in Section 5.12, excluding the references therein to
"other third party" and otherwise solely with respect to representations and
warranties related to authorizations, approvals, consents and filings referenced
therein that are not specific to the nature of Arca's business and (vi) in
Section 5.14, to the extent that the representations and warranties are affected
by ERISA Plans of CyberGuard or its affiliates (other than Arca) not by their
terms designed to cover Arca, Seller shall not incur liability with respect to a
misrepresentation or breach of or default in connection with the representations
or warranties of Seller herein to the extent that such misrepresentation, breach
or default is due to an action (other than of CyberGuard (excluding any employee
of Arca)), omission or circumstance which occurred after the Prior Acquisition
Date and of which CyberGuard had no knowledge (either of the misrepresentation,
breach, default, act, omission or circumstance, to the extent it relates to
CyberGuard, or of the misrepresentation, breach or default, to the extent it
relates to Arca), unless and until Buyer follows the procedures as set forth
below. The Seller shall not have liability under the circumstances described in
the immediately preceding sentence unless (i) the Buyer Indemnified Person
seeking indemnification shall first have made a written demand with respect to
any Claim both against the Sellers under the Claims and Stock Purchase Agreement
(the "STOCK SELLERS") and against the Seller hereunder, (ii) Buyer shall have
fully pursued and exhausted its rights to seek recovery of its Claims under the
procedures set forth under the Claims and Stock Purchase Agreement against the
Stock Sellers (which requirements would not preclude Buyer from settling such
Claims pursuant to the terms of such Agreement; provided, however, that any
settlement of such Claims between Buyer and the Stock Sellers shall not be made
without the written consent of the Seller hereunder, which consent shall not be
unreasonably withheld or delayed), but all or a portion of such Claims remain
unsatisfied. In such event, subject to the conditions of this Section 9.3
(including Section 9.3.2), Seller shall be liable for any portion of the Claims
which remain unsatisfied; provided, however, that with respect to any Claims
which are subject to a settlement agreement between the Buyer and the Stock
Sellers, such liability shall only apply to the extent that the Buyer has as of
such time sought recovery of the full amount of the Escrowed Consideration and
Additional Indemnity Amounts under the Claims and Stock Purchase Agreement, and
provided further, that such liability shall only apply to the extent that (i)
Buyer has irrevocably been paid the entire $300,000 of Escrowed Consideration
under the Claims and Stock Purchase Agreement and (ii) the Founders have an
obligation to pay the $200,000 Additional Indemnity Amounts to Buyer under the
Claims and Stock Purchase Agreement and have either paid such amount to the
Buyer or the Buyer has reasonably determined that they are financially unable to
do so. The Seller will be subrogated to the rights of the Buyer Indemnified
Persons under Section 6 of the Claims and Stock Purchase Agreement to the extent
any indemnity payments are made by Seller following the foregoing procedure
(excluding rights under the Escrow Agreement referenced therein). For purposes
only of this paragraph of Section 9.3.3 and Section 9.4.3, the words "knowledge"
or "known" as it relates to CyberGuard shall mean the actual knowledge of Tommy
Steele, Steve Gallers, David Proctor, Shelley James, Terry Zielinski, Dick
Rifenburgh, Lee Risevig, Adriana Kovalovska and Brian Foremny.

                  9.3.4 THRESHOLD. In seeking indemnification for Claims under
this Section, the Buyer Indemnified Persons shall make no claims unless and
until such Claims aggregate at least $50,000, in which event such Buyer
Indemnified Persons may recover all Claims at their option, and in their sole
discretion, and not merely the portion that exceeds $50,000, and shall exercise
their remedies first with respect to the Escrow Funds deposited in escrow
pursuant to the Escrow Agreement.





                                      -18-
<PAGE>   18

       9.4        INDEMNIFICATION BY BUYER.

                  9.4.1 GENERAL INDEMNIFICATION. Subject to the provisions and
limitations set forth in this Section 9, Buyer agrees to defend, indemnify and
hold harmless Seller, any parent, subsidiary or affiliate of Seller and any
director, officer, employee, stockholder, agent or attorney of Seller or of any
parent, subsidiary or affiliate of Seller (collectively, the "SELLER INDEMNIFIED
PERSONS") from and against any Claim which arises out of or results from (i) any
breach of any covenant, or the material inaccuracy or untruth of any
representation or warranty of the Buyer made herein or pursuant to any
certificate, exhibit or schedule delivered hereunder or (ii) taxes, assessments
and other governmental charges of any kind or nature whatsoever imposed on Buyer
and arising out of the transactions contemplated by this Agreement, except for
Sales Taxes (other than the Buyer Sales Tax Reimbursement).

                  9.4.2 LIMITATIONS. Except as provided in this Section 9.4.2,
this Section 9.4 sets forth the sole and exclusive remedies of the Seller
Indemnified Persons for misrepresentation or breach of or default in connection
with any of the representations, warranties or covenants given by or on behalf
of the Seller pursuant hereto. Buyer shall not incur liability with respect to
such misrepresentation or breach of or default in connection with any of the
representations, warranties and covenants beyond $258,000 in the aggregate.
However, none of the provisions of this Section 9 shall in any manner limit the
liability or indemnification obligations of the Buyer with respect to (i) fraud,
(ii) criminal matters, (iii) any claim concerning the breach of the
representations, warranties or covenants set forth in Sections 1.3, 6.1 or 6.2
hereof (except to the extent the terms of any of such Sections provide for
specific limitations with respect to the indemnification obligations of the
Buyer thereunder), (iv) Buyer's failure to discharge Assumed Liabilities or (v)
any obligations arising under Section 9.4.3 hereof (except to the extent the
terms of such Section provide for specific limitations with respect to the
indemnification obligations of the Buyer thereunder).

                  9.4.3 EXCLUDED LIABILITIES. In addition, subject to the
provisions of this Section 9.4.3, Buyer agrees to indemnify and hold harmless
CyberGuard and Arca for any debts, liabilities or obligations of Arca related to
the Business, including absolute, accrued and contingent liabilities, that
existed prior to the Closing Date (and specifically excluding liabilities or
obligations arising as a result of the transactions contemplated hereby or in
connection herewith (other than the obligations created by this Section 9.4.3)
and any Employee Liabilities) and: (i) that are not assumed by Buyer under this
Agreement; (ii) that are not included on Schedule 7.3 hereto; (iii) the
existence of which does not constitute a breach of any representation, warranty
or covenant of Seller contained in this Agreement except to the extent such
misrepresentation, breach or default is of a representation or warranty only
(exclusive of the covenants set forth in Sections 1.3, 7.2, 7.4, 7.5 7.6 or
7.7), does not involve fraud and does not involve criminal matters and (a) is
due to an action or omission which existed, occurred or arose on or prior to the
Prior Acquisition Date and of which CyberGuard has no knowledge (either of the
misrepresentation, breach, default, act, omission or circumstance, to the extent
it related to CyberGuard, or of the misrepresentation, breach or default, to the
extent it related to Arca) or (b) with the exception of the representations,
warranties and covenants contained in (A) the first two sentences of Section
5.1, (B) the fourth, fifth and sixth sentences of Section 5.1 solely with
respect to CyberGuard (excluding Arca), (C) the first two sentences of Section
5.2, (D) the third sentence of Section 5.2 solely with respect to
representations and warranties related to CyberGuard (excluding Arca), (E)
Section 5.12, excluding the references therein to "other third party" and
otherwise solely with respect to representations and warranties related to
authorizations, approvals, consents and filings referenced therein that are not
specific to the nature of Arca's business, and (F) Section 5.14, to the extent
that the representations and warranties are affected by ERISA Plans of
CyberGuard or its affiliates not by their terms designed to cover Arca, is due
to an action (other than of CyberGuard (excluding any employee of Arca)),
omission or circumstance which occurred after the Prior Acquisition Date and of
which CyberGuard had no knowledge (either of the misrepresentation, breach,
default, act, omission or circumstance, to the extent it relates to CyberGuard,
or of the misrepresentation, breach or default, to the extent it relates to
Arca); and (iv) of which CyberGuard had no knowledge, (the "UNKNOWN
LIABILITIES"); provided, however, that the foregoing indemnification obligations
shall not have any force or effect until Seller has fully discharged an
aggregate of $300,000 of such Unknown Liabilities, and then such indemnification
obligation shall be effective only with respect to any Unknown Liabilities




                                      -19-
<PAGE>   19

which exceed such $300,000 amount. Notwithstanding anything to the contrary set
forth in this Section 9, the indemnification obligations set forth in this
Section 9.4.3 shall terminate one year after the Closing Date, as provided in
Section 9.6(a) hereof.

       9.5 PROCEDURES FOR INDEMNIFICATION.

                  9.5.1 INDEMNIFICATION PURSUANT TO ESCROW AGREEMENT. As long as
the Escrow Agreement is still in effect and Escrow Funds remain outstanding
thereunder, promptly after the receipt by Buyer of notice or discovery of any
Claim giving rise to indemnification rights under this Agreement Buyer will give
Seller and the Escrow Agent written notice of such Claim in accordance with
Section 3 of the Escrow Agreement. The procedures regarding the defense and
settlement of any such Claim shall be governed by Section 1 of the Escrow
Agreement. Buyer may assert a Claim at any time prior to the applicable
expiration date as set forth in Section 9.6.

                  9.5.2 INDEMNIFICATION NOT INVOLVING ESCROW. With respect to
indemnification by the Buyer, or by the Seller in the event that the Escrow
Agreement is no longer in effect, promptly upon becoming aware of any Claim
giving rise to indemnification rights under this Agreement, the Buyer
Indemnified Persons or Seller Indemnified Persons, as applicable (the
"INDEMNIFIED PARTY"), will give the other party (the "INDEMNIFYING Party")
notice of such Claim as provided for in Section 9.5.2(2) hereof (the "NOTICE OF
CLAIM").

                           (1)      THIRD PARTY CLAIMS AND DIRECT CLAIMS.

                                    (A) THIRD PARTY CLAIMS. In the case of a
Third Party Claim (as defined in Section 9.5.2(2) herein), within ten days of
receipt of a Notice of Claim, the Indemnifying Party may, by written notice to
the Indemnified Party, elect to, at its own expense, participate in or assume
control of the negotiation, settlement or defense of the Claim and, in such
event, the Indemnifying Party shall reimburse the Indemnified Party for all of
the Indemnified Party's out-of-pocket expenses as a result of such participation
or assumption. If the Indemnifying Party elects to assume such control, the
Indemnified Party shall have the right to participate in the negotiation,
settlement or defense of such Third Party Claim and to retain counsel to act on
its behalf, provided that the fees and disbursements of such counsel shall be
paid by the Indemnified Party unless the Indemnifying Party consents to the
retention of such counsel at its expense. If the Indemnifying Party, having
elected to assume such control, thereafter fails to defend the Third Party Claim
within a reasonable time, the Indemnified Party shall be entitled to, at the
expense of the Indemnifying Party, assume such control and the Indemnifying
Party shall be bound by the results obtained by the Indemnified Party with
respect to such Third Party Claim. If either party makes a payment, resulting in
settlement of the Third Party Claim, which precludes a final determination of
the merits of the Third Party Claim and the Indemnified Party and the
Indemnifying Party are unable to agree whether such payment was unreasonable in
the circumstances having regard to the amount and merits of the Third Party
Claim, then such dispute shall be referred to and finally settled by binding
arbitration (as provided for in Section 9.5.2(4) herein) from which there shall
be no appeal.

                                    (B) SETTLEMENT OF THIRD PARTY CLAIMS. If
the Indemnifying Party fails to assume control of the defense of any Third Party
Claim, the Indemnified Party shall have the exclusive right, at the expense of
the Indemnifying Party, to contest, settle or pay the amount claimed in each
case on a reasonable basis. Whether or not the Indemnifying Party assumes
control of the negotiation, settlement or defense of any Third Party Claim,
neither party shall settle any Third Party Claim without the written consent of
the other party, which consent shall not be unreasonably withheld or delayed;
provided, however, that the liability of such party shall be limited to the
proposed settlement amount if any such consent is not obtained for any reason
within a reasonable time after the request therefor.

                                    (C) DIRECT CLAIMS. In the case of a Direct
Claim (as defined in Section 9.5.2(2) herein), the Indemnifying Party shall have
60 days from receipt of the Notice of Claim within which to make such
investigation of the Claim as the Indemnifying Party considers necessary or






                                      -20-
<PAGE>   20

desirable. For the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both Parties
agree at or before the expiration of such 60 day period (or any mutually agreed
upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim or it will be settled pursuant to Section
9.5.2(3)(A) below. Failing such agreement, the matter shall be referred to
binding arbitration as provided for in Section 9.5.2(4) herein.

                           (2) NOTICE OF CLAIM. Each Notice of Claim by the
Indemnified Party will be in writing delivered to the Indemnifying Party, will
specify whether the Claim arises as a result of a claim by a person against the
Indemnified Party (a "THIRD PARTY CLAIM") or whether the Claim does not so arise
(a "DIRECT CLAIM"), and shall also specify with reasonable particularity (to the
extent that the information is available):

                                    (A) the factual basis for the Claim; and

                                    (B) the amount of the Claim, if known, or
if not known, the Indemnified Party's good faith estimate of the reasonably
foreseeable maximum amount of the alleged damages arising from such Claim (which
amount may be the amount of damages claimed by a third party plaintiff in an
action brought against the Indemnified Party based on alleged facts, which if
true, would result in liability to the Indemnified Party under Sections 9.3 or
9.4 of this Agreement) (the "ESTIMATED DAMAGES"), the basis thereof and
documentation supporting same.

                  The parties agree that if, through the fault of the
Indemnified Party, the Indemnifying Party does not receive a notice of any Claim
in time effectively to contest the determination of any liability susceptible of
being contested, then the liability of the Indemnifying Party to the Indemnified
Party under Sections 9.3 or 9.4 of this Agreement shall be reduced by the amount
of any losses incurred by the Indemnifying Party resulting from the Indemnified
Party's failure to give such notice on a timely basis.

                           (3) RESOLUTION OF NOTICE OF CLAIM. Any Notice of
Claim received by the Indemnifying Party, will be resolved as follows:

                                    (A) UNCONTESTED CLAIM. In the event that the
Indemnifying Party does not either (i) contest a Notice of Claim in writing to
the Indemnified Party or (ii) pay the amount demanded (as certified by the
Indemnifying Party to the Indemnified Party in writing, all within 60 days after
Notice of Claim was received by the Indemnifying Party (an "UNCONTESTED CLAIM"),
then the Indemnifying Party will promptly pay to the Indemnified Party that
amount equal to the amount of the Claim and/or Estimated Damages specified in
the Notice of Claim.

                                    (B) CONTESTED CLAIMS. In the event that the
Indemnifying Party delivers written notice contesting all, or a portion of, a
Notice of Claim to the Indemnified Party Agent within the 60-day period provided
above, matters that are subject to Third Party Claims brought against the
Indemnified Party in a litigation or arbitration will await the final decision,
award or settlement of such litigation or arbitration and shall be subject to
the provisions and procedures set forth in this Agreement. Matters that are
subject to Direct Claims and that are not resolved by the Indemnifying Party and
the Indemnified Party as provided for in Section 9.5.2(1)(C) herein will be
settled by binding arbitration which will be conducted as provided in Section
9.5.2(4) herein. Any portion of the Notice of Claim that is not contested will
be resolved as set forth above in Section 9.5.2(3)(A). The final decision of the
arbitrator will be furnished to the Indemnifying Party and the Indemnified Party
in writing and will constitute a conclusive determination of the issue in
question, binding upon the Indemnifying Party and the Indemnified Party.



                                      -21-
<PAGE>   21

                                    (C) DETERMINATION OF AMOUNT OF CLAIMS. Any
amount owed to the Indemnified Party hereunder, as finally determined pursuant
to Section 9.5.2(3)(A) or 9.5.2(3)(B) above, will constitute an Uncontested
Claim under Section 9.5.2(3)(A) hereof.

                           (4) ARBITRATION. The parties agree that they shall
use best reasonable efforts to settle amicably disagreements arising from or in
connection with this Agreement. To this effect, following notice of either to
the other of a disagreement, which shall include any failure to agree upon a
matter to be agreed upon (a "DISPUTE") the parties hereto shall consult and
negotiate with one another in good faith an understanding to reach a just and
equitable solution. If those attempts fail after a period of ten (10) Business
Days from the time the parties have been notified of the Dispute, then every
such Dispute shall be settled by arbitration in accordance with the commercial
arbitration rules of American Arbitration Association then in effect. Any
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction over the subject matter thereof. The arbitrator shall have
the authority to grant any equitable and legal remedies that would be available
in a judicial proceeding instituted to resolve the Dispute.

                                    (A) SELECTION OF ARBITRATOR. The American
Arbitration Association will have the authority to select an arbitrator from a
list of arbitrators who are lawyers familiar with relevant state contract law;
provided, however, that such lawyers cannot work for a firm then performing
services for either party, that each party will have the opportunity to make
such reasonable objection to any of the arbitrators listed as such party may
wish and that the American Arbitration Association will select the arbitrator
from the list of arbitrators as to whom neither party makes any such objection.
In the event that the foregoing procedure is not followed, each party will
choose one person from the list of arbitrators provided by the American
Arbitration Association (provided that such person does not have a conflict of
interest), and the two persons so selected will select from the list provided by
the American Arbitration Association the person who will act as arbitrator.

                                    (B) PAYMENT OF COSTS. Exodus and CyberGuard
will bear the expense of deposits and advances required by the arbitrator in
equal proportions, but either party may advance such amounts, subject to
recovery as an addition or offset to any award. The arbitrator will award to the
prevailing party, as determined by the arbitrator, all costs, fees and expenses
related to the arbitration, including reasonable fees and expenses of attorneys,
accountants and other professionals incurred by the prevailing party.

                                    (C) BURDEN OF PROOF. For any Dispute
submitted to arbitration, the burden of proof will be as it would be if the
claim were litigated in a judicial proceeding.

                                    (D) AWARD. Upon the conclusion of the
arbitration proceedings hereunder, the arbitrator will render findings of fact
and conclusions of law and a written opinion setting forth the basis and reasons
for any decision reached and will deliver such documents to each of Exodus and
CyberGuard along with a signed copy of the award.

                                    (E) TERMS OF ARBITRATION. The arbitrator
chosen in accordance with these provisions will not have the power to alter,
amend or otherwise affect the terms of these arbitration provisions or the
provisions of this Agreement.

                                    (F) EXCLUSIVE REMEDY. Except as specifically
otherwise provided in this Agreement, arbitration will be the sole and exclusive
remedy to the Indemnified Party or the Indemnifying Party for any Dispute
arising out of this Section 9.5.

       9.6        PERIOD FOR MAKING CLAIMS. A Claim under this Section 9:



                                      -22-
<PAGE>   22

                  (a) must be brought, if at all, at any time within one (1)
year after the Closing Date, with respect to any claim or claims for
indemnification under this Section 9 not described in subSection 9.6(b) below;

                  (b) may be brought at any time up to expiration of the
applicable statute of limitations (including extensions) with respect to any
claim for indemnification relating to or based upon the provisions of Sections
5.13 or the covenants included in Sections 1, 2, 3, 6 and 7.

                  Notwithstanding anything to the contrary, if, an Indemnified
Person makes a Claim for indemnification under either this Agreement or the
Escrow Agreement within such time period, then the Indemnified Person's rights
to indemnification under this Section 9.6 for such Claim shall survive any
expiration of such representation or warranty.

10.    MISCELLANEOUS.

       10.1 EXPENSES. Each of the parties hereto shall bear its own expenses
(including without limitation attorneys' fees) in connection with the
negotiation and consummation of the transaction contemplated hereby.

       10.2 NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be delivered personally or sent by
certified or registered United States mail, postage prepaid, or sent by
nationally recognized overnight express courier and addressed as follows:

                  (a)  IF TO SELLER:

                       CyberGuard Corporation
                       2000 West Commercial Blvd., Suite 200
                       Ft. Lauderdale, FL  33309
                       Attention:  President and General Counsel

                       WITH COPY TO:

                       Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
                       150 West Flagler Street
                       Miami, FL  33130
                       Attention:  Teddy D. Klinghoffer, Esq.

                  (b)  IF TO BUYER:

                       Exodus Communications, Inc.
                       2650 San Tomas Expressway
                       Santa Clara, CA  95051
                       Attention:  General Counsel

                       WITH COPY TO:

                       Fenwick & West LLP
                       Two Palo Alto Square
                       Palo Alto, CA  94306
                       Attention:  Eileen Duffy Robinett, Esq.

       10.3 ENTIRE AGREEMENT; CAPTIONS; COOPERATION. This Agreement, the
Exhibits and Schedules hereto (which are incorporated herein by reference) and
the agreements to be executed and delivered in connection herewith, together
constitute the entire agreement and understanding between the parties and




                                      -23-
<PAGE>   23

there are no agreements or commitments with respect to the transactions
contemplated herein except as set forth in this Agreement. This Agreement
supersedes any prior offer, agreement or understanding between the parties with
respect to the transactions contemplated hereby, including the Term Sheet dated
as of August 30, 1998 between Exodus and CyberGuard. The captions in this
Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
Buyer and Seller agree to cooperate in good faith in interpreting the provisions
of this Agreement.

       10.4 AMENDMENT; WAIVER. Any term or provision of this Agreement may be
amended only by a writing signed by Seller and Buyer. The observance of any term
or provision of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a writing
signed by the party to be bound by such waiver. No waiver by a party of any
breach of this Agreement will be deemed to constitute a waiver of any other
breach or any succeeding breach.

       10.5 NO THIRD PARTY BENEFICIARIES. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or to give any
person, firm or corporation, other than the parties hereto, any rights or
remedies under or by reason of this Agreement.

       10.6 EXECUTION IN COUNTERPARTS. For the convenience of the parties, this
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

       10.7 ASSIGNMENT. This Agreement may not be assigned by any party hereto
without the prior written consent of each other party; EXCEPT that Buyer may
assign this Agreement (and all related agreements) by operation of law or in
connection with any merger, consolidation or sale of all or substantially all
Buyer's assets or in connection with any similar transaction.

       10.8 BENEFIT AND BURDEN. This Agreement shall be binding upon, shall
inure to the benefit of, and be enforceable by and against, the parties hereto
and their respective successors and permitted assigns.

       10.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware (excluding
application of any choice of law doctrines that would make applicable the law of
any other state or jurisdiction) and, where appropriate, applicable federal law.

       10.10 SEVERABILITY. If any provision of this Agreement is for any reason
and to any extent deemed to be invalid or unenforceable, then such provision
shall not be voided but rather shall be enforced to the maximum extent then
permissible under then applicable law and so as to reasonably effect the intent
of the parties hereto, and the remainder of this Agreement will remain in full
force and effect. Nothing herein will be deemed to contradict the provisions of
Section 7.4 hereof.

       10.11 ATTORNEYS' FEES. Should a suit or arbitration be brought to enforce
or interpret any provision of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees to be fixed in amount by the
Court or the Arbitrator(s) (including without limitation costs, expenses and
fees on any appeal). The prevailing party will be entitled to recover its costs
of suit or arbitration, as applicable, regardless of whether such suit or
arbitration proceeds to a final judgment or award.






                                      -24-
<PAGE>   24


       10.12 SCHEDULES. Notwithstanding any provision to the contrary set forth
herein, any matter, fact, event or other information disclosed in any schedule
to this Agreement shall be deemed disclosed in each schedule to this Agreement.

       IN WITNESS WHEREOF, Buyer and Seller executed and delivered this
Agreement by their duly authorized representatives as of the Effective Date.


CYBERGUARD CORPORATION:                           EXODUS COMMUNICATIONS, INC:



By:                                               By:
   --------------------------                        --------------------------
                                                     Richard S. Stoltz
                                                     Chief Operating Officer and
                                                       Chief Financial Officer



ARCA SYSTEMS:                                     EC ACQUISITIONS CORP.:



By:                                               By:
   --------------------------                        --------------------------
                                                      Adam W. Wegner, President


















                                      -25-
<PAGE>   25



                                    EXHIBITS
                                    --------


Exhibit A                    Escrow Agreement

Exhibit B                    Assignment, Bill of Sale and Assumption Agreement

Exhibit C                    Form of Solvency Certificate


                                    SCHEDULES
                                    ---------


Schedule 1.2(c)          Contracts

Schedule 1.2(d)(i)       Seller's Business Products

Schedule 1.2(d)(ii)      Seller's Intellectual Property

Schedule 1.2(f)          Tangible Assets

Schedule 1.2(h)          Accounts Receivable

Schedule 1.2(i)          Other Assets

Schedule 1.3(b)          Non-Transferable and Non-Assignable Assets

Schedule 2.2             Allocation of Purchase Price

Schedule 5               Seller's Schedule of Exceptions

Schedule 5.4             Financial Statements and List of Material Liabilities

Schedule 5.7             Seller's Material Contracts and Commitments

Schedule 5.16            Seller's Employee List

Schedule 7.3             Accounts Payable

Schedule 8.2(j)          Opinion of Seller's Counsel


<PAGE>   26




                                    EXHIBIT B

                ASSIGNMENT, BILL OF SALE AND ASSUMPTION AGREEMENT


         This Assignment, Bill of Sale and Assumption Agreement (this
"AGREEMENT") is made as of September [29,] 1998 by and between CyberGuard
Corporation, a Florida corporation ("CYBERGUARD"), Arca Systems, Inc., a
California corporation and a wholly-owned subsidiary of CyberGuard ("ARCA" and
together with CyberGuard, the "SELLER"), Exodus Communications, Inc., a Delaware
corporation ("EXODUS"), and EC Acquisitions Corp., a Delaware corporation and a
wholly-owned subsidiary of Exodus ("SUB" and together with Exodus, the "BUYER").
Seller and Buyer are parties to a certain Asset Purchase Agreement dated as of
September [29,] 1998 (the "PURCHASE Agreement"). Capitalized terms used without
definitions herein shall have the meanings ascribed to such terms in the
Purchase Agreement.

         1. SALE AND ASSIGNMENT OF ASSETS. Pursuant to the Purchase Agreement,
Exodus, on behalf of Sub, has on the date hereof purchased the Assets of Arca
from CyberGuard. In accordance with and subject to the terms and conditions set
forth in the Purchase Agreement, for good and valuable consideration, the
receipt of which is hereby acknowledged, Seller does hereby sell, assign,
bargain, transfer, convey and deliver unto Sub all of the right, title and
interest in and to the Assets.

         2. ASSUMPTION OF ASSUMED LIABILITIES. In accordance with and subject to
the terms and conditions set forth in the Purchase Agreement, in partial
consideration for such transfer of the Assets by Seller to Buyer, Sub and Buyer
hereby undertake to assume, pay, perform, satisfy and discharge, all of the
Assumed Liabilities. Buyer does not agree to assume or pay any Excluded
Liabilities or any other debts, obligations or liabilities of Seller not
expressly assumed by Buyer in the Purchase Agreement.

         3. COOPERATION. Buyer and Seller agree to cooperate with each other to
execute and deliver such other documents and instruments and to do such further
acts and things as may be reasonably requested by the other to evidence,
document or carry out the sale of the Assets and the assumption of the Assumed
Liabilities.

         4. EFFECT OF AGREEMENT. Nothing in this Agreement shall, or shall be
deemed to, modify or otherwise affect any provisions of the Purchase Agreement
or affect the rights of the parties under the Purchase Agreement. In the event
of any conflict between the provisions hereof and the provisions of the Purchase
Agreement, the provisions of the Purchase Agreement shall govern and control.

         IN WITNESS WHEREOF, Seller and Buyer have caused this Assignment, Bill
of Sale and Assumption Agreement to be executed on the date first written above.


CYBERGUARD CORPORATION:                           EXODUS COMMUNICATIONS, INC.




By:                                              By:
   --------------------------                       --------------------------
                                                    Richard S. Stoltz
                                                    Chief Operating Officer and
                                                      Chief Financial Officer





                                      -i-

<PAGE>   27


ARCA SYSTEMS:                                      EC ACQUISITIONS CORP.




By:                                                By:
   --------------------------                         ----------------------
                                                      Adam W. Wegner
                                                      President



































                                      -ii-

<PAGE>   28





                                SCHEDULE 8.1 (c)

                           OPINION OF SELLER'S COUNSEL








































                                     -iii-

<PAGE>   29


                                ESCROW AGREEMENT
                                ----------------


                  This Escrow Agreement (this "AGREEMENT") is entered into as of
September 28, 1998 (the "EFFECTIVE DATE"), by and among Exodus Communications,
Inc., a Delaware corporation ("EXODUS"), EC Acquisitions Corp., a Delaware
corporation and wholly-owned subsidiary of Exodus ("SUB"), CyberGuard
Corporation, a Florida corporation ("CYBERGUARD"), and State Street Bank and
Trust Company of California, N.A., as escrow agent (the "ESCROW AGENT").

                  A. Exodus, Sub, CyberGuard and its wholly-owned subsidiary,
Arca Systems, Inc. ("ARCA") have entered into an Asset Purchase Agreement dated
as of September 28, 1998 (the "ASSET PURCHASE AGREEMENT") pursuant to which Sub
will acquire certain assets of Arca from CyberGuard. The capitalized terms used
in this Agreement and not otherwise defined herein will have the meanings given
them in the Asset Purchase Agreement, a copy of which is attached hereto as
EXHIBIT A; provided, however, that the Escrow Agent shall not be charged with
knowledge of, or under any obligations to determine or interpret, the meaning of
any such terms as so defined in the Asset Purchase Agreement for purposes of
performing or observing its duties hereunder.

                  B. Pursuant to the Asset Purchase Agreement, a payment of a
certain amount of cash is to be made by Exodus to CyberGuard (the "CASH
PAYMENT").

                  C. The Asset Purchase Agreement provides for Two Hundred and
Fifty-Eight Thousand Dollars ($258,000) of the Cash Payment (the "ESCROW FUNDS")
to be withheld by Exodus and placed in an escrow account (the "ESCROW ACCOUNT").

                  D. The parties hereto desire to establish the terms and
conditions pursuant to which the Escrow Funds will be deposited, held in, and
disbursed from the Escrow Account.

                  NOW, THEREFORE, the parties hereto hereby agree as follows:

                  1.       ESCROW AND INDEMNIFICATION

                           (a) ESCROW OF FUNDS. On the Effective Date,
notification of which shall have been given to the Escrow Agent in writing,
Exodus will deposit the Escrow Funds with the Escrow Agent, who will hold them
in escrow until required to be released pursuant to Section 9.3 of the Asset
Purchase Agreement and Section 4 hereof. The Escrow Agent agrees to accept
delivery of the Escrow Funds and to hold such Escrow Funds in escrow subject to
the terms and conditions of this Agreement.

                           (b) INDEMNIFICATION. Each of the parties to this
Agreement other than the Escrow Agent (collectively, the "INTERESTED PARTIES")
agrees that, (i) Exodus and any parent, subsidiary or affiliate of Exodus and
any director, officer, employee, stockholder, agent or attorney of Exodus or of
any parent, subsidiary or affiliate of Exodus (collectively, the "INDEMNIFIED
PERSONS") are indemnified pursuant to the terms of Section 9.3 of the Asset
Purchase Agreement (which terms and the terms defined therein are incorporated
herein by reference) from and against any Claims, subject to the limitations set
forth in Section 9.3 of the Asset Purchase Agreement and herein, (ii) for
purposes of this Agreement, references to Exodus will include all other
Indemnified Persons, as applicable, and (iii) the Escrow Funds will be security
for this indemnity obligation, subject to the limitations, and in the manner
provided, in Section 9.3 of the Asset Purchase Agreement and this Agreement. The
foregoing incorporation by reference of Section 9.3 of the Asset Purchase
Agreement (and the terms defined therein) by the Interested Parties shall not in
any way be deemed to cause the Escrow Agent to be charged with knowledge
thereof, or under any duty to determine or interpret, or to determine or compel
compliance with, such terms. Promptly upon becoming aware of any Claim giving
rise to indemnification rights under the Asset Purchase Agreement, Exodus will
give CyberGuard notice of such Claim as provided for in Section 3 hereof (the
"NOTICE OF CLAIM") and will also provide the Escrow Agent with a copy of the
Notice of Claim. The Escrow Agent will not transfer any of the Escrow Funds held
in the Escrow Account pursuant to a Notice of Claim until such Notice of Claim
has been finally resolved in accordance with Section 4 below.







                                      -iv-
<PAGE>   30

                           (c) THIRD PARTY CLAIMS. In the case of a Third Party
Claim (as defined in Section 3 herein), within ten days of receipt of a Notice
of Claim, CyberGuard may, by written notice to Exodus, elect to, at its own
expense, participate in or assume control of the negotiation, settlement or
defense of the Claim and, in such event, CyberGuard shall reimburse Exodus for
all of Exodus's out-of-pocket expenses as a result of such participation or
assumption. If CyberGuard elects to assume such control, Exodus shall have the
right to participate in the negotiation, settlement or defense of such Third
Party Claim and to retain counsel to act on its behalf, provided that the fees
and disbursements of such counsel shall be paid by Exodus unless CyberGuard
consents to the retention of such counsel at its expense. If CyberGuard, having
elected to assume such control, thereafter fails to defend the Third Party Claim
within a reasonable time, Exodus shall be entitled to, at the expense of
CyberGuard, assume such control and CyberGuard shall be bound by the results
obtained by Exodus with respect to such Third Party Claim. If either Party makes
a payment, resulting in settlement of the Third Party Claim, which precludes a
final determination of the merits of the Third Party Claim and Exodus and
CyberGuard are unable to agree whether such payment was unreasonable in the
circumstances having regard to the amount and merits of the Third Party Claim,
then such dispute shall be referred to and finally settled by binding
arbitration (as provided for in Section 5 herein) from which there shall be no
appeal.

                           (d) SETTLEMENT OF THIRD PARTY CLAIMS. If CyberGuard
fails to assume control of the defense of any Third Party Claim, Exodus shall
have the exclusive right, at the expense of CyberGuard, to contest, settle or
pay the amount claimed. Whether or not CyberGuard assumes control of the
negotiation, settlement or defense of any Third Party Claim, neither Party shall
settle any Third Party Claim without the written consent of the other Party,
which consent shall not be unreasonably withheld or delayed; provided, however,
that the liability of such Party shall be limited to the proposed settlement
amount if any such consent is not obtained for any reason within a reasonable
time after the request therefor.

                           (e) DIRECT CLAIMS. In the case of a Direct Claim (as
defined in Section 3 herein), CyberGuard shall have 60 days from receipt of the
Notice of Claim within which to make such investigation of the Claim as
CyberGuard considers necessary or desirable. For the purpose of such
investigation, Exodus shall make available to CyberGuard the information relied
upon by Exodus to substantiate the Claim, together with all such other
information as CyberGuard may reasonably request. If both Parties agree at or
before the expiration of such 60 day period (or any mutually agreed upon
extension thereof) to the validity and amount of such Claim, CyberGuard shall
immediately pay to Exodus the full agreed upon amount of the Claim or it will be
settled pursuant to Section 4(a) below. Failing such agreement, the matter shall
be referred to binding arbitration as provided for in Section 5 herein.

                           (f) The Escrow Agent shall have no responsibility for
or with respect to compliance by the Interested Parties with the terms or
requirements of this Section 1.

                  2.       DEPOSIT OF ESCROW FUNDS; RELEASE FROM ESCROW;
                           INVESTMENTS

                           (a) DELIVERY OF ESCROW FUNDS. Promptly after the
Effective Date, the Escrow Funds will be delivered by Exodus to the Escrow Agent
in the form of a check or wire transfer in the amount of Two Hundred and
Fifty-Eight Thousand Dollars ($258,000) and the Escrow Agent shall deposit the
Escrow Funds in a separate escrow account with the Escrow Agent (or an affiliate
or custodian acting on its behalf).





                                      -v-
<PAGE>   31

The Escrow Funds shall be maintained in such account until the release of the
Escrow Funds in accordance with Sections 2(b) and 2(c) hereof.

                           (b) TERMINATION OF ESCROW. On the first anniversary
of the Effective Date (the "FINAL RELEASE DATE"), the Escrow Agent will deliver
the Escrow Funds to CyberGuard less (A) any Escrow Funds delivered to Exodus in
accordance with Section 4 hereof in satisfaction of Claims and (B) any Escrow
Funds subject to delivery to Exodus in accordance with Section 4 hereof with
respect to any then pending but unresolved Claims of Exodus, subject to the
Escrow Agent's receipt of written instructions from Exodus and CyberGuard as
provided in Section 2(c) below. Any Escrow Funds held as a result of clause (B)
will be delivered to CyberGuard or Exodus (as appropriate) promptly upon
resolution of each specific Claim involved pursuant to Section 4.

                           (c) RELEASE OF ESCROW FUNDS. The Escrow Funds will be
held by the Escrow Agent until released pursuant to Section 2(b) above or
Section 4, below. On the Final Release Date (in the case of Section 2(b)) or
after the applicable release condition is met (in the case of Section 4), as the
case may be, the Escrow Agent will deliver to CyberGuard the amount of Escrow
Funds to be released on such date as identified by Exodus and CyberGuard to the
Escrow Agent in writing (in the case of Section 2(b)) or as identified in the
applicable Notice of Claim (in the case of Section 4(a)) or in the final
decision of litigation or arbitration, as applicable (in the case of Section
4(b)) received by the Escrow Agent, as the case may be. Such delivery will be in
the form of a check or wire transfer issued in the name of CyberGuard. Exodus
and CyberGuard undertake to deliver a timely written notice to Escrow Agent
identifying the amount of Escrow Funds to be released at such time.

                           (d) NO ENCUMBRANCE. No Escrow Funds or any beneficial
interest therein may be pledged, sold, assigned or transferred, including by
operation of law, by CyberGuard or be taken or reached by any legal or equitable
process in satisfaction of any debt or other liability of CyberGuard (other than
a security interest in the Escrow Funds that is hereby granted herein by
CyberGuard to Exodus as security for CyberGuard's obligations to Exodus under
Section 9.3 of the Asset Purchase Agreement), prior to the delivery to
CyberGuard of the Escrow Funds by the Escrow Agent. The Escrow Agent agrees that
to the extent CyberGuard has granted Exodus a security interest in the Escrow
Funds, Escrow Agent agrees to hold such Escrow Funds on behalf of Exodus as
Exodus' agent.

                           (e) POWER TO TRANSFER ESCROW FUNDS. The Escrow Agent
is hereby granted the power to effect any transfer of Escrow Funds contemplated
by this Agreement. Exodus will cooperate with the Escrow Agent in promptly
effecting such transfers.

                           (f) INVESTMENT OF ESCROW FUNDS. The Escrow Agent
shall invest the funds held in the Escrow Account in the Federated U.S. Treasury
Cash Reserve, which is a money market mutual fund registered under the
Investment Company Act of 1940, the principal of which is invested solely in
obligations issued or guaranteed by the United States government. All interest
or any other income earned with respect to such investment shall be allocated
and paid to CyberGuard and shall not constitute part of the Escrow Funds.

                  3. NOTICE OF CLAIM. Each Notice of Claim by Exodus must be
delivered before the Final Release Date and will be in writing delivered to
CyberGuard with a copy to the Escrow Agent, will specify whether the Claim
arises as a result of a claim by a person against Exodus (a "THIRD PARTY CLAIM")
or whether the Claim does not so arise (a "DIRECT CLAIM"), and shall also
specify with reasonable particularity (to the extent that the information is
available):

                           (a) the factual basis for the Claim; and



                                      -vi-
<PAGE>   32

                           (b) the amount of the Claim, if known, or if not
known, Exodus's good faith estimate of the reasonably foreseeable maximum amount
of the alleged damages arising from such Claim (which amount may be the amount
of damages claimed by a third party plaintiff in an action brought against
Exodus based on alleged facts, which if true, would result in liability to
Exodus under Section 9.3 of the Asset Purchase Agreement) (the "ESTIMATED
DAMAGES"), the basis thereof and documentation supporting same.

                  As among themselves, the Interested Parties agree that if,
through the fault of Exodus, CyberGuard does not receive a notice of any Claim
in time effectively to contest the determination of any liability susceptible of
being contested, then the liability of CyberGuard to Exodus under Section 9.3 of
the Asset Purchase Agreement shall be reduced by the amount of any losses
incurred by CyberGuard resulting from Exodus's failure to give such notice on a
timely basis.

                  4. RESOLUTION OF NOTICE OF CLAIM AND TRANSFER OF ESCROW FUNDS.
Any Notice of Claim received by CyberGuard and the Escrow Agent, will be
resolved as follows:

                           (a) UNCONTESTED CLAIMS. In the event that CyberGuard
does not either (i) contest a Notice of Claim in writing to the Escrow Agent and
Exodus or (ii) pay the amount demanded (as certified by CyberGuard to the Escrow
Agent in writing), all within 60 days after Notice of Claim was received by the
Escrow Agent (an "UNCONTESTED CLAIM"), then the Escrow Agent will promptly pay
to Exodus that amount of Escrow Funds equal to the amount of the Claim and/or
Estimated Damages specified in the Notice of Claim and will notify CyberGuard of
such transfer.

                           (b) CONTESTED CLAIMS. In the event that CyberGuard
delivers written notice contesting all, or a portion of, a Notice of Claim to
Exodus and the Escrow Agent within the 60-day period provided above, matters
that are subject to Third Party Claims brought against Exodus in a litigation or
arbitration will await the final decision, award or settlement of such
litigation or arbitration and shall be subject to the provisions and procedures
set forth in this Agreement. Matters that are subject to Direct Claims and that
are not resolved by CyberGuard and Exodus as provided for in Section 1(e) herein
will be settled by binding arbitration which will be conducted as provided in
Section 5 herein. Any portion of the Notice of Claim that is not contested will
be resolved as set forth above in Section 4(a). The final decision of the
arbitrator will be furnished to the Escrow Agent, CyberGuard and Exodus in
writing and will constitute a conclusive determination of the issue in question,
binding upon CyberGuard and Exodus. After receipt by the Escrow Agent of written
notice that the Notice of Claim is contested by CyberGuard, the Escrow Agent
will continue to hold in the Escrow Account, Escrow Funds sufficient to cover
such Claim (and Estimated Damages, if any) (notwithstanding the expiration of
the Final Release Date) until (i) execution, and delivery to the Escrow Agent,
of a settlement agreement by Exodus and CyberGuard setting forth a resolution of
the Notice of Claim, or (ii) receipt by the Escrow Agent of a copy of the final
award of the arbitrator or court, as the case may be, together with a written
certificate from Exodus or CyberGuard certifying that the same is a true,
accurate and complete copy of a final decision, award or settlement of such
Notice of Claim pursuant to this Section 4(b).

                           (c) DETERMINATION OF AMOUNT OF CLAIMS. Any amount
owed to Exodus hereunder, as finally determined pursuant to Section 4(a) or (b)
above, will constitute an Uncontested Claim under Section 4(a) hereof.

                           (d) NO EXHAUSTION OF REMEDIES. Exodus need not
exhaust any other remedies that may be available to it but shall proceed
directly in accordance with the provisions of this Agreement. Exodus may
institute claims against the Escrow Funds and in satisfaction thereof may
recover all or a portion of the Escrow Funds, in accordance with the terms of
this Agreement, without making any other claims directly against CyberGuard and
without rescinding or attempting to rescind the transactions consummated
pursuant to





                                      -vii-
<PAGE>   33

the Asset Purchase Agreement. The assertion of any single Claim for
indemnification hereunder will not bar Exodus from asserting other Claims
hereunder.

                           (e) DELIVERIES TO CYBERGUARD. Deliveries to
CyberGuard shall be made to the applicable address set forth in Section 7
hereof, or such other address or bank account as to which the Escrow Agent shall
have received prior written notice from CyberGuard pursuant to Section 7, on
which the Escrow Agent may rely conclusively. All risks of shipment shall be
borne by the intended recipient.

                  5. ARBITRATION. Exodus and CyberGuard agree that they shall
use best reasonable efforts to settle amicably disagreements arising from or in
connection with this Agreement. To this effect, following notice of either to
the other (with copy to the Escrow Agent) of a disagreement, which shall include
any failure to agree upon a matter to be agreed upon (a "DISPUTE") the parties
hereto shall consult and negotiate with one another in good faith an
understanding to reach a just and equitable solution. If those attempts fail
after a period of ten (10) Business Days from the time the parties have been
notified of the Dispute, then every such Dispute shall be settled by arbitration
in accordance with the commercial arbitration rules of American Arbitration
Association then in effect. Any judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction over the subject
matter thereof. The arbitrator shall have the authority to grant any equitable
and legal remedies that would be available in a judicial proceeding instituted
to resolve the Dispute.

                           (a) SELECTION OF ARBITRATOR. The American Arbitration
Association will have the authority to select an arbitrator from a list of
arbitrators who are lawyers familiar with the relevant state contract law;
provided, however, that such lawyers cannot work for a firm then performing
services for either party, that each party will have the opportunity to make
such reasonable objection to any of the arbitrators listed as such party may
wish and that the American Arbitration Association will select the arbitrator
from the list of arbitrators as to whom neither party makes any such objection.
In the event that the foregoing procedure is not followed, each party will
choose one person from the list of arbitrators provided by the American
Arbitration Association (provided that such person does not have a conflict of
interest), and the two persons so selected will select from the list provided by
the American Arbitration Association the person who will act as arbitrator.

                           (b) PAYMENT OF COSTS. Exodus and CyberGuard will bear
the expense of deposits and advances required by the arbitrator in equal
proportions, but either party may advance such amounts, subject to recovery as
an addition or offset to any award. The arbitrator will award to the prevailing
party, as determined by the arbitrator, all costs, fees and expenses related to
the arbitration, including reasonable fees and expenses of attorneys,
accountants and other professionals incurred by the prevailing party. Exodus and
CyberGuard shall pay in equal proportions all costs and expenses of the Escrow
Agent in connection with any arbitration.

                           (c) BURDEN OF PROOF. For any Dispute submitted to
arbitration, the burden of proof will be as it would be if the claim were
litigated in a judicial proceeding.

                           (d) AWARD. Upon the conclusion of the arbitration
proceedings hereunder, the arbitrator will render findings of fact and
conclusions of law and a written opinion setting forth the basis and reasons for
any decision reached and will deliver such documents to each party to this
Agreement along with a signed copy of the award.

                           (e) TERMS OF ARBITRATION. The arbitrator chosen in
accordance with these provisions will not have the power to alter, amend or
otherwise affect the terms of these arbitration provisions or the provisions of
this Agreement.








                                     -viii-
<PAGE>   34

                           (f) EXCLUSIVE REMEDY. Except as specifically
otherwise provided in this Agreement, arbitration will be the sole and exclusive
remedy to Exodus or CyberGuard for any Dispute arising out of this Agreement.

                  6.       LIMITATION OF ESCROW AGENT'S LIABILITY.

                           (a) The Escrow Agent shall only have those duties as
are expressly set forth in this Agreement, and no implied duties shall be read
into this Agreement or the rest of the Escrow Agreement. The Escrow Agent will
incur no liability with respect to any action taken or suffered by it in
reliance upon any notice, direction, instruction, consent, statement or other
document believed by it to be genuine and duly authorized, nor for any other
action or inaction, except its own willful misconduct or gross negligence. The
Escrow Agent will not be responsible for the validity or sufficiency of this
Agreement. In all questions arising under this Agreement, the Escrow Agent may
rely on the advice or opinion of counsel, including in-house counsel, and for
anything done, omitted or suffered in good faith by the Escrow Agent based on
such advice or opinion, the Escrow Agent will not be liable to anyone. The
Escrow Agent will not be required to take any action hereunder involving any
expense unless the payment of such expense is made or provided for in a manner
satisfactory to it. The Escrow Agent shall not be obligated to take any legal
action or other action hereunder which might, in its judgment, involve any
expense or liability unless it shall have been furnished with acceptable
indemnification.

                           (b) In the event conflicting demands are made or
conflicting notices are served upon the Escrow Agent with respect to the Escrow
Account, the Escrow Agent will have the absolute right, at the Escrow Agent's
election, to do either or both of the following: (i) resign so a successor can
be appointed pursuant to Section 10 hereof or (ii) file a suit in interpleader
and obtain an order from a court of competent jurisdiction requiring the parties
to interplead and litigate in such court their several claims and rights among
themselves. In the event such interpleader suit is brought, the Escrow Agent
will thereby be fully released and discharged from all further obligations
imposed upon it under this Agreement, and Exodus will pay the Escrow Agent
(subject to reimbursement from CyberGuard pursuant to Section 9 hereof) all
costs, expenses and reasonable attorney's fees expended or incurred by the
Escrow Agent pursuant to the exercise of Escrow Agent's rights under this
Section 6 (such costs, fees and expenses will be treated as extraordinary fees
and expenses for the purposes of Section 9 hereof).

                           (c) In no event shall the Escrow Agent be liable for
any indirect, punitive, special or consequential damages, or any amount in
excess of the value of the pledged collateral (as of the date of the action or
omission giving rise to liability).

                           (d) The Escrow Agent shall in no instance be under
any duty to give any property held by it hereunder any greater degree of care
than it gives its own similar property. In no event shall the Escrow Agent have
any obligation to advance or risk funds.

                           (e) The Escrow Agent shall not be deemed to have
notice of any fact, claim or demand with respect hereto unless actually known by
an officer charged with responsibility for administering this Agreement or
unless in writing received by the Escrow Agent and making specific reference to
this Agreement.

                           (f) All indemnifications contained in this Agreement
shall survive the resignation or removal of the Escrow Agent, and shall survive
the termination of this Agreement.

                           (g) The Escrow Agent is not responsible for the
recitals appearing in this Agreement. The recitals shall be deemed to be
statements of the other parties to this Agreement.




                                      -ix-
<PAGE>   35

                           (h) The Escrow Agent has no responsibility for the
sufficiency of this Agreement for any purpose. Without limiting the foregoing,
if any security interest is referred to herein, the Escrow Agent shall have no
responsibility for, and makes no representation or warranty as to, the creation,
attachment or perfection of any such security interest or the sufficiency of
this Agreement therefor.

                           (i) Nothing in this Agreement shall obligate the
Escrow Agent to qualify to do business or act in any jurisdiction in which it is
not presently qualified to do business, or be deemed to impose upon the Escrow
Agent the duties of a trustee. The duties of the Escrow Agent under this
Agreement are strictly ministerial in nature.

                           (j) In no event shall the Escrow Agent have any
liability for any failure or inability of any of the other parties to perform or
observe its duties under the Agreement, or by reason of a breach of this
Agreement by either of the other parties hereto. In no event shall the Escrow
Agent be obligated to take any action against any of the other parties to compel
performance hereunder.

                           (k) The Escrow Agent shall in no instance be
obligated to commence, prosecute or defend any legal proceedings in connection
herewith. The Escrow Agent shall be authorized and entitled, however, in any
instance to commence, prosecute or defend any legal proceedings in connection
herewith, including without limitation any proceeding it may deem necessary to
resolve any matter or dispute, to obtain a necessary declaration of rights, or
to appoint a successor upon resignation (and after failure by Exodus to appoint
a successor, as provided hereinafter).

                           (l) In the event of any ambiguity or uncertainty
under this Agreement, or in any notice, instruction, or other communication
received by the Escrow Agent hereunder, the Escrow Agent may, in its discretion,
refrain from taking action, and may retain the pledged collateral until and
unless it receives written instruction signed by Exodus and CyberGuard which
eliminates such uncertainty or ambiguity.

                           (m) The Escrow Agent shall have no liability for the
actions or omissions of any book-entry depository, transfer agent, nominee,
correspondent, subagent or subcustodian. The Escrow Agent shall be permitted to
use the services of any recognized securities depository or clearing agent, such
as (without limitation) The Depository Trust Company and the Federal Reserve
Bank book-entry securities system, as applicable, in connection with any
securities or investments held hereunder.

                           (n) The Escrow Agent shall not be responsible or
liable for delays or failures in performance resulting from acts beyond its
control. Such acts shall include but not be limited to acts of God, strikes,
lockouts, riots, acts of war, epidemics, laws or governmental regulations
changes or superimposed after the fact, fire, communication line failures, power
failures, computer viruses, earthquakes or other disasters, or to unavailability
of Federal Reserve Bank wire or telex facilities.

                  7. NOTICES. Any notice, certificate, consent, determination or
other communication required or permitted to be given or made under this
Agreement shall be in writing and shall be effectively given and made if (i)
delivered personally, (ii) sent by prepaid courier service or mail, or (iii)
sent prepaid by fax and receipt thereof is confirmed, in each case to the
applicable address set out below:

                           (i)      if to CyberGuard, to:

                                    CyberGuard Corporation
                                    2000 West Commercial Blvd., Suite #200
                                    Ft. Lauderdale, FL 33309











                                      -x-
<PAGE>   36

                     Attention:  Brian Foremny, General Counsel
                     Telephone:  (954) 958-3900
                     Facsimile:  (954) 958-3853

                     with a copy to:

                     Stearns Weaver Miller Weissler Alahadeff & Sitterson, P.A.
                     150 West Flagler Street
                     Miami, FL 33130
                     Attention:  Teddy D. Klinghoffer, Esq.
                     Telephone:  (305) 789-3200
                     Facsimile:  (305) 789-3395

              (ii)   if to Exodus, to:

                     Exodus Communications, Inc.
                     2650 San Tomas Expressway
                     Santa Clara, CA  95051
                     Attention:  Adam W. Wegner, General Counsel
                     Telephone:  (408) 346-2200
                     Facsimile:  (408) 346-2206

                     with a copy to:

                     Fenwick & West LLP
                     Two Palo Alto Square
                     Palo Alto, CA 94306
                     Attention:  Eileen Duffy Robinett, Esq.
                     Telephone:  (415) 858-7271
                     Facsimile:  (415) 494-1417


























                                      -ix-
<PAGE>   37

                (iii)    If to the Escrow Agent, to:

                         State Street Bank and Trust Company of California, N.A.
                         633 W. 5th Street, 12th Floor
                         Los Angeles, CA  90071
                         Attention:  Corporate Trust Administration (Exodus
                                     Communications, Inc. 1998 escrow)
                         Telephone:  (213) 362-7373
                         Facsimile:  (213) 362-7357

or to such other address as a party may have furnished to the other parties by
written notice given in accordance with this Section 7.

                  Any such communication so given or made shall be deemed to
have been given or made and to have been received on the day of delivery if
delivered, or on the day of faxing or sending by other means of recorded
electronic communication, provided that such day in either event is a Business
Day and the communication is so delivered, faxed or sent before 4:30 p.m. on
such day. As used herein, a "BUSINESS DAY" shall be any day which is not a
Saturday, Sunday or federal holiday. Otherwise, such communication shall be
deemed to have been given and made and to have been received on the next
following Business Day. Any such communication sent by mail shall be deemed to
have been given and made and to have been received on the fifth Business Day
following the mailing thereof; provided however that no such communication shall
be mailed during any actual or apprehended disruption of postal services. Any
such communication given or made in any other manner shall be deemed to have
been given or made and to have been received only upon actual receipt; provided
that for any notice or other writing required to be delivered to the Escrow
Agent, such notice or other writing shall only be deemed delivered when actually
received.

                  Any party may from time to time change its address under this
Section 7 by notice to the other party given in the manner provided by this
Section.

                  8.       GENERAL.

                           (a) GOVERNING LAW, ASSIGNS. This Agreement will be
governed by and construed in accordance with the internal laws of the State of
Delaware without regard to conflict-of-law principles and will be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and permitted assigns.

                           (b) COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.

                           (c) ENTIRE AGREEMENT. Except as otherwise set forth
in the Asset Purchase Agreement, this Agreement constitutes the entire
understanding and agreement of the Interested Parties with respect to the
subject matter of this Agreement and supersedes all prior agreements or
understandings, written or oral, between the parties with respect to the subject
matter hereof. The Escrow Agent's duties and responsibilities are governed
solely by this Agreement.

                           (d) WAIVERS. No waiver by any party hereto of any
condition or of any breach of any provision of this Agreement will be effective
unless in writing. No waiver by any party of any such condition or breach, in
any one instance, will be deemed to be a further or continuing waiver of any
such condition or breach or a waiver of any other condition or breach of any
other provision contained herein.







                                      -xii-
<PAGE>   38

                  9.       FEES AND EXPENSES AND INDEMNITY.

                           (a) All fees and expenses of the Escrow Agent
incurred in the acceptance of, and legal fees and expenses incurred in the
preparation of, this Agreement, and in the ordinary course of performing its
responsibilities hereunder will be paid by Exodus upon receipt of a written
invoice by the Escrow Agent. Any extraordinary fees and expenses, including
without limitation any fees or expenses incurred by the Escrow Agent in
connection with a dispute over the distribution of Escrow Funds or the validity
of a Notice of Claim, will be paid 50% by Exodus and 50% by CyberGuard.
CyberGuard's liability for the fees and expenses of the Escrow Agent may be paid
by Exodus and recovered as a Claim hereunder out of the Escrow Funds. To the
extent that insufficient Escrow Funds remain to cover CyberGuard's liability for
the fees and expenses of the Escrow Agent, Exodus shall indemnify the Escrow
Agent for such fees and expenses.

                           (b) Each of Exodus and CyberGuard, jointly and
severally, hereby covenants and agrees to indemnify the Escrow Agent, its
directors, officers, agents and employees, for, and to defend and hold them
harmless from and against, any and every loss, liability, damage, claim, cost
and expense of any nature incurred or suffered by the Escrow Agent and arising
out of or in connection with this Agreement or the administration of this
Agreement or the performance or observance by the Escrow Agent of its
responsibilities or services under this Agreement (including but not limited to
attorneys fees and other costs and expenses of defending or preparing to defend
against any claim or liability), unless and except to the extent such loss,
liability, damage, cost or expense shall be caused by the Escrow Agent's own
willful misconduct or gross negligence. The Escrow Agent shall be entitled to
reimbursement on demand for all expenses incurred in connection with the
administration of this Agreement or the escrow created hereby which are in
excess of its compensation for normal services hereunder, including, without
limitation, payment of any legal fees and expenses incurred by the Escrow Agent
in connection with the resolution of any claim by any party hereunder.

                           (c) Each of Exodus and CyberGuard, jointly and
severally, agree to assume any and all obligations imposed now or hereafter by
any applicable tax law with respect to the payment of pledged collateral under
this Agreement, and, without limiting the generality of Section 9(b) above,
hereby agree to indemnify and hold the Escrow Agent harmless from and against
any taxes, additions for late payment, interest, penalties and other expenses,
that may be assessed against the Escrow Agent on any such payment or other
activities under this Agreement. Exodus and CyberGuard undertake to instruct the
Escrow Agent in writing with respect to the Escrow Agent's responsibility for
withholding and other taxes, assessments or other governmental charges,
certifications and governmental reporting in connection with its acting as the
Escrow Agent under this Agreement. Exodus and CyberGuard, jointly and severally,
each agrees to indemnify and hold the Escrow Agent harmless from any liability
on account of taxes, assessments or other governmental charges to which the
Escrow Agent may be or become subject in connection with or which arises out of
this Agreement, including costs and expenses (including reasonable legal fees),
interest and penalties.

                  10. SUCCESSOR ESCROW AGENT. In the event the Escrow Agent
becomes unavailable or unwilling to continue in its capacity herewith, the
Escrow Agent may resign and be discharged from its duties or obligations
hereunder by giving notice of its resignation to the parties to this Agreement,
specifying a date not less than ten days following such notice date of when such
resignation will take effect. Exodus will designate a successor Escrow Agent
prior to the expiration of such ten-day period by giving written notice to the
Escrow Agent and CyberGuard. Exodus may appoint a successor Escrow Agent without
the consent of CyberGuard so long as such successor is a bank (or, in the case
of a subsidiary of a bank holding company, its holding company as an
institution) with assets of at least $50,000,000, and may appoint any other
successor Escrow Agent with the consent of CyberGuard, which will not be
unreasonably withheld. The Escrow Agent will promptly deliver the Escrow Funds
to such designated successor. If no successor Escrow Agent is named by Exodus
and CyberGuard, the Escrow Agent may apply to a court of competent jurisdiction
for appointment of a successor Escrow Agent.








                                     -xiii-
<PAGE>   39

                  11. LIMITATION OF RESPONSIBILITY. The Escrow Agent's duties
are limited to those set forth in this Agreement and applicable laws, and Escrow
Agent is not charged with knowledge of or any duties or responsibilities in
connection with any other document or agreement including without limitation the
Asset Purchase Agreement.

                  12. AMENDMENT. This Agreement may be amended by the written
agreement of Exodus, the Escrow Agent and CyberGuard, provided that, if the
Escrow Agent does not agree to an amendment agreed upon by Exodus and CyberGuard
(except an amendment adversely affecting the rights or protections of the Escrow
Agent), the Escrow Agent will resign and Exodus will appoint a successor Escrow
Agent in accordance with Section 10 above.

                  13. DISPUTE RESOLUTION RELATING TO DISPUTES INVOLVING THE
ESCROW AGENT. It is understood and agreed that should any dispute arise with
respect to the delivery, ownership, right of possession, and/or disposition of
the Escrow Funds, or should any claim be made upon such Escrow Funds by a third
party, the Escrow Agent upon receipt of written notice of such dispute or claim
by the parties hereto or by a third party, is authorized and directed to retain
in its possession without liability to anyone, all or any of said Escrow Funds
until such dispute shall have been settled either by the mutual written
agreement of the parties involved or by a final order, decree or judgment of
court in the United States of America, the time for perfection of an appeal of
such order, decree or judgment having expired. The Escrow Agent may, but shall
be under no duty whatsoever to, institute or defend any legal proceedings which
relate to the Escrow Funds.

                  14. CONSENT TO JURISDICTION AND SERVICE RELATING TO DISPUTES
INVOLVING THE ESCROW AGENT. Exodus and CyberGuard hereby absolutely and
irrevocably consent and submit to the jurisdiction of the courts in the State of
California (and of any Federal court located in said state) in connection with
any actions or proceedings brought against Exodus and CyberGuard by the Escrow
Agent arising out of or relating to this Escrow Agreement. In any such action or
proceeding, Exodus and CyberGuard hereby absolutely and irrevocably waive
personal service of any summons, complaint, declaration or other process and
hereby absolutely and irrevocably agree that the service thereof may be made by
certified or registered first-class mail directed to Exodus and CyberGuard, as
the case may be, as their respective addresses in accordance with Section 7
hereof.

                  15. REPRODUCTION OF DOCUMENTS. This Agreement and all
documents relating hereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed and (b) certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, optical disk, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible as evidence.

                  16.      TAX REPORTING MATTERS.

                           (a) The Interested Parties agree to provide the
Escrow Agent with certified tax identification numbers for each of them by
furnishing appropriate forms W-9 (or Forms W-8, in the case of non-U.S. persons)
and other forms and documents that the Escrow Agent may reasonably request
(collectively, "TAX REPORTING DOCUMENTATION") to the Escrow Agent within 30 days
after the date hereof. The parties hereto understand that, if such Tax Reporting
Documentation is not so certified to the Escrow Agent, the Escrow Agent may be
required by the Internal Revenue Code, as it may be amended from time to time,
to withhold a portion of





                                      -37-
<PAGE>   40

any interest or other income earned on the investment of monies or other
property held by the Escrow Agent pursuant to this Agreement.

                           (b) The Escrow Agent need not make any distribution
of all or any portion of the Escrow Funds to any person until such person has
furnished to the Escrow Agent such Tax Reporting Documentation as the Escrow
Agent may reasonably require.

         [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]


































                                      -xv-

<PAGE>   41


                  IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.



EXODUS COMMUNICATIONS, INC.                     CYBERGUARD CORPORATION



By:                                             By:
   --------------------------                      --------------------------
        Richard S. Stoltz
        Chief Operating Officer and
          Chief Financial Officer


EC ACQUISITIONS CORP.                             STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., AS                        ESCROW AGENT

By:                                               By:
   --------------------------                        --------------------------
        Adam W. Wegner                               Mark D. Henson
        President                                    Assistant Vice President



































                                     -xvi-
<PAGE>   42


                                    AGREEMENT

                             Dated October 2, 1998,

                                      among

                             CYBERGUARD CORPORATION,

                               ARCA SYSTEMS, INC.

                                       and

                           EACH OF THE SHAREHOLDERS OF
                CYBERGUARD CORPORATION WHO ARE SIGNATORIES HERETO





                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>
                                                                                                  Page
                                                                                                  ----
<S>                                                                                                 <C>
ARTICLE I         DEFINITIONS.......................................................................2



ARTICLE II        CLOSING...........................................................................3



ARTICLE III       REPRESENTATIONS AND WARRANTIES OF CYBERGUARD......................................3

     3.1 Organization, Standing and Power...........................................................3

     3.2 Authorization of Agreement.................................................................3

     3.3 No Violation or Conflict...................................................................3

     3.4 Consent or Approval of Governmental Authorities............................................3

     3.5 Broker and Finders.........................................................................3

     3.6 Litigation.................................................................................4
</TABLE>





                                     -xvii-
<PAGE>   43

<TABLE>
<CAPTION>


<S>                                                                                                <C>
</TABLE>


<PAGE>   44




                                    AGREEMENT

         This Agreement is entered into as of October 2, 1998, by and among
CyberGuard Corporation, a Florida corporation ("CYBERGUARD"), ARCA Systems,
Inc., a California corporation ("ARCA"), and each of the individuals who are
signatories hereto (sometimes hereinafter referred to individually as a
"TRANSFEROR" and collectively as the "TRANSFERORS").

                             PRELIMINARY STATEMENTS

         Certain of the Transferors are parties to an Employment Agreement,
dated as of June 1, 1998, with ARCA and CyberGuard (the "EMPLOYMENT
AGREEMENTS"), which, among other things, by their terms provide for restrictions
on such Transferors' rights to compete against ARCA, which Employment Agreements
were entered into in connection with CyberGuard's acquisition of ARCA pursuant
to the Merger Agreement (as defined below).

         Each of William F. Wilson, Michael L Weidner and R. Kenneth Bauer is
also a party to a Restrictive Covenant Agreement, dated as of June 1, 1998, with
ARCA and CyberGuard ("RESTRICTIVE COVENANT AGREEMENTS"), which also, among other
things, by their terms provide for restrictions on the right of Messrs. Wilson,
Weidner and Bauer to compete against ARCA, which Restrictive Covenant Agreements
were entered into in connection with CyberGuard's acquisition of ARCA pursuant
to the Merger Agreement.

         Each of the Transferors is a party to an Employee Agreement, dated as
of June 1, 1998, with CyberGuard ("CONFIDENTIALITY AND WORKS-MADE-FOR-HIRE
AGREEMENTS") which Agreements were entered into in connection with CyberGuard's
acquisition of ARCA pursuant to the Merger Agreement.

         The Transferors desire to terminate the Employment Agreements, the
Restrictive Covenant Agreements and the Confidentiality and Works-Made-For-Hire
Agreements so that they may pursue business and employment opportunities with
Exodus and its Affiliates; and, but for CyberGuard's entering into this
Agreement and consenting to certain other transactions, the terms of the
foregoing documents would by their terms prohibit the Transferors from pursuing
such business and employment opportunities; and theparties further acknowledge
that but for the Transferors entering into this Agreement (and granting the
general release of CyberGuard contained herein), CyberGuard would not enter into
or permit the occurrence of such other transactions and such other transactions
would not occur.

         In consideration of CyberGuard entering into this Agreement, the
Transferors are, among other things, agreeing to terminate all of their
CyberGuard Options (as defined below), agreeing to certain restrictive
covenants, agreeing to terminate the Registration Agreement (as defined below)
and agreeing to grant CyberGuard a general release.

         In consideration of the Transferors entering into this Agreement,
CyberGuard is hereby terminating the Employments Agreements, the Restrictive
Covenant Agreements, the Confidentiality and Works-Made-For-Hire Agreements and
the Escrow and Pledge Agreement entered into in connection with the Merger
Agreement (the "ESCROW AND PLEDGE AGREEMENT").



                                      -xix-
<PAGE>   45

                                    AGREEMENT

         In consideration of the Preliminary Statements and the respective
covenants, representations and warranties contained in this Agreement, the
parties agree as set forth below, and agree that the Preliminary Statements are
incorporated herein.

                                    ARTICLE I

                                   DEFINITIONS

         In addition to terms defined elsewhere in this Agreement, the following
terms when used in this Agreement shall have the meanings indicated below:

         "AFFILIATE" has the meaning specified in Rule 144 promulgated by the
Commission under the Securities Act.

         "AGREEMENT" means this Agreement together with all exhibits and
schedules referred to herein.

         "CLAIM" has the meaning set forth in SECTION 5.5.

         "CLOSING" has the meaning specified in ARTICLE II of this Agreement.

         "CLOSING DATE" has the meaning specified in ARTICLE II of this
Agreement.

         "CONFIDENTIALITY AND WORKS-MADE-FOR HIRE AGREEMENT" has the meaning set
forth in the Preliminary Statements.

         "CYBERGUARD COMMON STOCK" means the common stock of CyberGuard, par
value $.01 per share.

         "CYBERGUARD OPTIONS" means the options to acquire CyberGuard Common
Stock referenced in SECTION 4.2 of this Agreement.

         "EMPLOYMENT AGREEMENT" has the meaning set forth in the Preliminary
Statements.

         "EXODUS" has the meaning set forth in the Preliminary Statements.

         "INDEMNIFIED PARTY" has the meaning specified in SECTION 5.8(C) of this
Agreement.

         "INDEMNIFYING PARTY" has the meaning specified in SECTION 5.8(C) of
this Agreement.

         "LOSSES" has the meaning specified in SECTION 5.8(A) of this Agreement.

         "MERGER AGREEMENT" means the Agreement and Plan of Merger, dated as of
May 29, 1998, to which ARCA, CyberGuard and certain other Persons are parties.

         "PERSON" means any natural person, corporation, unincorporated
organization, partnership, association, joint stock company, joint venture,
trust or government, or any agency or political subdivision of any government,
or any other entity.

         "RESTRICTIVE COVENANT AGREEMENT" has the meaning set forth in the
Preliminary Statements.

         "SUBSIDIARY" of any Person means any Person, whether or not
capitalized, in which such Person owns, directly or indirectly, an equity
interest of 50% or more, or any Person which may be controlled, directly or
indirectly, by such Person, whether through the ownership of voting securities,
by contract, or otherwise.



                                      -20-
<PAGE>   46

         "TRANSACTIONS" has the meaning specified in SECTION 4.8.

                                   ARTICLE II

                                     CLOSING

         The consummation of the transactions contemplated by this Agreement
(the "CLOSING") shall take place simultaneously with the execution and delivery
of this Agreement. The date of this Agreement shall be referred to as the
"CLOSING DATE."

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF CYBERGUARD

         CyberGuard hereby represents and warrants to the Transferors as
follows:

         III.1 ORGANIZATION, STANDING AND POWER. Each of CyberGuard and ARCA is
a corporation duly incorporated, validly existing and in good standing under the
laws of its state of incorporation, and has all requisite right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.

         III.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement by CyberGuard and ARCA the consummation by them of
the transactions contemplated hereby have been duly and effectively authorized
by all requisite corporate action. This Agreement constitutes the legal, valid
and binding obligation of CyberGuard and ARCA, enforceable against them in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights and general principles of equity.

         III.3 NO VIOLATION OR CONFLICT. The execution, delivery and performance
of this Agreement by CyberGuard and ARCA, and the consummation by them of the
transactions being effectuated hereby, and compliance by CyberGuard with the
provisions hereof do not and will not violate or conflict with any provision of
law or regulation, or any writ, order or decree of any court, governmental or
regulatory authority or agency, or any term or provision of the Articles of
Incorporation or Bylaws of CyberGuard.

         III.4 CONSENT OR APPROVAL OF GOVERNMENTAL AUTHORITIES. No consent,
approval or authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state or local governmental authority
or administrative agency is required in connection with the execution, delivery
or performance by CyberGuard or ARCA of this Agreement or the consummation by
CyberGuard of the transactions being effectuated hereby.

         III.5 BROKER AND FINDERS. Neither CyberGuard nor any of its
Subsidiaries has employed any broker or finder and none of them have incurred
nor will incur any broker's, finder's or similar fees, commissions or broker's
or finder's expenses in connection with the transactions contemplated by this
Agreement, except that an investment banking firm has been retained to render a
fairness opinion to CyberGuard at CyberGuard's expense.

         III.6 LITIGATION. Except for claims arising directly or indirectly as a
result of any class action lawsuits filed against CyberGuard or from the subject
matter underlying such lawsuits, CyberGuard has not received any written notice
of any actions, suits, proceedings or investigations pending, or directly or
indirectly threatened, in any court or before any governmental agency or
instrumentality which would be reasonably likely to have a material adverse
impact on the transactions contemplated hereby.





                                      -21-
<PAGE>   47

                                   ARTICLE IV

                REPRESENTATIONS AND WARRANTIES OF THE TRANSFERORS

         In order to induce CyberGuard and ARCA to enter into this Agreement and
to consummate the transactions contemplated hereby, each of the Transferors
hereby severally but not jointly represents and warrants to CyberGuard as
follows:

         IV.1 AUTHORITY; LEGAL, VALID AND BINDING AGREEMENT. Such Transferor has
full and unrestricted right, power and authority to enter into and consummate
the transactions contemplated hereby. This Agreement and all other agreements
executed by such Transferor in connection with the transactions contemplated
hereunder constitute the legal, valid and binding obligations of such
Transferor, enforceable in accordance with their respective terms, except to the
extent that enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights and
general principles of equity.

         IV.2 OPTIONS. Such Transferor owns the CyberGuard Options (and no other
options to acquire CyberGuard Common Stock) as described on SCHEDULE 4.2, free
and clear of any and all liens, claims, charges, security interests, voting
agreements or encumbrances of any nature whatsoever, and such Transferor has not
transferred any interest in any such CyberGuard Options of any nature whatsoever
to any third party. No third party has any right, title or interest in any of
such Transferor's CyberGuard Options.

         IV.3 LITIGATION. Except as set forth on SCHEDULE 4.3, such Transferor
has not received any notice of any actions, suits, proceedings or investigations
pending, or directly or indirectly threatened, in any court or before any
governmental agency or instrumentality which could have any adverse impact on
the transactions contemplated hereby.

         IV.4 NO VIOLATION OR CONFLICT. The execution, delivery and performance
of this Agreement by such Transferor and the consummation by such Transferor of
the transactions contemplated hereby, and compliance by such Transferor with the
provisions hereof, do not and will not violate or conflict with any provision of
law or regulation, or any writ, order or decree of any court, governmental or
regulatory authority or agency, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights and general principles of equity.

         IV.5 CONSENT OR APPROVAL OF GOVERNMENTAL AUTHORITIES. Except as set
forth on SCHEDULE 4.5, no consent, approval or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority or administrative agency is
required in connection with the execution, delivery or performance by such
Transferor of this Agreement or any agreement, instrument or document
contemplated hereby or the consummation by such Transferor of the transactions
contemplated hereby and thereby.

         IV.6 BROKERS AND FINDERS. Such Transferor has not employed any broker
or finder and has not incurred nor will incur any broker's, finder's or similar
fees, commissions or broker's or finder's expenses in connection with the
transactions contemplated by this Agreement.

         IV.7 NO PRIOR AGREEMENT BY SUCH TRANSFEROR. There is no written or oral
agreement or understanding with respect to the disposition by such Transferor of
any CyberGuard Options, any portion thereof, or any rights attendant or relating
thereto, other than this Agreement. Such Transferor has never conveyed,
hypothecated or otherwise transferred or liened any of his or her right, title
and/or interest in or to (i) any Claims, (ii) his or her Employment Agreement,
Restrictive Covenant Agreement or Confidentiality and
Works-Made-For-Hire-Agreement or (iii) the Escrow and Pledge Agreement. To such
Transferor's knowledge,





                                      -22-
<PAGE>   48

after investigation, all of the representations and warranties of CyberGuard set
forth in that certain Asset Purchase Agreement, of even date herewith, to which
CyberGuard and Exodus are parties are true and correct. Such Transferor has not
incurred any liability or obligation of any nature whatsoever on behalf of ARCA
or CyberGuard or which binds ARCA or CyberGuard and which is not being assumed
by Exodus in connection herewith or set forth on Schedule 4.7 hereto.

         IV.8 HIGH DEGREE OF RISK AND NATURE OF TRANSACTIONS; INDEPENDENT LEGAL
COUNSEL AND BUSINESS AND TAX ADVISORS. EACH TRANSFEROR HAS REVIEWED THIS
AGREEMENT AND ALL OF THE AGREEMENTS AND INSTRUMENTS EXECUTED IN CONNECTION
HEREWITH AND ALL OF THE AGREEMENTS AND RELATED ITEMS RELATING TO THE
TRANSACTIONS CONTEMPLATED IN CONNECTION HEREWITH AND THEREWITH BEING EFFECTUATED
ON THE DATE HEREOF (ALL OF THE FOREGOING HEREINAFTER SOMETIMES REFERRED TO AS
THE "TRANSACTIONS"), INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH ON SCHEDULE
4.8 (COLLECTIVELY, THE "TRANSACTION DOCUMENTS"). EACH TRANSFEROR HAS BEEN
STRONGLY URGED AND HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF HIS OR HER OWN
INDEPENDENT LEGAL COUNSEL AND BUSINESS AND TAX ADVISORS BEFORE ENTERING INTO ANY
OF THE TRANSACTION DOCUMENTS. EACH TRANSFEROR BELIEVES THAT THE TRANSACTIONS ARE
FAIR AND REASONABLE TO HIM OR HER IN ALL RESPECTS (INCLUDING, BUT NOT LIMITED
TO, THE PAYMENT BY EXODUS TO CYBERGUARD OF MORE THAN $3 MILLION) AND CONSENTS
THERETO AND BELIEVES THAT THE TRANSACTIONS ARE IN HIS OR HER OWN BEST INTEREST.
EACH TRANSFEROR ACKNOWLEDGES THAT NEITHER CYBERGUARD, ARCA NOR ANY OF THEIR
AFFILIATES, OFFICERS, DIRECTORS, AGENTS OR EMPLOYEES NOR ANY OTHER TRANSFEROR
SHALL HAVE ANY LIABILITY OR RESPONSIBILITY OF ANY NATURE WHATSOEVER FOR ANY ACT
OR OMISSION BY EXODUS OR ANY OF ITS AFFILIATES OR THE FAILURE OF EXODUS OR ANY
OF ITS AFFILIATES TO COMPLY WITH ANY OBLIGATIONS UNDER ANY OF THE TRANSACTIONS,
INCLUDING, BUT NOT LIMITED TO, ANY MATERIAL MISSTATEMENT OR OMISSION BY EXODUS
OR ANY AFFILIATE THEREOF. EACH TRANSFEROR ACKNOWLEDGES THAT NONE OF CYBERGUARD,
ARCA, EXODUS NOR ANY OTHER TRANSFEROR NOR ANY OF THEIR RESPECTIVE AFFILIATES OR
AGENTS HAS MADE TO HIM OR HER ANY REPRESENTATION OR WARRANTY AS TO THE TAX OR
OTHER CONSEQUENCES TO SUCH TRANSFEROR OF THE TRANSACTIONS. EACH TRANSFEROR
UNDERSTANDS THE HIGHLY SPECULATIVE NATURE OF AND SUBSTANTIAL RISKS INVOLVED IN
THE TRANSACTIONS, AND HAS BEEN STRONGLY URGED TO DISCUSS THE SAME WITH HIS OR
HER OWN INDEPENDENT LEGAL COUNSEL AND BUSINESS AND TAX ADVISORS. IN ADDITION TO
SUCH TRANSFEROR'S FAMILIARITY WITH ARCA AND CYBERGUARD AND THEIR OPERATIONS,
SUCH TRANSFEROR HAS BEEN OFFERED THE OPPORTUNITY TO ASK QUESTIONS OF AND RECEIVE
ANSWERS FROM ARCA AND CYBERGUARD AND EXODUS AND HAS ACCESS TO INFORMATION SUCH
TRANSFEROR HAS DEEMED MATERIAL IN DECIDING WHETHER TO CONSENT TO THE
TRANSACTIONS. EACH TRANSFEROR ACKNOWLEDGES THAT THE CONSIDERATION TO BE RECEIVED
BY HIM OR HER IN CONNECTION WITH THE TRANSACTIONS WAS DETERMINED IN ARMS LENGTH
NEGOTIATIONS AMONG THE PARTIES. EACH TRANSFEROR IS FULLY SATISFIED AS TO THE
CONSIDERATION BEING RECEIVED BY SUCH TRANSFEROR IN CONNECTION WITH THE
TRANSACTIONS. EACH TRANSFEROR ACKNOWLEDGES THAT HE OR SHE SHALL HAVE NO CLAIMS,
CAUSES OF ACTION OR OTHER RIGHTS OF ANY NATURE WHATSOEVER AGAINST CYBERGUARD OR
ANY OF ITS AFFILIATES IN CONNECTION WITH ANY OF THE TRANSACTIONS AS THEY RELATE
TO ACTS OR OMISSIONS OF ANY PARTY OTHER THAN CYBERGUARD OR ARCA (EXCEPT ACTS OF
ANY EMPLOYEE OF ARCA) OR IN CONNECTION WITH ANY TRANSACTION WHICH IS NOT
EFFECTUATED BY THIS AGREEMENT. EACH TRANSFEROR EXPRESSLY ACKNOWLEDGES THAT HE OR
SHE SHALL HAVE ABSOLUTELY NO CLAIM AGAINST CYBERGUARD OR ANY OF ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR AFFILIATES OF ANY NATURE WHATSOEVER FOR ANY ACT
OR FAILURE TO ACT BY EXODUS OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
OR AFFILIATES IN CONNECTION WITH ANY OF THE TRANSACTIONS AND EXPRESSLY AGREES
NOT TO BRING ANY CLAIM OR ACTION AGAINST CYBERGUARD OR ANY OF ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR AFFILIATES IN CONNECTION THEREWITH, WHETHER SUCH
CLAIMS BE FOR BREACH OF REPRESENTATIONS AND WARRANTIES, BREACH OF COVENANT,
SECURITIES LAWS VIOLATIONS, FRAUD, BREACH OF CONTRACT, TORT OR OTHERWISE. EACH
TRANSFEROR FURTHER ACKNOWLEDGES THAT HE OR SHE FULLY UNDERSTANDS THE PROVISIONS
RELATING TO AND THE RAMIFICATIONS OF GRANTING THE RELEASE CONTAINED IN SECTION
5.5 HEREOF AND HAS BEEN STRONGLY URGED TO FULLY DISCUSS SAME WITH HIS OR HER
INDEPENDENT LEGAL COUNSEL AND BUSINESS AND TAX ADVISORS. EACH PERSON THAT
RECEIVED CYBERGUARD COMMON STOCK UNDER THE MERGER AGREEMENT IS A NAMED SIGNATORY
TO THIS AGREEMENT OR A CLAIMS AND STOCK PURCHASE AGREEMENT. EACH TRANSFEROR HAS
MADE HIS OR HER OWN INDEPENDENT EVALUATION OF THE VALUE OF THE CONSIDERATION
PAYABLE TO HIM OR HER AND THE OTHER TERMS AND CONDITIONS OF THE TRANSACTIONS
WITHOUT RELIANCE ON ANY PARTY OTHER THAN TO THE EXTENT HE OR SHE HAS RELIED ON
HIS OR HER OWN INDEPENDENT LEGAL COUNSEL AND BUSINESS AND TAX ADVISORS.






                                      -23-
<PAGE>   49

                                    ARTICLE V

                              ADDITIONAL AGREEMENTS

         V.1 TERMINATION OF CYBERGUARD OPTIONS. Each of the Transferors hereby
agrees that all options to acquire shares of CyberGuard Common Stock owned by
him or her ("CYBERGUARD OPTIONS"), including, but not limited to, those
referenced on SCHEDULE 5.1, are hereby terminated and null and void.

         V.2 RESTRICTIVE COVENANTS.

                  V.2.1 CONFIDENTIAL INFORMATION; COOPERATION. Transferor agrees
not to disclose at any time after the date hereof, directly or indirectly, to
any person or entity, or use or cause or authorize any person or entity to use
any confidential or proprietary information relating to CyberGuard or any of its
respective Subsidiaries or any information concerning financial condition,
income, mergers and acquisitions, results of operations, accounting practices,
customers, suppliers, services, inventions, sources, leads or methods of
obtaining new products, services or business, intangible property or methods of
operating its businesses or any other information relating to CyberGuard or any
of its Subsidiaries which such Transferor knows or should know is regarded as
confidential, sensitive, proprietary or valuable by CyberGuard or any of the
terms or conditions of any of the Transactions (whether or not any of the
foregoing information is actually novel or unique or is actually known by
others, collectively the "Confidential Information"); provided, however, that
this Agreement shall not restrict the disclosure or use of Confidential
Information (i) to the extent required by law, (ii) which is publicly known and
available through no wrongful act of Transferor or any other current or former
shareholder of ARCA or any of their respective Affiliates, (iii) which becomes
available to any Transferor on a non-confidential basis from a source other than
a party to this Agreement, provided such source is not known to be in violation
of a confidentiality agreement, (iv) which relates to the business operations of
ARCA, or (v) to the extent necessary to directly further the enforcement of any
Transaction Documents.

                  Each Transferor hereby agrees to fully cooperate at all
reasonable times with CyberGuard and its attorneys in connection with any
matters in which such Transferor has knowledge or information concerning any
aspect of CyberGuard's or any of its current or former Subsidiaries businesses
which is relevant to any litigation, controversies or proceedings in which
CyberGuard is or may become involved, including, but not limited to, any matters
concerning financial condition, income, mergers and acquisitions, results of
operations,




                                      -24-
<PAGE>   50

accounting practices, customers, suppliers, services, inventions,
sources, leads or methods of obtaining new products, services or business,
intangible property or methods of operating its businesses (all referred to as
"CyberGuard's Business"). That cooperation will include but not be limited to
meeting with CyberGuard and its attorneys at any reasonable times and upon
reasonable notice to provide a statement or statements concerning any matters
related to CyberGuard's Business. CyberGuard shall reimburse such Transferor for
all reasonable out-of-pocket costs and expenses incurred in connection with this
paragraph. CyberGuard shall endeavor to limit the extent of the Transferor's
time utilized in connection with this paragraph to the extent reasonably
necessary or useful to CyberGuard. No Transferor shall be required to cooperate
under this paragraph for any illegal or improper purpose (E.G., disclosing
historical information about ARCA for competitive or other purposes that would
reasonably be expected to put such Transferor in conflict with duties owed to
Exodus or disclosing information relating to the business acquired which relates
to time periods after the date hereof). In the event such Transferor is
approached in any fashion by any person or persons other than CyberGuard or its
attorneys, seeking information about the CyberGuard's Business, such Transferor
will (i) not, except to the extent required by law, divulge any information
concerning CyberGuard's Business to any person or entity to the extent such
Transferor knows or reasonably should know the same may be used in connection
with any claim against CyberGuard; and (ii) promptly notify CyberGuard of an
attempt to obtain information regarding CyberGuard's Business, identifying to
the best of such Transferor's knowledge, the source of the inquiry. In the event
such Transferor is served with a subpoena in a civil lawsuit to produce
documents or testimony concerning any matters related to CyberGuard's Business,
such Transferor will promptly notify CyberGuard prior to any response.

                  V.2.2 SOLICITATION OF PERSONNEL. During the two-year period
after the date of this Agreement, each Transferor agrees that he or she will
not, directly or indirectly, at any time solicit or cause or authorize directly
or indirectly to be solicited for employment or employ or cause or authorize,
directly or indirectly, to be employed or engaged as an employee, independent
contractor or sales agent, for or on behalf of himself or herself or any other
Person, any Person who was an employee, independent contractor or sales agent of
CyberGuard or any of its Subsidiaries (other than ARCA) at any time during the
60 days prior to the date hereof.

                  V.2.3 NON-DISPARAGEMENT. On and after the date hereof, each of
the Transferors agrees not to make or publish any statement or other
communication which could reasonably be interpreted as disparaging,
uncomplimentary, negative, or unfavorable with respect to CyberGuard or any of
its Affiliates, officers, directors, employees or agents, all except as required
by law; provided, however, that the foregoing shall not prohibit otherwise
non-actionable statements made in good faith in furtherance of good faith
business competition; and, provided, further, that the foregoing shall not
restrict in any manner any Transferor in the course of his or her business
activities from providing good faith technical product evaluations that include
products or services of CyberGuard or any of its Affiliates.

                  V.2.4 INJUNCTIVE RELIEF. Each Transferor acknowledges that it
would be very difficult or impossible to measure the damages resulting from the
breach of any provision of this SECTION 5.2. Each Transferor further
acknowledges that the restrictions in this SECTION 5.2 are reasonable and
reasonably necessary for the protection of the legitimate business interests and
goodwill of CyberGuard, and that a violation by any Transferor of any such
covenant will cause irreparable damage to CyberGuard. Therefore, each Transferor
hereby agrees that any breach or threatened breach by him or her of any
provision of this SECTION 5.2 shall entitle CyberGuard, in addition to any other
legal remedies available to it, to a temporary and permanent injunction or any
other appropriate decree of specific performance in order to enjoin such breach
or threatened breach. It is the desire and intent of the parties that the
provisions of this SECTION 5.2 shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular subparagraph or
portion of this SECTION 5.2 shall be adjudicated to be invalid or unenforceable,
this SECTION 5.2 shall not be deemed null and void and shall be deemed amended
to delete therefrom the portion thus adjudicated to be invalid or unenforceable,
such deletion to apply only with respect to the operation of this SECTION 5.2 in
that particular jurisdiction in which such adjudication is made. In the event
any provisions of this SECTION 5.2 relating to the time period, scope of
activities or areas of restrictions





                                      -25-
<PAGE>   51
shall be declared by a court of competent jurisdiction to exceed the maximum
time period, scope of activities or area such court deems reasonable and
enforceable, the time period, scope of activities or areas of restrictions shall
thereafter be deemed the maximum which such court deems reasonable and
enforceable.

                  V.2.5 OBLIGATIONS UNCONDITIONAL. Each Transferor acknowledges
that each and every one of his or her obligations under this Section 5 are
unconditional and absolute and shall not be terminable for any reason
whatsoever.

         V.3 TERMINATION OF REGISTRATION AGREEMENT, EMPLOYMENT AGREEMENTS,
RESTRICTIVE COVENANT AGREEMENTS, WORKS-MADE-FOR-HIRE AGREEMENTS AND ESCROW AND
PLEDGE AGREEMENT. The Registration Agreement ("REGISTRATION AGREEMENT") entered
into in connection with the Merger Agreement is hereby terminated and null and
void. The Escrow and Pledge Agreement is hereby terminated and null and void,
and the Escrow Agent (as defined in the Escrow and Pledge Agreement) is
irrevocably authorized and directed to deliver to Messrs. Wilson, Weidner and
Bauer all shares of CyberGuard Common Stock covered thereby, free and clear of
all claims of all other Persons. Each of the Employment Agreements is hereby
terminated and null and void. Each of the Restrictive Covenant Agreements is
hereby terminated and null and void. Each of the Confidentiality and
Works-Made-For-Hire Agreements is hereby terminated and null and void.

         V.4 PUBLICITY. The Transferors acknowledge and agree that CyberGuard
will prepare and release one or more press releases and/or public announcements
with respect to the transactions contemplated hereby. CyberGuard shall discuss
any such press releases with William F. Wilson and give him reasonable
opportunity to comment thereon prior to public dissemination thereof. The
Transferors shall not, and shall cause their respective officers, directors,
employees, agents and advisors not to, issue or make any press release or other
announcement, disclosure or statement concerning this Agreement or the
transactions contemplated hereby, without the prior written consent of
CyberGuard. Nothing contained herein shall prevent any party from at any time
furnishing any information to any governmental authority which it is by law or
otherwise so obligated to disclose or from making any disclosure which its
counsel deems necessary or advisable in order to fulfill such party's disclosure
obligations under applicable law or the rules of NASDAQ.

         V.5      GENERAL RELEASE.

                  (A) CYBERGUARD. AS A MATERIAL INDUCEMENT FOR CYBERGUARD TO
ENTER INTO THIS AGREEMENT, EFFECTIVE AS THE CLOSING, EACH TRANSFEROR HEREBY
UNCONDITIONALLY AND IRREVOCABLY RELEASES AND FOREVER DISCHARGES, EFFECTIVE AS OF
THE CLOSING, CYBERGUARD AND ALL OF ITS AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS AND ASSIGNS FROM ANY AND ALL RIGHTS, CLAIMS, DEMANDS, ACTIONS,
JUDGMENTS, OBLIGATIONS, LIABILITIES, LOSSES, COSTS, EXPENSES AND DAMAGES OF ANY
NATURE WHATSOEVER, WHETHER ACCRUED OR UNACCRUED OR POSSIBLE, ASSERTED OR
UNASSERTED, AND WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED ("CLAIMS"),
WHICH EVER EXISTED, NOW EXIST, OR MAY HEREAFTER EXIST, BY REASON OF ANY TORT,
BREACH OF CONTRACT, VIOLATION OF LAW OR OTHER ACT OR FAILURE TO ACT WHICH SHALL
HAVE OCCURRED AT OR PRIOR TO THE CLOSING, INCLUDING, BUT NOT LIMITED TO, MATTERS
IN ANY MANNER RELATING TO OR ARISING IN CONNECTION WITH (I) THE TRANSACTIONS
CONTEMPLATED IN CONNECTION WITH THE MERGER AGREEMENT, INCLUDING, WITHOUT
LIMITATION, THE BREACH OF ANY REPRESENTATIONS AND WARRANTIES OR COVENANTS
CONTAINED IN THE MERGER AGREEMENT, THE VIOLATION OF ANY SECURITIES LAWS BY
CYBERGUARD, THE FAILURE OF CYBERGUARD TO COMPLY WITH ANY PROVISION OF THE MERGER
AGREEMENT OR ANY OTHER DOCUMENT RELATING THERETO (IN ANY SUCH INSTANCE, WHETHER
BY NEGLIGENCE, INTENTIONAL MISCONDUCT, FRAUD OR OTHERWISE), (II) THE OCCURRENCE
OF ANY OF THE TRANSACTIONS WHICH ARE NOT EFFECTUATED BY THIS AGREEMENT, (III)
SUCH TRANSFEROR'S EMPLOYMENT BY ARCA OR CYBERGUARD, INCLUDING BUT NOT LIMITED






                                      -26-
<PAGE>   52

TO, ACCRUED VACATION OR BENEFITS OF ANY NATURE WHATSOEVER, (IV) ANY CLAIMS
RELATING TO WRONGFUL TERMINATION OR AGE, SEX OR OTHER DISCRIMINATION AND\OR (V)
ANY AND ALL RIGHTS TO OPTIONS TO ACQUIRE CYBERGUARD COMMON STOCK WHICH WERE
GRANTED OR PROMISED TO BE GRANTED TO SUCH TRANSFEROR; PROVIDED, HOWEVER, THAT
THE FOREGOING RELEASE SHALL NOT APPLY TO BREACHES OF REPRESENTATIONS, WARRANTIES
OR COVENANTS OF CYBERGUARD OR ARCA IN THIS AGREEMENT. EACH TRANSFEROR EXPRESSLY
INTENDS THAT THE FOREGOING RELEASE SHALL BE EFFECTIVE REGARDLESS OF WHETHER THE
BASIS FOR ANY CLAIM OR RIGHT HEREBY RELEASED SHALL HAVE BEEN KNOWN TO OR
ANTICIPATED BY HIM OR HER. EACH OF THE TRANSFERORS ACKNOWLEDGES THAT HE OR SHE
MAY HEREAFTER DISCOVER FACTS IN ADDITION TO OR DIFFERENT FROM THOSE WHICH THEY
NOW KNOW OR BELIEVE TO BE TRUE WITH RESPECT TO CYBERGUARD OR THE CLAIMS RELEASED
HEREBY OR TO THE SUBJECT MATTER RELATING THERETO, BUT EACH TRANSFEROR FULLY,
FINALLY, UNCONDITIONALLY AND FOREVER RELEASES, SETTLES AND DISCHARGES CYBERGUARD
AND ALL OF ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND ASSIGNS AS
DESCRIBED HEREIN WITHOUT REGARD TO THE SUBSEQUENT DISCOVERY OR EXISTENCE OF SUCH
DIFFERENT OR ADDITIONAL FACTS AND HEREBY WAIVES ANY AND ALL RIGHTS HE OR SHE MAY
HAVE UNDER ANY STATUTE, INCLUDING, BUT NOT LIMITED TO, SECTION 1542 OF THE
CALIFORNIA CIVIL CODE, OR COMMON LAW PRINCIPLES WHICH WOULD LIMIT THE EFFECT OF
THE FOREGOING RELEASE TO THOSE ACTIONS, CAUSES OF ACTION, SUITS, DEBTS, DUES,
SUMS OF MONEY, ACCOUNTS, RECKONINGS, BONDS, BILLS, SPECIALITIES, COVENANTS,
CONTRACTS, CONTROVERSIES, AGREEMENTS, JUDGMENTS, EXECUTIONS, CLAIMS, DEMANDS AND
LIABILITIES ACTUALLY KNOW OR SUSPECTED TO EXIST AT THE TIME OF THE EFFECTIVENESS
OF THE FOREGOING RELEASE. CALIFORNIA CIVIL CODE SECTION 1542 PROVIDES:

                  A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
                  DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
                  EXECUTING THE RELEASE WHICH IF KNOWN BY HIM MUST HAVE
                  MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

         EACH TRANSFEROR ALSO IRREVOCABLY AND UNCONDITIONALLY AGREES NOT TO
BRING ANY SUIT, PROCEEDING, ARBITRATION OR OTHER ACTION OF ANY NATURE WHATSOEVER
AGAINST CYBERGUARD OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
AFFILIATES IN CONNECTION WITH OR RELATING TO ANY CLAIM SO RELEASED.

                  (B) TRANSFERORS. AS A MATERIAL INDUCEMENT FOR THE TRANSFERORS
TO ENTER INTO THIS AGREEMENT, EFFECTIVE AS THE CLOSING, EACH OF CYBERGUARD AND
ARCA HEREBY UNCONDITIONALLY AND IRREVOCABLY RELEASES AND FOREVER DISCHARGES EACH
TRANSFEROR AND EACH SHAREHOLDER AND OPTION HOLDER OF ARCA AS OF THE DATE OF THE
CONSUMMATION OF THE MERGER AGREEMENT, FROM ANY AND ALL CLAIMS, WHICH EVER
EXISTED, NOW EXIST, OR MAY HEREAFTER EXIST, BY REASON OF ANY TORT, BREACH OF
CONTRACT, VIOLATION OF LAW OR OTHER ACT OR FAILURE TO ACT WHICH SHALL HAVE
OCCURRED AT OR PRIOR TO THE CLOSING, EXCEPT THAT, NOTWITHSTANDING ANYTHING TO
THE CONTRARY SET FORTH HEREIN, THE FOREGOING SHALL NOT RELEASE ANY CLAIM BASED
UPON OR ARISING IN CONNECTION WITH (I) ANY BREACH OF ANY REPRESENTATION OR
WARRANTY OR ANY VIOLATION OF ANY COVENANT OR AGREEMENT OF ANY TRANSFEROR
CONTAINED IN THIS AGREEMENT, IN ANY DOCUMENT OR AGREEMENT EXECUTED IN CONNECTION
WITH ANY OF THE TRANSACTIONS OR IN ANY DOCUMENT OR AGREEMENT ENTERED INTO IN
CONNECTION HEREWITH OR THEREWITH OR (II) ANY RIGHTS WHICH CYBERGUARD OR ARCA
HAVE AS A RESULT OF THE EXERCISE OF ANY




                                      -27-
<PAGE>   53

RIGHTS OF SUBROGATION. EACH OF CYBERGUARD AND ARCA EXPRESSLY INTENDS THAT THE
FOREGOING RELEASE SHALL BE EFFECTIVE REGARDLESS OF WHETHER THE BASIS FOR ANY
CLAIM OR RIGHT HEREBY RELEASED SHALL HAVE BEEN KNOWN TO OR ANTICIPATED BY IT.
EACH OF CYBERGUARD AND ARCA ACKNOWLEDGES THAT IT MAY HEREAFTER DISCOVER FACTS IN
ADDITION TO OR DIFFERENT FROM THOSE WHICH IT NOW KNOWS OR BELIEVES TO BE TRUE
WITH RESPECT TO THE CLAIMS RELEASED HEREBY OR TO THE SUBJECT MATTER RELATING
THERETO, BUT EACH OF CYBERGUARD AND ARCA FULLY, FINALLY, UNCONDITIONALLY AND
FOREVER RELEASES, SETTLES AND DISCHARGES SUCH TRANSFERORS AND SHAREHOLDERS AND
OPTION HOLDERS AS DESCRIBED HEREIN WITHOUT REGARD TO THE SUBSEQUENT DISCOVERY OR
EXISTENCE OF SUCH DIFFERENT OR ADDITIONAL FACTS AND HEREBY WAIVES ANY AND ALL
RIGHTS IT MAY HAVE UNDER ANY STATUTE, INCLUDING, BUT NOT LIMITED TO, SECTION
1542 OF THE CALIFORNIA CIVIL CODE, OR COMMON LAW PRINCIPLES WHICH WOULD LIMIT
THE EFFECT OF THE FOREGOING RELEASE TO THOSE ACTIONS, CAUSES OF ACTION, SUITS,
DEBTS, DUES, SUMS OF MONEY, ACCOUNTS, RECKONINGS, BONDS, BILLS, SPECIALITIES,
COVENANTS, CONTRACTS, CONTROVERSIES, AGREEMENTS, JUDGMENTS, EXECUTIONS, CLAIMS,
DEMANDS AND LIABILITIES ACTUALLY KNOWN OR SUSPECTED TO EXIST AT THE TIME OF THE
EFFECTIVENESS OF THE FOREGOING RELEASE. CALIFORNIA CIVIL CODE SECTION 1542
PROVIDES:

                  A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
                  DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
                  EXECUTING THE RELEASE WHICH IF KNOWN BY HIM MUST HAVE
                  MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

         EACH OF CYBERGUARD AND ARCA ALSO IRREVOCABLY AND UNCONDITIONALLY AGREES
NOT TO BRING ANY SUIT, PROCEEDING, ARBITRATION OR OTHER ACTION OF ANY NATURE
WHATSOEVER AGAINST ANY TRANSFEROR IN CONNECTION WITH OR RELATING TO ANY CLAIM SO
RELEASED.

         V.6 NON-DISPARAGEMENT. On and after the date hereof, CyberGuard agrees
not to make or publish any statement or other communication which could
reasonably be interpreted as disparaging, uncomplimentary, negative or
unfavorable with respect to any Transferor, all except as required by law;
provided, however, that the foregoing shall not prohibit otherwise
non-actionable statements made in good faith in furtherance of good faith
business competition; and, provided, further, that the foregoing shall not
restrict in any manner CyberGuard in the course of its business activities from
providing good faith technical product or service evaluations that include
products or services provided by any Transferor.

         V.7 INVESTIGATION; NOTICES. The representations, warranties and
covenants set forth in this Agreement shall not be affected or diminished in any
way by the receipt of any notice to any party or by any investigation (or
failure to investigate) at any time by or on behalf of the party for whose
benefit such representations, warranties and covenants were made and shall
survive the closing of the Transactions contemplated hereby.

         V.8 INDEMNIFICATION.

                  (a) BY THE TRANSFERORS. Subject to the limitations set forth
in SECTION 5.8 hereof, each Transferor severally and not jointly agrees to
indemnify and hold harmless CyberGuard and its Affiliates and their respective
successors and assigns from, against and in respect of, the full amount of any
and all liabilities, damages, claims, deficiencies, fines, assessments, losses,
taxes, penalties, interest, costs and expenses, including, without limitation,
reasonable fees and disbursements of counsel (collectively "LOSSES") arising
from, in connection with, or incident to: (i) any breach or violation of any of
the representations, warranties, covenants or agreements of any Transferor
contained in this Agreement or in any document or certificate delivered by any
Transferor at or prior to the Closing to effectuate the transactions
contemplated hereby; and (ii) any and all




                                      -28-
<PAGE>   54

actions, suits, proceedings, demands, assessments, judgments, costs and expenses
incidental to any of the foregoing.

                  (b) BY CYBERGUARD. Subject to the limitations set forth in
SECTION 5.8 hereof, CyberGuard agrees to indemnify and hold harmless each
Transferor and their respective successors and assigns from, against and in
respect of, the full amount of any and all Losses arising from, in connection
with, or incident to: (i) any breach or violation of any of the representations,
warranties, covenants or agreements of CyberGuard contained in this Agreement or
in any document or certificate delivered by CyberGuard at or prior to the
Closing to effectuate the transactions herein; and (ii) any and all actions,
suits, proceedings, demands, assessments, judgments, costs and expenses
incidental to any of the foregoing.

                  (c) INDEMNITY PROCEDURE. A party or parties hereto agreeing to
be responsible for or to indemnify against any matter pursuant to this SECTION
5.8 is referred to herein as the "Indemnifying Party" and the other party or
parties claiming indemnity is referred to as the "Indemnified Party." An
Indemnified Party under this Agreement shall, with respect to claims asserted
against such party by any third party, give written notice to each Indemnifying
Party of any liability which might give rise to a claim for indemnity under this
Agreement within ten (10) business days of the receipt of any written claim from
any such third party, and with respect to other matters for which the
Indemnified Party may seek indemnification, give prompt written notice to each
Indemnifying Party; provided, however, that any failure to give such notice will
not waive any rights of the Indemnified Party except to the extent the rights of
the Indemnifying Party are materially prejudiced. The Indemnified Party shall
contest and defend such claims, acting reasonably and in accordance with good
faith business judgment, with counsel reasonably satisfactory to the
Indemnifying Party, and shall not effect any settlement thereof without the
consent of each Indemnifying Party, which consent shall not be unreasonably
withheld. An Indemnifying Party shall have the right to participate in such
proceedings and to be represented by separate attorneys of its choice and at its
own expense. Each Indemnified Party and Indemnifying Party agree to afford one
another the opportunity to be present at, and to participate in, conferences
with all Persons asserting claims for which indemnification is sought hereunder.
Each Indemnified Party and Indemnifying Party shall cooperate with and assist
the other to the extent lawful and reasonably possible. Each Indemnifying Party
shall be kept fully informed of the defense of any such claim at all stages
thereof. In the event that an Indemnified Party fails to timely and in good
faith defend against any such claim, each Indemnifying Party shall, after
providing three days prior written notice to the Indemnified Party, have the
right, but not the obligation, to defend and settle the same. In the event that
the Indemnifying Party is, directly or indirectly, conducting a defense against
any such claim, the Indemnified Party shall cooperate with the Indemnifying
Party in any such defense and make available to it all such witnesses, records,
materials and information in its possession or under its control.



                                   ARTICLE VI

                                  MISCELLANEOUS

         VI.1 NOTICES. Any notice or other communication under this Agreement
shall be in writing and shall be delivered personally or sent by registered
mail, return receipt requested, postage prepaid, or sent by prepaid overnight
courier to the parties at the addresses set forth below their names on the
signature pages of this Agreement (or at such other addresses as shall be
specified by the parties by like notice), to the attention of the President of
such party. Such notices, demands, claims and other communications shall be
deemed given when actually received or: (A) in the case of delivery by overnight
service with guaranteed next day delivery, the next day or the day designated
for delivery; or (B) in the case of registered U.S. mail, five days after
deposit in the U.S. mail.

         VI.2 ENTIRE AGREEMENT. This Agreement and each document and agreement
executed by the parties in connection herewith contains every obligation and
understanding among the parties relating to the subject matter hereof and merges
all prior discussions, negotiations and agreements, if any, among them, and none
of the parties shall be bound by any representations, warranties, covenants, or
other understandings, other than as expressly provided or referred to herein.





                                      -29-
<PAGE>   55

         VI.3 ASSIGNMENT. This Agreement may not be assigned by any party
without the written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, and permitted assigns.

         VI.4 WAIVER AND AMENDMENT. Any representation, warranty, covenant, term
or condition of this Agreement which may legally be waived, may be waived, or
the time of performance thereof extended, at any time by the party hereto
entitled to the benefit thereof, and any term, condition or covenant hereof may
be amended by the parties hereto at any time. No waiver by any party hereto,
whether express or implied, of its rights under any provision of this Agreement
shall constitute a waiver of such party's rights under such provisions at any
other time or a waiver of such party's rights under any other provision of this
Agreement or a waiver of the rights of any other party. No failure by any party
hereto to take any action against any breach of this Agreement or default by
another party shall constitute a waiver of the former party's right to enforce
any provision of this Agreement or to take action against such breach or default
or any subsequent breach or default by such other party.

         VI.5 NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any Person
other than the parties hereto and their respective successors and permitted
assigns, any rights or remedies under or by reason of this Agreement; PROVIDED,
HOWEVER, that all shareholders and option holders of ARCA as of the consummation
of the Transactions contemplated by the Merger Agreement shall be third party
beneficiaries of SECTIONS 5.5(B) AND 6.13 of this Agreement.

         VI.6 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement shall be declared invalid, void or unenforceable,
the remainder of the provisions of this Agreement shall remain in full force and
effect, and such invalid, void or unenforceable provision shall be interpreted
as closely as possible to the manner in which it was written.

         VI.7 EXPENSES. All expenses (including, without limitation, legal fees
and expenses, investment banking fees, and expenses of accountants) incurred by
a party in connection with the transactions contemplated hereby will be borne by
such party.

         VI.8 HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of any provisions of this Agreement.

         VI.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Any telecopied
counterpart of a manually executed original shall be deemed a manually executed
original.

         VI.10 LITIGATION; PREVAILING PARTY. In the event of any litigation with
regard to this Agreement, the prevailing party shall be entitled to receive from
the non-prevailing party and the non-prevailing party shall pay upon demand all
reasonable fees and expenses of counsel for the prevailing party.

         VI.11 INJUNCTIVE RELIEF. It is possible that remedies at law may be
inadequate and, therefore, the parties hereto shall be entitled to equitable
relief including, without limitation, injunctive relief, specific performance or
other equitable remedies in addition to all other remedies provided hereunder or
available to the parties hereto at law or in equity.

         VI.12 GOVERNING LAW; EXCLUSIVE VENUE. This Agreement has been entered
into and shall be construed and enforced in accordance with the laws of the
State of Florida without reference to the choice of law principles thereof. This
Agreement shall be subject to the exclusive jurisdiction of the courts located
in Broward County, Florida. The parties to this Agreement agree that any breach
of any term or condition of this Agreement shall be deemed to be a breach
occurring in Broward County, Florida by virtue of a failure to perform an act
required to be performed in Broward County, Florida and irrevocably and
expressly agree to submit to the jurisdiction of the courts located in Broward
County, Florida for the purpose of resolving any





                                      -30-
<PAGE>   56

disputes among the parties relating to this Agreement or the transactions
contemplated hereby. The parties irrevocably waive, to the fullest extent
permitted by law, any objection which they may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement, or any judgment entered by any court in respect hereof brought
in Broward County, Florida, and further irrevocably waive any claim that any
suit, action or proceeding brought in Broward County, Florida has been brought
in an inconvenient forum.

         VI.13 TRANSACTIONS. CyberGuard hereby consents to the sale and transfer
of CyberGuard Common Stock to Exodus as contemplated in connection with the
Transactions, notwithstanding the fact that such CyberGuard Common Stock may be
subject to certain Affiliates Letters (as defined in the Merger Agreement) and
may be deemed restricted securities.

         VI.14 RESIGNATIONS. Simultaneously with the Closing, each Transferor
hereby resigns from all positions (as officer, director or otherwise) from
CyberGuard and ARCA.

         IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.

                              CYBERGUARD CORPORATION


                              By:
                                 --------------------------------
                              Name:
                                   ------------------------------
                              Title:
                                    -----------------------------
                                    Address: 2000 West Commercial Boulevard
                                             Suite 200
                                             Ft. Lauderdale, Florida 33309



                              ARCA SYSTEMS, INC.


                              By:
                                 --------------------------------
                              Name:
                                   ------------------------------
                              Title:
                                    -----------------------------
                                    Address: 2000 West Commercial Boulevard
                                             Suite 200
                                             Ft. Lauderdale, Florida 33309



                              -----------------------------------------------
                              WILLIAM F. WILSON
                              11149 Sutherland Avenue
                              Cupertino, CA 95014


                              -----------------------------------------------
                              MICHAEL L. WEIDNER
                              10498 Faulkner Ridge Circle
                              Columbia, MD 21044





                                      -31-
<PAGE>   57

                              -----------------------------------------------
                              R. KENNETH BAUER
                              40165 Canyon Heights Drive
                              Freemont, CA 94539-3008


                              -----------------------------------------------
                              JACK WOOL
                              236 Old Littleton Road
                              Harvard, MA 01451


                              -----------------------------------------------
                              MARV SCHAEFER
                              3657 Sharp Road
                              Glenwood, MD 21738


                              -----------------------------------------------
                              GARY GROSSMAN
                              2230 Wheelwright Court
                              Reston, VA 22091


                              -----------------------------------------------
                              VICTORIA THOMPSON
                              9331 Mainsail Drive
                              Burke, VA 22015


                              -----------------------------------------------
                              STEPHEN NARDONE
                              36 Deacon Lane
                              Hollis, NH 03049


                              -----------------------------------------------
                              CHARLES PFLEEGER
                              4519 Davenport Street, N.W.
                              Washington, DC 20016-4415


                              -----------------------------------------------
                              Name: Rick Flather
                              Address:


                                      -32-

<PAGE>   58


                              -----------------------------------------------
                              Name: Kelly Stump
                              Address:


                              -----------------------------------------------
                              Name: Nicole Canzanese
                              Address:


                              -----------------------------------------------
                              Name: Lisa Gallagher
                              Address:


                              -----------------------------------------------
                              Name: Claire Barrett
                              Address:


                              -----------------------------------------------
                              Name: Nancy Campesi
                              Address:


                              -----------------------------------------------
                              Name: Lawrence Halme
                              Address:


                              -----------------------------------------------
                              Name: David Wichers
                              Address:


                              -----------------------------------------------
                              Name: Rochelle Randel
                              Address:


                              -----------------------------------------------
                              Name: Karen Ferraiolo
                              Address:


                              -----------------------------------------------
                              Name: Doug Landoll
                              Address:


                              -----------------------------------------------
                              Name: Judy Piatanesi
                              Address:





                                      -33-
<PAGE>   59


                              -----------------------------------------------
                              Name: Jeff Williams
                              Address:


                              -----------------------------------------------
                              Name: Sally Moulton
                              Address:


                              -----------------------------------------------
                              Name: Stan Wisseman
                              Address:


                              -----------------------------------------------
                              Name: Diann Carpenter
                              Address:


                              -----------------------------------------------
                              Name: William Young
                              Address:


                              -----------------------------------------------
                              Name: Sandra Creyssels
                              Address:


                              -----------------------------------------------
                              Name: Herbert Markle
                              Address:


                              -----------------------------------------------
                              Name: Stephen Brackin
                              Address:


                              -----------------------------------------------
                              Name: Frank Wentz
                              Address:


                              -----------------------------------------------
                              Name: Kristina Winkler
                              Address:


                              -----------------------------------------------
                              Name: Joyce Richardson
                              Address:


                              -----------------------------------------------
                              Name: Ken Bailey
                              Address:




                                      -34-
<PAGE>   60

                              -----------------------------------------------
                              Name: Terrie Diaz
                              Address:


                              -----------------------------------------------
                              Name: Klayton Monroe
                              Address:


                              -----------------------------------------------
                              Name: Rich Searles
                              Address:


                              -----------------------------------------------
                              Name: Janine Tipton
                              Address:


                              -----------------------------------------------
                              Name: Carol Wickham
                              Address:


                              -----------------------------------------------
                              Name: Wayne Thibeault
                              Address:


                              -----------------------------------------------
                              Name: Chris Romeo
                              Address:


                              -----------------------------------------------
                              Name: Brian Rickle
                              Address:


                              -----------------------------------------------
                              Name: Daniel DePrez
                              Address:


                              -----------------------------------------------
                              Name: Eric Winterton
                              Address:



                                  SCHEDULE 4.7

All unassigned Permits and Licenses, all Unassigned Contracts and all Unassigned
Services Contracts (all as defined in the Asset Purchase Agreement).

All liabilities or obligations listed in Section 3.2(ii) of the Asset Purchase
Agreement released by the express terms of this Agreement.



                                      -35-
<PAGE>   61



                                  SCHEDULE 4.8

Claims and Stock Purchase Agreement

Asset Purchase Agreement

Escrow Agreements (2)

Non-Competition Agreements -- Wilson, Weidner and Bauer

Employment Agreements -- Wilson, Weidner and Bauer

Option Agreements

Proprietary Rights Agreements

Executive Employment Policy


<PAGE>   62


                       CLAIMS AND STOCK PURCHASE AGREEMENT

                  This CLAIMS AND STOCK PURCHASE AGREEMENT (this "AGREEMENT") is
entered into as of October 2, 1998 (the "CLOSING DATE"), by and between Exodus
Communications, Inc., a Delaware corporation ("EXODUS"), EC Acquisitions Corp.,
a Delaware corporation and wholly-owned subsidiary of Exodus ("SUB" and together
with Exodus, "BUYER") and the persons listed on EXHIBIT A hereto as sellers
(individually, a "SELLER" and together the "Sellers").

                              W I T N E S S E T H:

                  WHEREAS, each Seller owns the number of shares of stock of
CyberGuard Corporation, a Florida corporation ("CYBERGUARD"), set forth next to
each Seller's name on EXHIBIT A to this Agreement (the "SHARES") and may have
certain potential claims against CyberGuard in connection with the original
acquisition by Seller of such Shares or otherwise.

                  WHEREAS, Sellers wish to sell and Buyer wishes to purchase the
Shares and Sellers' interest in such claims pursuant to the terms and subject to
the conditions set forth in this Agreement.

                  NOW THEREFORE, in consideration of the sums paid to each
Seller set forth next to such Seller's name on EXHIBIT A hereto by Buyer at the
time hereof, and the mutual promises contained in this Agreement, the parties
hereto agree as follows:

                  SECTION 1. DEFINITIONS. The following terms, as used herein,
have the following respective meanings:

                  "Claims" means any and all rights, claims, demands, actions,
losses, costs, expenses, judgments, obligations, liabilities and damages of any
nature whatsoever, whether accrued or unaccrued or possible, asserted or
unasserted, and whether known or unknown, suspected or unsuspected, which ever
existed, now exist, or may hereafter exist, by reason of any tort, breach of
contract, violation of law or other act or failure to act, which shall have
occurred at or prior to the date hereof (the "CLOSING DATE") that each
Non-Employee Seller may have against CyberGuard or any of its Subsidiaries,
officers, directors, employees or agents or any of their respective Affiliates.

                  "Damage" means any damage, loss, liability, expense
(including, without limitation, reasonable expenses of investigation and fees
and disbursements of attorneys and other professional advisors in connection
with any action, suit or proceeding brought against Buyer) and any other
obligation whatsoever.

                  "Encumbrance" means any lien, mortgage, charge, hypothecation,
pledge, security interest, prior assignment, option, warrant, lease, sublease,
right to possession, encumbrance, claim, right or restriction which affects, by
way of a conflicting ownership interest or otherwise, the right, title or
interest in or to any particular property.

                  "Founder" means each of William S. Wilson, Ken Bauer and Mike
Weidner.

                  "Non-Employee Seller" means each of Robert E. Bauer, Arnold M.
Harrison, John P. and Eve W. Melton, Vincent O. Lacariere, Stanley Rybczynski,
E. Lance Doxie, Charles W. Doxie, Richard Perez, Steven Wilson, Francis Wichers,
Frederick P. Henninge, Elizabeth J. Slater, Jeff DeMello, Gordon Buhle and Marla
Collier.

                  "Person" means an individual, corporation, partnership,
association, trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.







                                      -37-
<PAGE>   63

                  "Transferred Interests and Assets" means the Claims and Shares
transferred pursuant to this Agreement.

                  SECTION 2. (a) PURCHASE, SALE AND ASSIGNMENT OF CLAIMS;
RELEASE OF CLAIMS; COVENANT NOT TO SUE; COOPERATION. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each Non-Employee Seller hereby irrevocably and unconditionally sells,
transfers, conveys and assigns and Buyer hereby purchases each Non-Employee
Seller's entire undivided interest in the Claims. BY SUCH PURCHASE AND
ASSIGNMENT, BUYER ACQUIRES THE FULL POWER TO PROSECUTE, COMPROMISE, SETTLE AND
REASSIGN SUCH CLAIMS, AND DEMAND, SUE FOR, COLLECT AND RECEIVE ANY AND ALL
AMOUNTS DUE OR TO BECOME DUE UNDER SUCH CLAIMS AND GIVE A RELEASE IN FULL
SETTLEMENT, INCLUDING THE UNCONDITIONAL AND IRREVOCABLE RELEASE OF CYBERGUARD
AND ALL OF ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND ASSIGNS
FROM AND AGAINST ANY AND ALL CLAIMS WHICH SHALL HAVE ARISEN OR ACCRUED OR
OCCURRED OR RELATE IN WHOLE OR IN PART TO MATTERS OCCURRING ON OR PRIOR TO THE
DATE OF THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO, MATTERS IN ANY MANNER
RELATING TO OR ARISING IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED IN
CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER, DATED AS OF MAY 29, 1998, TO
WHICH CERTAIN SELLERS AND CYBERGUARD ARE PARTIES ("MERGER AGREEMENT"),
INCLUDING, WITHOUT LIMITATION, THE BREACH OF ANY REPRESENTATIONS AND WARRANTIES
CONTAINED IN THE MERGER AGREEMENT, THE VIOLATION OF ANY SECURITIES LAWS BY
CYBERGUARD, THE FAILURE OF CYBERGUARD TO COMPLY WITH ANY PROVISION OF THE MERGER
AGREEMENT OR ANY OTHER DOCUMENT RELATING THERETO (IN ANY SUCH INSTANCE, WHETHER
BY NEGLIGENCE, INTENTIONAL MISCONDUCT, FRAUD OR OTHERWISE) OR THE OCCURRENCE OF
ANY OF THE TRANSACTIONS BEING EFFECTUATED ON THE DATE HEREOF WHICH ARE NOT
EFFECTUATED BY AGREEMENTS TO WHICH SUCH NON-EMPLOYEE SELLER AND CYBERGUARD ARE
BOTH PARTIES, INCLUDING AS A THIRD PARTY BENEFICIARY; PROVIDED, HOWEVER, THAT
SUCH A RELEASE MAY NOT INCLUDE A RELEASE WITH RESPECT TO BREACHES OF
REPRESENTATIONS, WARRANTIES OR COVENANTS OF CYBERGUARD OR ARCA IN ANY AGREEMENT
ENTERED INTO ON THE DATE HEREOF TO WHICH SUCH NON-EMPLOYEE SELLER AND CYBERGUARD
ARE BOTH PARTIES, INCLUDING AS A THIRD PARTY BENEFICIARY. EACH NON-EMPLOYEE
SELLER EXPRESSLY INTENDS THAT, BY SELLING AND ASSIGNING TO BUYER ITS INTEREST IN
THE CLAIMS, AND THEREBY ENABLING BUYER TO GIVE A RELEASE IN FULL SETTLEMENT OF
SUCH CLAIMS, THAT ANY SUCH RELEASE SHALL BE EFFECTIVE REGARDLESS OF WHETHER THE
BASIS FOR ANY CLAIM OR RIGHT BEING RELEASED SHALL HAVE BEEN KNOWN TO OR
ANTICIPATED BY HIM OR HER. EACH NON-EMPLOYEE SELLER ACKNOWLEDGES THAT HE OR SHE
MAY HEREAFTER DISCOVER FACTS IN ADDITION TO OR DIFFERENT FROM THOSE WHICH HE OR
SHE NOW KNOWS OR BELIEVES TO BE TRUE WITH RESPECT TO CYBERGUARD OR THE CLAIMS
BEING ASSIGNED TO BUYER HEREBY OR TO THE SUBJECT MATTER RELATING THERETO, BUT
EACH NON-EMPLOYEE SELLER, BY SUCH SALE AND ASSIGNMENT TO BUYER OF ITS CLAIMS,
ENABLES BUYER TO FULLY, FINALLY, UNCONDITIONALLY AND FOREVER RELEASE, SETTLE AND
DISCHARGE CYBERGUARD AND ALL OF ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS AND ASSIGNS AS DESCRIBED HEREIN WITHOUT REGARD TO THE SUBSEQUENT
DISCOVERY OR EXISTENCE OF SUCH DIFFERENT OR ADDITIONAL FACTS AND TO WAIVE ANY
AND ALL RIGHTS SUCH NON-EMPLOYEE SELLER MAY HAVE HAD UNDER ANY STATUTE,
INCLUDING, BUT NOT LIMITED TO, SECTION 1541 OF THE CALIFORNIA CIVIL CODE, OR
COMMON LAW PRINCIPLES WHICH WOULD LIMIT THE EFFECT OF THE FOREGOING RELEASE TO
THOSE ACTIONS, CAUSES OF ACTION, SUITS, DEBTS, DUES, SUMS OF MONEY, ACCOUNTS,
RECKONINGS, BONDS, BILLS, SPECIALTIES, COVENANTS, CONTRACTS, CONTROVERSIES,
AGREEMENTS, JUDGMENTS, EXECUTIONS, CLAIMS, DEMANDS AND





                                      -38-
<PAGE>   64

LIABILITIES ACTUALLY KNOW OR SUSPECTED TO EXIST AT THE TIME OF THE EFFECTIVENESS
OF THE RELEASE. CALIFORNIA CIVIL CODE SECTION 1542 PROVIDES:

                           A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
                           CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
                           FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF
                           KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
                           SETTLEMENT WITH THE DEBTOR.

                           Each Non-Employee Seller also irrevocably and
unconditionally agrees not to bring any suit, proceeding, arbitration,
litigation or other action of any nature whatsoever against CyberGuard or any of
its officers, directors, employees, agents or affiliates in connection with or
relating to any Claim referenced above.

                           (b) PURCHASE AND SALE OF SHARES. Each Seller hereby
sells, transfers, conveys and assigns and Buyer hereby purchases from such
Seller all right, title and interest in and to the number of Shares set forth on
EXHIBIT A hereto next to such Seller's name represented by the stock
certificates identified on such EXHIBIT A, which certificates have been or
promptly will be delivered to Buyer, and each Seller does hereby irrevocably
constitute and appoint CyberGuard's transfer agent as its attorney-in-fact, with
full powers of substitution, to transfer the Shares on the books of CyberGuard
and to issue certificates representing such Shares to Buyer.

                           Seller understands and acknowledges that Buyer
intends to transfer the Transferred Interests and Assets to CyberGuard and/or
its affiliates.

                  SECTION 3. CONSIDERATION FOR SALE OF TRANSFERRED INTERESTS AND
ASSETS. As consideration for the sale to Buyer of the Transferred Interests and
Assets, Buyer hereby pays to each Seller the amount listed as total
consideration next to such Seller's name on EXHIBIT A hereto (the
"CONSIDERATION"), in cash, receipt of which is hereby acknowledged, of which the
amount set forth next to such Seller's name on EXHIBIT A as "Amount of
Consideration Held in Escrow" shall be held by the Escrow Agent pursuant to the
Escrow Agreement referenced in Section 6 hereof.

                  SECTION 4.

                           (a) REPRESENTATIONS AND WARRANTIES OF SELLERS WITH
RESPECT TO TRANSFERRED INTERESTS AND ASSETS. Each Seller represents and warrants
to and agrees with Buyer that:

                                    (i) This Agreement has been duly authorized,
executed and delivered by or on behalf of such Seller and is enforceable in
accordance with its terms; provided, however, that this Agreement may be subject
as to enforcement to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights, and to general
equitable principles.

                                    (ii) The execution and delivery by such
Seller of, and the performance by such Seller of its obligations under, this
Agreement, will not contravene any provision of applicable law, or the articles
of incorporation or by-laws of such Seller (if such Seller is a corporation), or
any agreement or other instrument binding upon such Seller or any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over such Seller, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by such Seller of its obligations under this Agreement except such
as may be required by the securities or Blue Sky laws of the various states in
connection with the sale of the Shares by such Seller to Buyer; provided,
however, that this Agreement may be subject as to enforcement to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights, and to general equitable principles.

                                    (iii) Such Seller has valid title to the
Shares to be sold by such Seller and the legal right and power, and all
authorizations and approvals required by law, to enter into this Agreement, and
to sell, transfer and deliver the Shares to be sold by such Seller; subject to
the




                                      -39-
<PAGE>   65

enforceability of the release of any restrictions or encumbrances on the Shares
effected by the Agreement dated October 2, 1998 between CyberGuard, Arca and
certain employees of Arca.

                                    (iv) Delivery of the Shares to be sold by
Seller pursuant to this Agreement will pass title to such Shares free and clear
of any security interests, claims, liens, equities and other Encumbrances;
subject to the enforceability of the release of any restrictions or encumbrances
on the Shares effected by the Agreement dated October 2, 1998 between
CyberGuard, Arca and certain employees of Arca.

                                    (v) Such Seller has not sold, assigned or
otherwise transferred to any third party any of his or her right, title or
interest in or to any of the Transferred Interests or Assets; subject to the
enforceability of the release of any restrictions or encumbrances on the Shares
effected by the Agreement dated October 2, 1998 between CyberGuard, Arca and
certain employees of Arca.

                                    (vi) There exists no Encumbrance whatsoever
on or relating to any of the Transferred Interests or Assets, and such Seller
neither holds, nor has any other right, title or interest in or to any
Encumbrance on any of the Transferred Interests or Assets.

                                    (vii) SUCH SELLER HAS REVIEWED THIS
AGREEMENT AND ALL OF THE AGREEMENTS AND INSTRUMENTS EXECUTED IN CONNECTION
HEREWITH AND ALL OF THE AGREEMENTS AND RELATED ITEMS RELATING TO THE
TRANSACTIONS CONTEMPLATED IN CONNECTION HEREWITH AND THEREWITH (ALL OF THE
FOREGOING HEREINAFTER SOMETIMES REFERRED TO AS THE "TRANSACTIONS"), INCLUDING
BUT NOT LIMITED TO THE AGREEMENTS SET FORTH ON SCHEDULE A HERETO, SOME OF WHICH
INVOLVE CYBERGUARD (COLLECTIVELY, THE "TRANSACTION DOCUMENTS"). EACH SELLER
UNDERSTANDS THAT HE OR SHE HAS BEEN STRONGLY URGED AND HAS HAD THE OPPORTUNITY
TO SEEK THE ADVICE OF HIS OR HER OWN INDEPENDENT LEGAL COUNSEL AND BUSINESS AND
TAX ADVISORS BEFORE ENTERING INTO ANY OF THE TRANSACTION DOCUMENTS. SUCH SELLER
BELIEVES THAT THE TRANSACTIONS ARE FAIR AND REASONABLE TO SUCH SELLER IN ALL
RESPECTS (INCLUDING, BUT NOT LIMITED TO, THE PAYMENT BY EXODUS TO CYBERGUARD OF
MORE THAN $3 MILLION) AND CONSENTS THERETO AND BELIEVES THAT THE TRANSACTIONS
ARE IN HIS OR HER OWN BEST INTEREST. SELLER ACKNOWLEDGES THAT NEITHER
CYBERGUARD, ARCA NOR ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS, AGENTS OR
EMPLOYEES, OR ANY OTHER SELLER, SHALL HAVE ANY LIABILITY OR RESPONSIBILITY OF
ANY NATURE WHATSOEVER FOR ANY ACT OR OMISSION BY BUYER OR ANY OF ITS AFFILIATES,
INCLUDING, BUT NOT LIMITED TO, ANY MATERIAL MISSTATEMENT OR OMISSION BY BUYER OR
ANY AFFILIATE OR THE FAILURE OF BUYER OR ANY OF ITS AFFILIATES TO COMPLY WITH
ANY OBLIGATIONS ARISING UNDER ANY OF THE TRANSACTIONS OR OTHERWISE. SUCH SELLER
ACKNOWLEDGES THAT NONE OF BUYER, CYBERGUARD, ARCA OR ANY OTHER SELLER NOR ANY OF
THEIR RESPECTIVE AFFILIATES, SUBSIDIARIES OR AGENTS, HAS MADE TO SUCH SELLER ANY
REPRESENTATION OR WARRANTY AS TO THE TAX OR OTHER CONSEQUENCES TO SUCH SELLER OF
THE TRANSACTIONS. SUCH SELLER UNDERSTANDS THE HIGHLY SPECULATIVE NATURE OF AND
SUBSTANTIAL RISKS INVOLVED IN THE TRANSACTIONS, AND HAS BEEN STRONGLY URGED TO
DISCUSS THE SAME WITH HIS OR HER OWN INDEPENDENT LEGAL COUNSEL AND BUSINESS AND
TAX ADVISORS. IN ADDITION TO SELLER'S FAMILIARITY WITH ARCA AND CYBERGUARD AND
THEIR OPERATIONS, SELLER HAS BEEN OFFERED THE OPPORTUNITY TO ASK QUESTIONS OF
AND RECEIVE ANSWERS FROM ARCA AND CYBERGUARD AND BUYER AND HAS ACCESS TO
INFORMATION SUCH SELLER HAS DEEMED MATERIAL IN DECIDING WHETHER TO CONSENT TO
THE TRANSACTIONS. SUCH SELLER ACKNOWLEDGES THAT THE CONSIDERATION TO BE RECEIVED
BY HIM OR HER IN CONNECTION WITH THE TRANSACTIONS WAS DETERMINED IN ARMS LENGTH
NEGOTIATIONS AMONG THE PARTIES, AND THAT SELLER IS FULLY SATISFIED AS TO THE
CONSIDERATION BEING RECEIVED BY SUCH SELLER IN CONNECTION WITH THE TRANSACTIONS.
SUCH SELLER ACKNOWLEDGES THAT THE CONSIDERATION PAYABLE TO OTHER FORMER
SHAREHOLDERS, OPTION HOLDERS AND EMPLOYEES IN CONNECTION WITH THE





                                      -40-
<PAGE>   66

TRANSACTIONS MAY VARY AND BE DISPARATE, BUT SUCH SELLER HAS REVIEWED AND
UNDERSTANDS THE SAME AND THE CONSIDERATION BEING PAID TO ALL SUCH PARTIES IN
CONNECTION WITH THE TRANSACTIONS AND BELIEVES THE SAME IS FAIR AND EQUITABLE.
SUCH SELLER ACKNOWLEDGES THAT HE OR SHE SHALL HAVE ABSOLUTELY NO CLAIMS, CAUSES
OF ACTION OR OTHER RIGHTS OF ANY NATURE WHATSOEVER AGAINST CYBERGUARD OR ANY OF
ITS AFFILIATES IN CONNECTION WITH ANY OF THE TRANSACTIONS AS THEY RELATE TO ACTS
OR OMISSIONS OF ANY PARTY OTHER THAN CYBERGUARD OR ARCA (EXCEPT ACTS OF ANY
EMPLOYEE OF ARCA) OR IN CONNECTION WITH ANY TRANSACTION WHICH IS NOT EFFECTUATED
BY AN AGREEMENT TO WHICH CYBERGUARD OR ARCA IS A PARTY. EACH NON-EMPLOYEE SELLER
FURTHER ACKNOWLEDGES THAT HE OR SHE FULLY UNDERSTANDS THE PROVISIONS RELATING TO
AND THE RAMIFICATIONS OF SELLING AND ASSIGNING TO BUYER THE ABILITY TO GRANT THE
RELEASE CONTAINED IN SECTION 2(A) HEREOF AND HAS BEEN STRONGLY URGED TO FULLY
DISCUSS SAME WITH HIS OR HER INDEPENDENT LEGAL COUNSEL AND BUSINESS ADVISORS.
SUCH SELLER HAS MADE HIS OR HER OWN INDEPENDENT EVALUATION OF THE VALUE OF THE
CONSIDERATION PAYABLE TO HIM OR HER AND THE OTHER TERMS AND CONDITIONS OF THE
TRANSACTION WITHOUT RELIANCE ON ANY PARTY OTHER THAN TO THE EXTENT HE OR SHE HAS
RELIED ON HIS OR HER INDEPENDENT LEGAL COUNSEL AND BUSINESS AND TAX ADVISORS.

                                    (viii) Such Seller has not employed any
broker, finder or agent, or agreed to pay or incurred any brokerage fee, finders
fee or commission with respect to the transactions contemplated by this
Agreement, or dealt with anyone purporting to act in the capacity of a broker,
finder or agent with respect thereto as a result of which any claim for a fee
can be asserted against Buyer. (b) REPRESENTATIONS AND WARRANTIES OF CERTAIN
SELLERS WITH RESPECT TO EXHIBIT B. Subject to the limitations in Section 6
hereof, each Founder and each Non-Employee Seller (each a "CONTRIBUTING SELLER")
also represents and warrants to Buyer as to the matters set forth on EXHIBIT B
hereto.

                  SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER.

                  Buyer represents and warrants to each Seller that:

                           (a) This Agreement has been duly authorized, executed
and delivered by or on behalf of Buyer. The execution and delivery by Buyer of,
and the performance by Buyer of its obligations under, this Agreement, will not
contravene any provision of applicable law, or the articles of incorporation or
by-laws of Buyer, or any agreement or other instrument binding upon Buyer or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over Buyer, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by Buyer of its obligations under this Agreement except such as may
be required by the securities or Blue Sky laws of the various states in
connection with the sale of the Shares by Seller to Buyer; provided, however,
that this Agreement may be subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights, to general equity principles. Buyer has the legal right and
power, and all authorizations and approvals required by law, to enter into this
Agreement, and to purchase the Shares to be sold by Seller.

                           (b) Buyer is not purchasing the Shares with a view
to, or for sale in connection with, a distribution of the Shares within the
meaning of the Securities Act of 1933, as amended (the "1933 Act"). However,
Buyer intends to effect a sale of the Transferred Interests and Assets following
execution of this Agreement, including a sale of the Shares to CyberGuard.

                           (c) Buyer has had access to all information regarding
CyberGuard and its present and prospective business, assets, liabilities and
financial condition that Buyer reasonably considers important in making the
decision to acquire the Shares, and Buyer has had ample opportunity to ask
questions of CyberGuard's representatives concerning such matters and this
investment.





                                      -41-
<PAGE>   67

                           (d) Buyer is fully aware of: (i) the highly
speculative nature of the Shares; (ii) the financial hazards involved; (iii) the
lack of liquidity of the Shares and the restrictions on transferability of the
Shares (E.G., that Buyer may not be able to sell or dispose of the Shares or use
them as collateral for loans); (iv) the qualifications and backgrounds of the
management of CyberGuard; and (v) the tax consequences of acquiring the Shares.

                           (e) Buyer has a preexisting personal or business
relationship with the Sellers, CyberGuard and/or certain of its officers and/or
directors of a nature and duration sufficient to make Buyer aware of the
character, business acumen and general business and financial circumstances of
CyberGuard and/or such officers and directors. By reason of Buyer's business or
financial experience, Buyer is capable of evaluating the merits and risks of
this transfer, has the ability to protect Buyer's own interests in this
transaction and is financially capable of bearing a total loss of the Shares.

                           (f) At no time was Buyer presented with or solicited
by any publicly issued or circulated newspaper, mail, radio, television or other
form of general advertising or solicitation in connection with the Shares.

                           (g) Buyer understands and acknowledges that, in
reliance upon the representations and warranties made by Buyer herein, the
Shares are not being registered with the Securities and Exchange Commission
("SEC") under the 1933 Act or being qualified under the California Corporate
Securities Law of 1968, as amended (the "LAW"), but instead are being
transferred under an exemption or exemptions from the registration and
qualification requirements of the 1933 Act and the Law which impose certain
restrictions on Buyer's ability to transfer the Shares.

                           (h) Buyer understands that Buyer may not transfer any
Shares unless such Shares are registered under the 1933 Act or qualified under
the Law or unless exemptions from such registration and qualification
requirements are available. Buyer understands that only CyberGuard may file a
registration statement with the SEC or the California Commissioner of
Corporations and that CyberGuard is under no obligation to do so with respect to
the Shares. Buyer has also been advised that exemptions from registration and
qualification may not be available or may not permit Buyer to transfer all or
any of the Shares in the amounts or at the times proposed by Buyer.

                           (i) In addition, Buyer has been advised that SEC Rule
144 promulgated under the 1933 Act, which permits certain limited sales of
unregistered securities, is not presently available with respect to the Shares
and, in any event, requires that the Shares be held for a minimum of one year,
and in certain cases two years, after they have been purchased AND PAID FOR
(within the meaning of Rule 144), before they may be resold under Rule 144.

                  SECTION 6. INDEMNITY. (a) Subject to the limitations set forth
in this Section 6, each Seller agrees to indemnify and hold harmless Buyer and
its successors and assigns from, against and in respect of, the full amount of
any and all liabilities, damages, claims, deficiencies, fines, assessments,
losses, taxes, penalties, interest, costs and expenses, including without
limitation, reasonable fees and disbursements of counsel (collectively "LOSSES")
arising from, in connection with, or incident to: (i) any breach or violation of
any of the representations, warranties, covenants or agreements of such Seller
contained in this Agreement or in any document or certificate delivered to Buyer
by Seller in connection herewith; and (ii) any and all actions, suits,
proceedings, demands, assessments, judgments, costs and expenses incidental to
any of the foregoing. Such indemnification shall be joint and several for the
Contributing Sellers with respect to any breach or violation of the
representations and warranties set forth on EXHIBIT B hereto. On the terms and
subject to the conditions set forth in this Agreement, the portion of the
Consideration payable by Buyer set forth next to the name of each Contributing
Seller under the caption "Amount of Consideration held in Escrow" on EXHIBIT A
hereto, shall be delivered to State Street Bank and Trust Company of California,
N.A., as escrow agent (the "ESCROW AGENT"), to be held and delivered in
accordance with an Escrow Agreement (the "ESCROW AGREEMENT") in the form
attached hereto as EXHIBIT C (the "ESCROWED CONSIDERATION"). The Escrowed
Consideration represents security for the performance by




                                      -42-
<PAGE>   68

each Contributing Seller of its indemnity obligations under this Agreement. The
Escrow Agreement will provide for the Escrowed Consideration to be held until
the first anniversary of the Closing Date or such longer period pending
resolution of any outstanding claims thereunder. The fees, costs and expenses of
the Escrow Agent shall be paid by Buyer. Each Contributing Seller hereby
consents to the terms of the Escrow Agreement.

                           (b) Buyer shall, with respect to claims asserted
against such party by any third party, give written notice to each Seller to
whom the claim relates of any liability which might give rise to a claim for
indemnity under this Agreement within ten business days of the receipt of any
written claim from any such third party, and with respect to other matters for
which the Buyer may seek indemnification, give prompt written notice to each
Seller to whom the claim relates; provided, however, that any failure to give
such notice will not waive any rights of Buyer except to the extent the rights
of a Seller are materially prejudiced. Buyer shall contest and defend such
claims, acting reasonably and in accordance with good faith business judgment,
with counsel reasonably satisfactory to a majority of the Sellers to whom the
claim relates, and shall not effect any settlement thereof without the consent
of such Sellers, which consent shall not be unreasonably withheld. Each Seller
to whom the claim relates shall have the right to participate in such
proceedings and to be represented by separate attorneys of its choice and at its
own expense. Buyer and Sellers agree to afford one another the opportunity to be
present at, and to participate in, conferences with all Persons asserting claims
for which indemnification is sought hereunder. Buyer and Sellers shall cooperate
with and assist the other to the extent lawful and reasonably possible. Sellers
shall be kept fully informed of the defense of any such claim at all stages
thereof. In the event that Buyer fails to timely and in good faith defend
against any such claim, each Seller to whom the claim relates shall, after
providing three days prior written notice to Buyer, have the right, but not the
obligation, to defend and settle the same. In the event that such Seller is,
directly or indirectly, conducting a defense against any such claim, the Buyer
shall cooperate with such Seller in any such defense and make available to it
all such witnesses, records, materials and information in its possession or
under its control.

                           (c) Except as otherwise set forth herein, no Seller
shall have any obligation under the indemnification provisions set forth in
Section 6 or for any breach of the representations and warranties contained in
EXHIBIT B hereto, unless notice of a claim in respect of any matter has been
given such party on or before the first anniversary of the date hereof. For each
Contributing Seller, except for any claim involving fraud or criminal acts of
such Contributing Seller, the sole and exclusive remedy of Buyer for any breach
of any representation or warranty set forth in EXHIBIT B hereto by such
Contributing Seller in this Agreement shall be the indemnification provisions
contained in this Section 6, and the liability incurred by such Seller (other
than the Founders) for any such breaches shall not exceed the amount of Escrowed
Consideration for such Seller. With respect to the Founders, the liability for
any breach of any representation or warranty set forth in EXHIBIT B hereto
incurred by each such individual will not exceed the amount of Escrowed
Consideration for such individual plus an additional $66,666.67 for each such
individual (the "ADDITIONAL INDEMNITY AMOUNTS"). Any and all amounts determined
to be owed by any Contributing Seller by reason of this Section 6 as a result of
a breach of the representations and warranties contained in EXHIBIT B hereto by
any Contributing Seller shall be satisfied first out of the Escrowed
Consideration (on a pro rata basis among all the Contributing Sellers based on
their respective pro rata percentages of Escrowed Consideration remaining in the
Escrow at the time of satisfaction of such indemnification obligation) by return
to Buyer by the Escrow Agent of the amount of the Consideration paid equal to
the amount of any such indemnity obligation (up to and not to exceed the amount
of Escrowed Consideration), and then out of the Additional Indemnity Amounts (on
an equal basis) if additional amounts are owed. Any amounts determined to be
owed by any Seller by reason of this Section 6 as a result of a breach of the
representations and warranties contained in this Agreement other than in EXHIBIT
B hereto by any Seller shall also be satisfied first out of (i) any Escrowed
Consideration contributed by such Seller by return to Buyer by the Escrow Agent
of the amount of the Consideration paid equal to the amount of any such
indemnity obligation and (ii) the Additional Indemnity Amounts, to the extent
contributed by such Seller.



                                      -43-
<PAGE>   69

                           (d) Notwithstanding the foregoing, the Contributing
Sellers shall not be liable to Buyer for a breach of the representations or
warranties set forth in EXHIBIT B hereto to the extent that the cause of such
breach (i) is due to an action by CyberGuard or its affiliates (excluding Arca
and any of its employees) following the Prior Acquisition Date (as defined in
EXHIBIT B), (ii) in the case of Section 4.24 of EXHIBIT B, is due to an omission
with respect to any ERISA Plan of CyberGuard or its affiliates not by its terms
designed to cover Arca, (iii) in the case of Section 4.29 of EXHIBIT B, is due
to the failure by CyberGuard to pass along to Arca any notice discussed in such
Section and received by CyberGuard but not Arca, or (iv) in the case of Section
4.25, is due to consents, approvals, authorizations or filings generally
required in connection with the transactions contemplated by the Transaction
Documents, but not specific or related to the nature of Arca's business, all of
the foregoing limitations in (i), (ii), (iii) and (iv) applying only to the
extent that none of such Contributing Sellers had any knowledge of such breach.

                  SECTION 7. SURVIVAL OF THE REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the parties contained in this Agreement shall
survive the execution and delivery hereof until the expiration of the applicable
statute of limitations, with the exception of the representations and warranties
contained in EXHIBIT B hereto which shall continue only until the first
anniversary of the date hereof. None of the representations and warranties of
the parties contained in this Agreement shall be affected by an examination made
for or on behalf of any party to whom such representation is made or the
knowledge of any of such party's officers, directors, shareholders, employees or
agents.

                  SECTION 8. FILINGS; FURTHER ASSURANCES. Each Seller will
execute, deliver, file and record any specific assignment or other paper and
take any other action that may be necessary or desirable, or that Buyer may
reasonably request, to enable Buyer to exercise and enforce its rights hereunder
with respect to the Transferred Interests and Assets purchased hereunder. Such
Seller further agrees to take such other actions as may be necessary or
desirable, or that Buyer may reasonably request, to assist Buyer in responding
to any inquiries, or defending any claims, that may be made by third parties
regarding the subject of, or related to, this Agreement or the Transaction
Documents. That assistance will include but not be limited to meeting with Buyer
and its attorneys at any reasonable times and upon reasonable notice to provide
a statement or statements concerning any matters related to this Agreement or
the Transaction Documents. Buyer shall reimburse such Seller for all reasonable
out-of-pocket costs and expenses incurred in connection with the assistance
rendered pursuant to the preceding two sentences. Buyer shall endeavor to limit
the extent of the Seller's time utilized in connection with the assistance to be
rendered pursuant to such sentences to the extent reasonably necessary or useful
to Buyer.

                  SECTION 9. AGREEMENT TO TAKE NECESSARY AND DESIRABLE ACTIONS.
Sellers and Buyer each agree to execute and deliver such other documents,
certificates and agreements and to take such other actions as may be reasonably
necessary or reasonably appropriate to consummate the transactions contemplated
hereby.

                  SECTION 10. WAIVERS, NON-EXCLUSIVE REMEDIES. No failure on the
part of Buyer to exercise, and no delay in exercising and no course of dealing
with respect to, any right under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise by Buyer of any right under
this Agreement preclude any other or further exercise thereof or the exercise of
any other right. The rights in this Agreement are cumulative and are not
exclusive of any other remedies provided by law or contract.

                  SECTION 11. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including by
facsimile or similar writing) and shall be given:

                           (a)      if to Buyer, to:

                                    Exodus Communications, Inc.
                                    2650 San Tomas Expressway
                                    Santa Clara, California 95051








                                      -44-
<PAGE>   70

                                    Attention: Adam W. Wegner
                                    Phone: (408) 346-2200
                                    Fax: (408) 346-2206












































                                      -45-
<PAGE>   71


                                    with copies to:

                                    Fenwick & West LLP
                                    Two Palo Alto Square
                                    Palo Alto, CA 94306
                                    Attn:  Eileen Duffy Robinett, Esq.
                                    Phone: (650) 494-0600
                                    Fax: (650) 494-1417

                           (b) if to Seller, to the address set forth on EXHIBIT
A hereto or such other address or facsimile number as such party may hereafter
specify by notice to the other parties. Each such notice, request or other
communication shall be effective (i) if given by facsimile, when such facsimile
is transmitted to the facsimile number specified in this section and the
appropriate written acknowledgment of receipt is received, or (ii) if given by
any other means, when delivered at the address specified in this section.

                  SECTION 12. SEVERABILITY. If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of Buyer in order to
carry out the intentions of the parties hereto as nearly as may be possible; and
(ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.

                  SECTION 13. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
successors and assigns; PROVIDED that this Agreement may not be assigned by
Seller without the written consent of the Buyer. CyberGuard shall be a third
party beneficiary of this Agreement. All representations, warranties, covenants
and agreements in this Agreement, with the exception of those set forth on
EXHIBIT B hereto, shall also be for the benefit of CyberGuard. The Parties
acknowledge that CyberGuard has provided sufficient consideration to receive
such third party beneficiary rights. Notwithstanding the foregoing, CyberGuard
shall have no rights to the Escrowed Consideration.

                  SECTION 14. COUNTERPARTS. This Agreement may be executed in
one or more counterparts all of which shall together constitute one and the same
instrument.

                  SECTION 15. GOVERNING LAW. This Agreement shall be construed
in accordance with and governed by the laws of the State of California
applicable to contracts wholly made and performed in the State of California.

                  SECTION 16. ENTIRE AGREEMENT; AMENDMENT. This Agreement
embodies the entire agreement of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements with respect thereto. This
Agreement may be amended, and any provision hereof waived, but only in writing
signed by the party against whom such amendment or waiver is sought to be
enforced. Each Seller acknowledges and agrees that Buyer will prepare and
release one or more press releases and/or public announcements with respect to
the transactions contemplated hereby. Buyer shall discuss any such press
releases with William F. Wilson and give him a reasonable opportunity to comment
thereon prior to public dissemination thereof. No Seller shall cause to be
issued or made, or permit his agents and advisors to issue or make, any press
release or other announcement, disclosure or statement concerning this Agreement
or the transactions contemplated hereby, without the prior written consent of
Buyer. Nothing contained herein shall prevent any party from at any time
furnishing any information to any governmental authority which it is by law or
otherwise so obligated to disclose or from making any disclosure which its
counsel deems necessary or advisable in order to fulfill such party's disclosure
obligations under applicable





                                      -46-
<PAGE>   72

law, including the Securities Act of 1933 or the Securities Exchange Act of
1934, or the rules of The Nasdaq Stock Market.

                  SECTION 17. THE REPRESENTATIVE AND RELATIONS AMONG SELLERS.

                           (a) APPOINTMENT OF ACTIONS. Each Contributing Seller
hereby appoints William F. Wilson (the "REPRESENTATIVE") as his or her agent and
representative under the Escrow Agreement. Representative shall not have any
duties or responsibilities except those expressly set forth in the Escrow
Agreement. Representative shall not be a trustee for any Contributing Seller or
have any fiduciary duty to any Contributing Seller. Neither Representative nor
any of agents shall be responsible to any Contributing Seller for any action
taken or omitted to be taken by him or them hereunder or under the Escrow
Agreement, except for his or their own gross negligence or willful misconduct.
Representative shall take such action with respect to the Escrow Agreement as
shall be directed by a majority in interest of the Contributing Sellers (the
"MAJORITY SELLERS").

                           (b) INDEMNIFICATION. Each Contributing Seller agrees
to indemnify Representative, ratably in accordance with their proportionate
interest in the Escrowed Consideration, for any and all liabilities,
obligations, losses, damages, costs or disbursements of any kind which may at
any time be imposed on, incurred by or asserted against Representative in any
way relating to or arising out of this Agreement, the Escrow Agreement or the
related transactions, except to the extent they arise from Representative's
gross negligence or willful misconduct.

                           (c) RESIGNATION OR REMOVAL OF REPRESENTATIVE. Subject
to the appointment and acceptance of a successor Representative as provided
below, Representative may resign at any time by giving notice thereof to the
Contributing Sellers, and Representative may be removed at any time with or
without cause by the Majority Sellers. Upon any such resignation or removal, the
Majority Sellers shall have the right to appoint a successor Representative,
which Representative shall be reasonably acceptable to Buyer. If no successor
Representative shall have been appointed by the Majority Sellers and shall have
accepted such appointment within 30 days after the retiring Representative's
giving of notice of resignation or the Majority Sellers' removal of the retiring
Representative, then the retiring Representative may, on behalf of the Sellers,
appoint a successor Representative which is reasonably acceptable to Buyer. Upon
the acceptance of any appointment as Representative hereunder by a successor
Representative, such successor Representative shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Representative and the retiring Representative shall be discharged from his
duties and obligations hereunder. After any retiring Representative's
resignation or removal hereunder as Representative, the provisions of this
Section 17 shall continue in effect for his or her benefit in respect of any
actions taken or omitted to be taken by him or her while acting as
Representative.

                  IN WITNESS WHEREOF, this Agreement has been signed by or on
behalf of each of the parties hereto as of the date first above written.

                                     BUYER:

                                     EXODUS COMMUNICATIONS, INC.

                                     By:
                                        -------------------------------------

                                     Name:
                                          -----------------------------------

                                     Title:
                                           ----------------------------------





                                      -47-
<PAGE>   73

                                   SELLER:
                                          ---------------------------------

                                   Name:
                                        -----------------------------------

                                   Signature:
                                             ------------------------------




























                                      -48-
<PAGE>   74


                                      BUYER:

                                      EC ACQUISITIONS CORP.

                                      By:
                                         --------------------------------

                                      Name:
                                           ------------------------------

                                      Title:
                                            -----------------------------










































                                      -49-
<PAGE>   75



                           STOCK POWER AND ASSIGNMENT
                         SEPARATE FROM STOCK CERTIFICATE

                  FOR VALUE RECEIVED and pursuant to that certain Claims and
Stock Purchase Agreement dated as of September ___, 1998, (the "AGREEMENT"), the
undersigned hereby sells, assigns and transfers unto Exodus Communications,
Inc., _____ shares of the Common Stock of CyberGuard Corporation, a Florida
corporation (the "COMPANY"), standing in the undersigned's name on the books of
the Company represented by Certificate No(s). _____ delivered herewith, and does
hereby irrevocably constitute and appoint _________________________ as the
undersigned's attorney-in-fact, with full power of substitution, to transfer
said stock on the books of the Company. THIS ASSIGNMENT MAY ONLY BE USED AS
AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS THERETO.

Dated:  September ___, 1998

                       SELLER:


                       -----------------------------------------------------
                       (Please Print Name)


                       -----------------------------------------------------
                       (Signature)

                        By*:
                            ------------------------------------------------
                               (Print name of authorized signatory)

                               ---------------------------------------------
                               (Print title of authorized signatory)



 INSTRUCTIONS: Please do not fill in any blanks other than the signature lines.

MEDALLION SIGNATURE GUARANTEE**





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

*    Trustees, officers and other fiduciaries or agents should indicate their
     title or capacity and print their names under their signatures AND SHOULD
     ATTACH EVIDENCE OF THEIR AUTHORITY TO ACT IN THIS CAPACITY ON BEHALF OF THE
     REGISTERED HOLDER OF THE STOCK.

**   Your signature must be guaranteed and stamped by an eligible guarantor
     institution (banks, stockbrokers, savings and loan associations and credit
     unions with membership in an APPROVED SIGNATURE GUARANTEE MEDALLION
     PROGRAM), pursuant to S.E.C. Rule 17Ad-15.


<PAGE>   76



                                    EXHIBIT B

         In order to induce Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, each Contributing Seller hereby represents
and warrants to Buyer as follows:

         4.1 ORGANIZATION, STANDING AND POWER. As of the date of consummation
(the "PRIOR ACQUISITION Date") of the acquisition of Arca by CyberGuard pursuant
to the Merger Agreement (the "ARCA ACQUISITION"), Arca was, and as of the
Closing Date, Arca is, a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation.

         4.2 AUTHORITY; LEGAL, VALID AND BINDING AGREEMENT. Arca had full and
unrestricted right, power and authority to enter into and consummate the
transactions contemplated by the Merger Agreement. To Seller's knowledge, at the
time of the Arca Acquisition, each of the shareholders and option holders of
Arca had their residence in the state set forth opposite such Person's name on
Schedule 4.2 to the Merger Agreement. As of the Prior Acquisition Date, the
Merger Agreement and all other agreements executed by Arca in connection with
any of the transactions contemplated thereunder constituted the legal, valid and
binding obligations of Arca, enforceable in accordance with their respective
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and general principles of equity. The execution,
delivery and performance of the Merger Agreement by Arca and the consummation by
it of the transactions contemplated thereby were duly and effectively authorized
by all requisite corporate action on the part of Arca, including approval of the
shareholders of Arca.

         4.3 AUTHORITY TO DO BUSINESS. Arca has all requisite power and
authority to own and operate its properties and to conduct its business in the
manner and in the jurisdictions where now conducted and where conducted at the
time of the Arca Acquisition. Schedule 4.3 to the Merger Agreement sets forth,
as of the Prior Acquisition Date and as of the Closing Date, (i) those
jurisdictions in which Arca owns or leases properties and (ii) all jurisdictions
in which Arca was or is qualified to do business. As of the Prior Acquisition
Date, Arca was, and as of the Closing Date, Arca is, duly qualified to do
business as a foreign corporation in all jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect (as defined in the Merger Agreement) on Arca.

         4.4 ARTICLES OF INCORPORATION, BYLAWS AND MINUTE BOOKS. A true and
complete copy of the Articles or Certificate of Incorporation (as amended and in
effect), Bylaws (as amended and in effect) and minute books of Arca was
delivered by Arca to CyberGuard prior to the Prior Acquisition Date. Such minute
books of Arca in the form of the copies supplied to CyberGuard have embodied
therein copies of all minutes and actions by written consent which had been
prepared since such entity's inception and prior to the Prior Acquisition Date.
The minutes and actions by written consent delivered to Arca reflect all
material actions taken by the Boards of Directors, any committees thereof, the
incorporators or the Shareholders of Arca since their incorporation.

         4.5 SUBSIDIARIES. Arca had no, as of the Prior Acquisition Date, and
has no, as of the Closing Date, direct or indirect equity interest by stock
ownership or otherwise in any other






                                      -51-
<PAGE>   77

Person nor was or is Arca engaged in a partnership, joint venture or other
similar arrangement (whether written or oral) with any Person.

         4.6 CAPITALIZATION. As of the date of the Arca Acquisition, the
authorized capital stock of Arca consisted of: (i) 20,000,000 shares of Arca
Common Stock, of which 3,726,667 shares were issued and outstanding; and (ii)
10,000,000 shares of Arca Preferred Stock, of which (A) 100,000 shares were
designated Arca Series A Preferred Stock and of which 76,130 shares of Arca
Series A Preferred Stock were issued and outstanding, and (B) 750,000 shares
were designated Arca Series B Preferred Stock and of which 515,000 shares of
Arca Series B Preferred Stock were issued and outstanding. To Seller's
knowledge, as of the date of the Arca Acquisition, all of the issued and
outstanding shares of Arca Common Stock and Arca Preferred Stock were owned
beneficially and of record by Persons and in the amounts set forth on Schedule
4.6 to the Merger Agreement, free and clear of any and all liens, claims,
charges, security interests, voting agreements or encumbrances of any nature
whatsoever created by Arca. As of such date, Arca had no treasury shares. As of
the date of the Arca Acquisition and as of the date hereof, all shares of Arca's
outstanding capital stock had been duly authorized, were validly issued and
outstanding, and were fully paid and nonassessable. No securities issued by Arca
from the date of its incorporation to the date hereof were issued in violation
of any statutory, contractual or common law preemptive rights. There are no
dividends or distributions which have accrued or been declared but are unpaid on
the capital stock of Arca. Except as set forth on Schedule 4.6 to the Merger
Agreement, Arca has not declared or paid any dividends or distributions since
December 31, 1997. All taxes (including documentary stamp taxes) required to be
paid in connection with the issuance by Arca of Arca's capital stock have been
paid. All authorizations required to be obtained from or registrations required
to be effected with any Person in connection with the issuances of securities by
Arca from its date of incorporation to the date hereof have been obtained or
effected and all securities of Arca have been issued in accordance with the
provisions of all applicable securities and other laws. Arca did not have as of
the Prior Acquisition Date and does not have as of the Closing Date any equity
investment in any other corporation, association, partnership, joint venture or
other entity.

         4.7 RIGHTS, WARRANTS, OPTIONS. Except as set forth on Schedule 4.7 to
the Merger Agreement, as of the date of the Arca Acquisition and as of the
Closing Date, Arca had no commitment to issue or sell, had not granted, issued
or entered into any rights, subscriptions, warrants, options, conversion rights
or agreements of any kind ("OPTIONS") (other than the Merger Agreement) to
issue, purchase or to otherwise acquire, any shares of stock, or securities or
obligations of any kind convertible or exchangeable into any shares of stock of
any class of capital stock of Arca. As of the date of the Arca Acquisition, all
outstanding Options were held by the Persons and in the amount set forth on
Schedule 4.7 to the Merger Agreement. To Seller's knowledge, as of the date of
the Arca Acquisition, there were no Options (other than the Merger Agreement) to
purchase or to otherwise acquire, any shares of stock or other securities
presently owned by any Shareholder or other equity interest holder of Arca. As
of the date hereof, no Options remain outstanding.

         4.8 FINANCIAL STATEMENTS. Arca has delivered to CyberGuard and Buyer,
true and correct copies of the Financial Statements (as defined in the Merger
Agreement). In addition, Arca has delivered to Buyer true and correct copies of
its balance sheet as of August 31, 1998 and its income statement and cash flow
statement for the two-month period then ended (the "AUGUST FINANCIAL
STATEMENTS"). The Financial Statements and the August Financial Statements, as
of the dates thereof and for the periods covered thereby, present fairly, in all
material respects, the financial position, results of operations, and cash flows
of Arca. Except as otherwise noted in Schedule 4.8 to the Merger Agreement, the
Financial Statements and the August Financial




                                      -52-
<PAGE>   78

Statements were prepared in conformity with generally accepted accounting
principles applied on a consistent basis ("GAAP"), except the unaudited December
31, 1996 Financial Statements and the August Financial Statements do not have
notes and are subject to normal year-end adjustments, none of which are
material. The December 31, 1997 Financial Statements and supporting schedules
were audited by independent public accountants within the meaning of the rules
promulgated by the SEC. Arca's accounts receivable, as set forth in the
Financial Statements and the August Financial Statements, arose in the ordinary
course of business, constitute valid and undisputed claims which are not subject
to any counterclaims or offsets and are reasonably believed to be collectible at
their recorded amounts, net of any reserves for doubtful accounts, in accordance
with past practices and GAAP.

         4.9 ABSENCE OF UNDISCLOSED LIABILITIES. There was at the Prior
Acquisition Date and is as of the Closing Date no claim, liability, commitment
or obligation of any nature, whether absolute, accrued, contingent or otherwise,
and whether due or to become due, and, to the best of Arca's knowledge, there
was at the Prior Acquisition Date and is as of the Closing Date no basis for
assertion of any such claim, liability, commitment or obligation, which is not
included, disclosed or noted in the December 31, 1997 Financial Statements or
the August Financial Statements (i) except for liabilities incurred since
December 31, 1997 and August 31, 1998, respectively, in the ordinary course of
business consistent with past practice to Persons who are not, to Seller's
knowledge, Affiliates of any Party Shareholder of Arca (as defined in the Merger
Agreement) or any officer or director of Arca, (ii) except for matters that
would not be required to be recorded by GAAP where the claim, liability or
obligation involves an amount less than $10,000, (iii) except as set forth in
Schedule 4.9 to the Merger Agreement and as specifically cross-referenced
therein and (iv) except for the amount owing to CyberGuard as disclosed in
Schedule 1 hereto. Schedule 1 hereto, together with the Other Schedules to the
Merger Agreement, include a listing of all debts, liabilities and obligations of
Arca of any nature, whether due or to become due (including without limitation
absolute liabilities, accrued liabilities and contingent liabilities) as of the
Closing Date.

         4.10 TITLE TO PERSONAL PROPERTY AND CONDITION OF ASSETS. As of the
Prior Acquisition Date, Arca had, and as of the Closing Date, Arca has, good and
valid title to all personal property, as reflected on the December 31, 1997
Financial Statements and the August Financial Statements, respectively (other
than non-material property and inventory disposed of in the ordinary course of
business consistent with past practices to Persons who are not Affiliates of
Arca (as defined in the Merger Agreement) and other than changes in Arca's cash
balances) and to each item of personal property acquired since December 31,
1997, including, but not limited to, the Assets (as defined in the Asset
Purchase Agreement dated as of the date hereof among Exodus, Sub, CyberGuard and
Arca (the "ASSET PURCHASE AGREEMENT")), free and clear of any security
interests, liens, claims, charges or encumbrances whatsoever, except for liens
for Taxes not yet due and payable, statutory non-material mechanics and
materialmen's liens and except as set forth in Schedule 4.10 to the Merger
Agreement, with respect to the Prior Acquisition Date, and such Schedule 4.10
together with Schedule 1 hereto with respect to the Closing Date. Schedule 4.10
to the Merger Agreement contains a true and complete list of each item of
tangible personal property owned by Arca as of the Prior Acquisition Date having
a value in excess of $5,000. Schedule 1 hereto contains a true and complete list
of each item of tangible personal property owned by Arca as of the Closing Date
having a value in excess of $5,000. All equipment, machinery, fixtures and other
personal property then owned or utilized by Arca were as of the Prior
Acquisition Date in good operating condition taken as a whole and in a good
state of maintenance and repair, ordinary wear and tear excepted, and were as of
the Prior Acquisition Date adequate for the conduct of its business as then
conducted. All equipment, machinery, fixtures and other personal property owned
or utilized by Arca as of the Closing Date are in good






                                      -53-
<PAGE>   79

operating condition taken as a whole and in good state of maintenance and
repair, ordinary wear and tear excepted, and are as of the Closing Date adequate
for the conduct of its business as now conducted. Except for the leasehold
interests and other leased properties specifically identified in either Schedule
4.10 or 4.11 to the Merger Agreement, with respect to the Prior Acquisition
Date, and such Schedules 4.10 or 4.11 together with Schedule 1 hereto with
respect to the Closing Date, and software or other intellectual property subject
to a license in favor of Arca, there were as of the Prior Acquisition Date and
are as of the Closing Date no assets, including, but not limited to, the Assets,
owned by any third party which were or are used by Arca in the operations of its
business as then conducted or proposed to be conducted.

         4.11     REAL PROPERTY.

                  (a) As of the date of the Arca Acquisition and as of the date
hereof, Arca owned no real property.

                  (b) Schedule 4.11 to the Merger Agreement sets forth a list of
all of Arca's real property leases, as of the date of the Arca Acquisition, true
and complete copies of which have been provided or made available to CyberGuard
and Buyer. Schedule 1 hereto sets forth a list of all of Arca's real property
leases, as of the date hereof, true and complete copies of which have been
provided or made available to CyberGuard and Buyer. No notice of violation of
any ordinance or administrative regulation (including any zoning or building
law) had been received as of the Prior Acquisition Date or has been received as
of the Closing Date by Arca with respect to any real property leased by Arca.
Arca had not as of the Prior Acquisition Date and has not as of the Closing Date
breached or been in default of any provision of, and was and is currently in
full compliance with and not in breach or default of, Arca's real property
leases. The property leased by Arca was as of the Prior Acquisition Date and is
as of the Closing Date in a state of good maintenance and repair and is adequate
and suitable for the purposes for which it was then and is presently being used.
To Seller's knowledge, neither the whole nor any portion of such real property
was as of the Prior Acquisition Date or is as of the Closing Date being
condemned or otherwise taken by any public authority, nor was or is any such
condemnation or taking to Seller's knowledge threatened or contemplated.

         4.12 INSURANCE. Schedule 4.12 to the Merger Agreement sets forth a true
and complete list of all insurance policies providing insurance coverage of any
nature to Arca as of the date of the Arca Acquisition. Schedule 1 hereto sets
forth a true and complete list of all insurance policies providing insurance
coverage of any nature to Arca as of the date hereof. Since January 1, 1996,
timely notice of all material claims has been given under all such policies. All
premiums and other charges under such policies have been timely paid. Arca is
not, and was not at the date of the Arca Acquisition, in default under any such
policy. Arca is, and was at the date of the Arca Acquisition, in material
compliance with all such policies. Except as set forth on Schedule 4.12 to the
Merger Agreement, to Seller's knowledge, Arca has insurance policies of the type
and in amounts customarily carried by Persons conducting similar businesses.
Such insurance policies are sufficient in all material respects for compliance
with all requirements of law and all agreements to which Arca is a party or by
which any of its assets are bound. During the last five years, Arca has not been
refused insurance by any insurance carrier to which it has applied for
insurance. Except as set forth in Schedule 4.12 to the Merger Agreement or
Schedule 1 hereto, no claims involving an amount in excess of $10,000 have been
asserted under any of the foregoing insurance policies in the five years
preceding the date of the Merger Agreement.

         4.13 LABOR RELATIONS. Arca is not, and has not been, a party to or
otherwise bound by any labor or collective bargaining agreement and to Seller's
knowledge there have been





                                      -54-
<PAGE>   80

no attempts to organize a labor union with respect to any employees of Arca.
Except as noted on Schedule 4.13 to the Merger Agreement, to Seller's knowledge
no unfair labor practice complaints have been filed against Arca with any
governmental or regulatory agency, and Arca has not received any notice or
communication reflecting an intention or threat to file any such complaint. No
Person has notified Arca of any claim, and to Seller's knowledge, there is, as
of the date hereof, and there was, as of the Prior Acquisition Date, no basis
for any claim, against Arca arising out of any statute, ordinance or regulation
relating to discrimination with respect to employees or employment practices.
There is, as of the date hereof, and there was, as of the Prior Acquisition
Date, no strike, work stoppage or labor disturbance pending or, to Seller's
knowledge, threatened that involves any group of employees of Arca. Except as
set forth on Schedule 4.13 to the Merger Agreement and except for agreements
being terminated on the date hereof and except as otherwise required by law, the
terms of employment or engagement of all employees, agents, consultants and
professional advisors of Arca are such that their employment or engagement may
be terminated by not more than two weeks' notice given at any time without
liability for payment of compensation or damages and Arca has not entered into
any agreement or arrangement for the management of its business or any part
thereof other than with its directors or employees. Except as set forth on
Schedule 4.13 to the Merger Agreement, no consultant, employee or agent of Arca
has terminated his or her employment or business relationship with Arca since
December 31, 1997, except for consultants, employees or agents who have not
received compensation of $25,000 or more from Arca in any calendar year; and
Seller has, as of the date hereof, and had, as of the Prior Acquisition Date, no
knowledge that any such consultant, employee or agent presently intends to so
terminate or materially alter his or her relationship with Arca.

         4.14 LICENSES. Arca has, as of the date hereof, and had, as of the
Prior Acquisition Date, all material licenses, franchises, approvals,
certificates, permits, planning permissions and authorizations (a "LICENSE") of
any Person necessary for the conduct of its trade or business and all Licenses
are, as of the date hereof, and were, as of the Prior Acquisition Date,
presently in full force and effect and no action or claim is, as of the date
hereof, or was, as of the Prior Acquisition Date, pending, and no notice of any
such claim or action has, as of the date hereof, or had, as of the Prior
Acquisition Date, been received which threatens to revoke, vary, modify or
terminate any License or declare any License invalid in any respect. Arca is, as
of the date hereof, and was, as of the Prior Acquisition Date, being operated in
material compliance with all Licenses. A true and complete list of all Licenses
is set forth on Schedule 4.14 to the Merger Agreement. The execution, delivery
and performance of the Merger Agreement did not adversely affect the status of
any License nor permit such License to be terminated whether or not following
the giving of notice or making of payment.

         4.15 PROPRIETARY RIGHTS. Schedule 4.15 to the Merger Agreement sets
forth a true and complete list of all patents, patent rights, trademarks, trade
names, service marks, brands and registered copyrights (or pending registrations
and applications therefor) owned or used by Arca, as of the date hereof and as
of the Prior Acquisition Date (all such items together with each invention,
protocol, formula, software, trade secret, technology, product composition,
method or process including, but not limited to, the Intellectual Property (as
defined in the Asset Purchase Agreement) and the protocol analyzer, owned or
used by Arca being hereinafter referred to as "INTANGIBLE PROPERTY"), other than
commercially available software programs generally available to the public. Arca
owns, as of the date hereof, and owned, as of the Prior Acquisition Date, the
entire right, title and interest in and to, or is, as of the date hereof, and
was, as of the Prior Acquisition Date, licensed to use, the Intangible Property,
free and clear of any claim or conflict with the rights of others and no
royalties, honorariums or fees are, as of the date hereof, or were, as of the
Prior Acquisition Date, payable by Arca to any Person by reason of the ownership
or use




                                      -55-
<PAGE>   81

of the Intangible Property. Arca has, as of the date hereof, and had, as of the
Prior Acquisition Date, no knowledge of any act or failure to act by Arca or any
of its employees, duly authorized attorneys or agents during the prosecution or
registration of, or any other proceeding relating to any of the Intangible
Property or of any other fact, which could, or could have, as applicable, make
invalid or unenforceable, or negate the right to issuance of any of the
Intangible Property. The consummation of the Arca Acquisition did not alter or
impair any of the Intangible Property or the ability of the Surviving
Corporation (as defined in the Merger Agreement) to use any such Intangible
Property on the same terms and basis as theretofore used by Arca. Except as set
forth in Schedule 4.15 to the Merger Agreement, no interest in any Intangible
Property has been assigned, transferred, licensed or sublicensed by Arca to
third parties and there is not and, to Arca's knowledge, has not been any
infringement or asserted infringement by Arca of any foreign or domestic
patents, patent rights, trademarks, trade names, service marks, copyrights or
applications therefor of another. No claim is, as of the date hereof, or was, as
of the Prior Acquisition Date, pending by Arca against others to the effect that
the present or past operations of such parties infringe upon or conflict with
the rights of Arca and, to Seller's knowledge, no grounds for such action
exists, as of the date hereof, or existed, as of the Prior Acquisition Date. As
of the date hereof, Seller knows, and as of the Prior Acquisition Date, Seller
knew, of no pending or threatened cancellation or revocation of any agreement
granting to Arca rights relating to any Intangible Property. Arca has not
received any notice that any claim is pending that the operation by Arca of its
businesses or the manufacture or sale of any of its products or the provision of
its services, or any formula, method, process, part or material employed by it
in connection therewith, infringes or conflicts in any way upon any rights of
the type enumerated above owned by others. Each confidentiality or secrecy
agreement obtained by Arca with respect to any of the Intangible Property, is,
as of the date hereof, and was, as of the Prior Acquisition Date, in full force
and effect and Arca is not, as of the date hereof, and was not, as of the Prior
Acquisition Date, and to Seller's knowledge, no other party to any such
agreement is, as of the date hereof, or was as of the Prior Acquisition Date, in
default thereunder.

         4.16 MAJOR CUSTOMERS AND SUPPLIERS. Schedule 4.16 to the Merger
Agreement sets forth a true and complete list of all of the customers and
suppliers of Arca which, during either of the fiscal years ended December 31,
1996 or December 31, 1997, received from or paid to Arca $50,000 or more (in
cash or in kind); and such schedule sets forth with respect to each, the name
and address and dollar volume involved. Except as otherwise indicated on
Schedule 4.16 to the Merger Agreement with respect to the Prior Acquisition
Date, and such Schedule 4.16 together with Schedule 1 hereto with respect to the
Closing Date, no customer or supplier of Arca listed on Schedule 4.16 to the
Merger Agreement with respect to the Prior Acquisition Date, and such Schedule
4.16 together with Schedule 1 hereto with respect to the Closing Date, had, as
of the Prior Acquisition Date, or has, as of the date hereof, respectively, (i)
canceled, suspended or otherwise terminated its relationship with it (except for
expiration in the ordinary course of business), or (ii) advised Arca, any
executive officer or director of Arca of its intent to cancel, suspend or
otherwise terminate such relationship (except for expiration in the ordinary
course of business), or to materially decrease its services or supplies of
products to Arca or its purchases from Arca (except in the case of relationships
which expire in the ordinary course of business) or to materially increase the
price or change the terms on which it supplies or purchases services or products
to or of Arca, or to materially decrease the price or change the terms on which
it purchases services or products from Arca. Seller has, as of the date hereof,
and had, as of the Prior Acquisition Date, no knowledge that "current customers
or suppliers" (as defined below) could reasonably be expected to terminate or
decrease or adversely modify its business relationship with Arca by reason of
the transactions contemplated hereby. "Current customers or suppliers" means the
customers and suppliers listed on Schedule 4.16 to the Merger Agreement.






                                      -56-
<PAGE>   82

         4.17 LITIGATION. Except as set forth in Schedule 4.17 to the Merger
Agreement, there are, as of the date hereof, and there were, as of the Prior
Acquisition Date, no actions, suits, proceedings or investigations pending, or
to Seller's knowledge, directly or indirectly threatened, nor has any notice of
such items been received by Arca, as of the date hereof, or the Prior
Acquisition Date, in any court or before any governmental agency or
instrumentality against or materially affecting Arca or, to its knowledge, any
of its officers or directors nor, to its knowledge, has any such action, suit,
proceeding or investigation been pending during the five-year period preceding
the date hereof, nor have any such actions, suits, proceedings or investigations
been settled by Arca and/or adjudicated for an aggregate amount of $10,000 or
more during the past five years; provided, however, that the foregoing shall not
require disclosure of actions, suits or investigations relating to officers or
directors which are wholly unrelated to Arca. Except as set forth in Schedule
4.17 to the Merger Agreement, Seller has, as of the date hereof, and had, as of
the Prior Acquisition Date, no knowledge of any facts which could result in any
such action, suit, proceeding or investigation. Arca is, as of the date hereof,
and was, as of the Prior Acquisition Date, not in default with respect to any
order, writ, injunction or decree of any court, agency or instrumentality. To
the knowledge of Seller, there were not, as of the Prior Acquisition Date and
there currently are not, any actions, suits, proceedings or investigations
pending or threatened in any court or before any governmental agency or
instrumentality affecting any outstanding securities of Arca which could or
could have, as applicable, prevented, delayed or hindered the consummation of
the transactions contemplated by the Merger Agreement or could prevent, delay or
hinder the consummation of the transactions contemplated hereby. Seller has no
knowledge of any facts which could reasonably result in any such action, suit,
proceeding or investigation.

         4.18 NO VIOLATION OR CONFLICT. Except as set forth on Schedule 4.18 to
the Merger Agreement, the execution, delivery and performance of the Merger
Agreement by Arca and the consummation by it of the transactions contemplated
thereby, and compliance by it with the provisions thereof, (i) did not and will
not violate or conflict with any provision of law or regulation, or any writ,
order or decree of any court, governmental or regulatory authority or agency, or
any term or provision of Arca's Articles of Incorporation or Bylaws, (ii) did
not and will not, with or without the passage of time or the giving of notice,
or both, create any right on the part of any party to any material instrument or
Material Agreement (as defined in Section 4.28 below) to which Arca is a party,
to unilaterally modify, amend or terminate any such material instrument or
Material Agreement and (iii) did not and will not, with or without the passage
of time or the giving of notice, result in the breach of, or constitute a
default or require any consent or notice under, or result in the creation of any
lien, charge or encumbrance upon any property or assets (including, without
limitation, Intangible Property) of Arca pursuant to, any material instrument or
Material Agreement to which Arca is a party or by which Arca or any of its
properties are bound or affected.

         4.19 TRANSACTIONS WITH AFFILIATES. Except as set forth in Schedule 4.19
to the Merger Agreement, there are no, and since December 31, 1997 there have
been no, contracts, agreements or arrangements of any kind (including, but not
limited to those relating to, the sharing of overhead, intercompany loans, the
furnishing of services and the lease of facilities) between any Affiliate (as
defined in the Merger Agreement) of Arca, on the one hand, and Arca, on the
other hand. Without limiting the generality of the foregoing, except as set
forth on Schedule 4.19 to the Merger Agreement, (i) no Affiliate of Arca has, as
of the date hereof, or had, as of the Prior Acquisition Date, any interest in
any property (real or personal, tangible or intangible, or otherwise) used in
Arca's business, (ii) Arca has, as of the date hereof, or had, as of the Prior
Acquisition Date, no indebtedness to any shareholder, officer or director or any
of their Affiliates and (iii) Arca is, as of the date hereof, or was, as of the
Prior Acquisition Date, not






                                      -57-
<PAGE>   83

owed any indebtedness by any shareholder, officer or director or any of other
Affiliates. For purposes of this Section 4.19, "Affiliate of Arca" shall exclude
any person who became such solely as a result of the Arca Acquisition.

         4.20 LIST OF ACCOUNTS. Schedule 4.20 to the Merger Agreement contains a
list (including account numbers, where applicable) of (i) all banks and other
institutions in which Arca has, as of the date hereof, or had, as of the Prior
Acquisition Date, an account or safe deposit box and of all cash management,
money market and similar accounts of Arca and the addresses of all such
institutions and names and telephone numbers of the contact persons at such
institutions and (ii) the names of all persons authorized to draw thereon, make
withdrawals therefrom or have access thereto.

         4.21 LIST OF PERSONNEL. Schedule 4.21 to the Merger Agreement contains
as of the date of the ARCA ACQUISITION: the names of all incumbent directors and
officers of Arca; the names, job designations and annual compensation of all
Persons who have been employees or consultants of Arca since December 31, 1996;
a detailed itemization of all accrued but unpaid benefits, emoluments, sums or
amounts of any nature whatsoever (other than salaries accrued since the end of
the last payroll period) which are or may become due to any such employee or
consultant in connection with services rendered prior to such date, including,
but not limited to, accrued vacation and sick leave; and a true and complete
list of all employee policies, employee benefit manuals or other manuals
including employee work rules or policies, vacation policies, sick leave
policies, compensation plans, and any other employee benefit policies or benefit
plans then in effect for Arca. Schedule 1 hereto provides the foregoing
information as of October 2, 1998. Schedule 4.21 to the Merger Agreement, as of
the Prior Acquisition Date, and Schedule 1 hereto as of the Closing Date,
further sets forth any contracts or arrangements with any director, officer,
consultant or employee of Arca which provides for payments to be made to such
party in connection with the termination of any office or employment or
retention of such Person. Except as set forth in Schedule 1 hereto, since
December 31, 1997, Arca has not paid or given any increase in or improvement to
the benefits of any nature of or any bonus or compensation to any of its
directors, officers, consultants or employees, and Arca is not under any
obligation to increase or improve any such benefits or bonuses or compensation
with or without retrospective operation, except for increased sales commissions
paid or payable to any individual resulting solely from, and directly correlated
with, increased sales by such individual. Except as disclosed in Schedule 4.21
to the Merger Agreement, there were, as of the Prior Acquisition Date, no
amounts which were or to become due or owing to any employee or consultant of
Arca for any accrued benefit, emolument, bonus, sum or amount, including without
limitation, amounts due for accrued vacation or sick leave, except for salaries
accrued since the end of the last payroll period prior thereto. Except as
disclosed in Schedule 1 hereto, there are, as of the date hereof, no amounts
which are or may become due or owing to any employee or consultant of Arca for
any accrued benefit, emolument, bonus, sum or amount, including without
limitation, amounts due for accrued vacation or sick leave, except for salaries
accrued since the end of the last payroll period.

         4.22 GUARANTIES. Except as disclosed on Schedule 4.22 to the Merger
Agreement, Arca has, as of the date hereof, or had, as of the Prior Acquisition
Date, not guaranteed any obligation or indebtedness of any Person or granted any
power of attorney, and no Person has, as of the date hereof, or had, as of the
Prior Acquisition Date, guaranteed any obligation or indebtedness of Arca or
granted it a power of authority.

         4.23 YEAR 2000 COMPLIANCE. Except as set forth on Schedule 4.23 to the
Merger Agreement, Arca has, as of the date hereof, or had, as of the Prior
Acquisition Date, no contractual obligations with any of its customers or any
other Person which requires Arca to be




                                      -58-
<PAGE>   84

Year 2000 compliant. In the event Arca is, as of the date hereof, or was, as of
the Prior Acquisition Date, required to be Year 2000 compliant, Arca has, as of
the date hereof, and had, as of the Prior Acquisition Date, as applicable, taken
all necessary steps to comply with the requirements and terms of its contracts.

         4.24 EMPLOYEE BENEFIT PLANS. Schedule 4.24 to the Merger Agreement sets
forth a complete list of all pension, retirement, stock purchase, stock bonus,
stock ownership, stock option, profit sharing, savings, medical, disability,
hospitalization, insurance, deferred compensation, bonus, incentive, welfare or
any other employee benefit plan, policy, agreement, commitment, arrangement or
practice maintained, as of the Prior Acquisition Date, by Arca for any of
directors, officers, consultants, employees or former employees of Arca (the
"ARCA PLANS"). Schedule 1 hereto sets forth a complete list of all Arca Plans
maintained as of the date hereof by Arca for any of directors, officers,
consultants, employees or former employees of Arca. Schedule 4.24 to the Merger
Agreement, with respect to the Prior Acquisition Date, and such Schedule 4.24
together with Schedule 1 hereto with respect to the Closing Date, also identify
each Arca Plan which constitutes an "employee pension benefit plan" ("PENSION
PLAN") or an "employee welfare benefit plan" ("WELFARE PLAN"), as such terms are
defined in the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). None of the Arca Plans is a "multiemployer plan," as such term is
defined in ERISA, or is subject to Title IV of ERISA. Arca has delivered or made
available to CyberGuard and Buyer true and complete copies of the following for
each Arca Plan, if applicable: (i) the Plan document; (ii) summary plan
description of the Arca Plan; (iii) the trust agreement, insurance policy or
other instrument relating to the funding of the Arca Plan; (iv) the most recent
Annual Report (Form 5500 series) and accompanying schedules filed with the IRS
or Department of Labor with respect to the Arca Plan; (v) the most recent
audited financial statement for the Arca Plan; and (vi) the most recent
determination letter issued by the IRS with respect that to the Arca Plan that
is intended to qualify under Section 401(a) of the Code.

         Each Pension Plan has, as of the date hereof, and had, as of the Prior
Acquisition Date, been determined by the IRS to be qualified under Section
401(a) of the Code, and each such Plan remains so qualified; and to Seller's
knowledge, no facts or circumstances exist, as of the date hereof, or existed,
as of the Prior Acquisition Date, which could result in the revocation of such
qualification. Each Welfare Plan which is intended to meet the requirements for
tax-favored treatment under the Code to Seller's knowledge meets, as of the date
hereof, and met, as of the Prior Acquisition Date, such requirements. Each Arca
Plan has been administered in all material respects in accordance with its terms
and the Code, and each Pension Plan and Welfare Plan has been administered in
all material respects in accordance with ERISA. No facts or circumstances exist,
as of the date hereof, or existed, as of the Prior Acquisition Date, which might
give rise to any material liability with respect to any Arca Plan, to
CyberGuard, Arca, Acquisition or any of their Subsidiaries (as defined in the
Merger Agreement) or to any other Person. Arca has, as of the date hereof, and
had, as of the Prior Acquisition Date, paid all amounts required under
applicable law, any Pension Plan and any Welfare Plan to be paid as a
contribution to each Pension Plan and Welfare Plan through the date hereof. Arca
has, as of the date hereof, and had, as of the Prior Acquisition Date, set aside
adequate reserves to meet contributions which are or were not yet due under any
Pension Plan or Welfare Plan. Neither Arca, nor any other Person has, as of the
date hereof, or had, as of the Prior Acquisition Date, engaged in any
transaction or taken any other action with respect to any Arca Plan which would
subject Arca, CyberGuard, Acquisition or any of their Subsidiaries (as such
terms are defined in the Merger Agreement) or any other Person to: (A) any tax,
penalty or liability for prohibited transactions under ERISA or the Code; (B)
any tax under Code Sections 4971, 4972, 4976, 4977 or 4979; or (C) a penalty
under ERISA Sections 502(c) or 502(l). Arca, to the extent it is a fiduciary
with respect to any





                                      -59-
<PAGE>   85

Pension Plan or Welfare Plan, has, as of the date hereof, and had, as of the
Prior Acquisition Date, not breached any of its responsibilities or obligations
imposed upon fiduciaries under ERISA or the Code or which could result in any
material claim being made under, by or on behalf of any Pension Plan or Welfare
Plan or any participant or beneficiary thereof other than benefit claims in the
ordinary course of business. Each Welfare Plan which is a group health plan
within the meaning of Code Section 5000(b)(1) complies, as of the date hereof,
and complied, as of the Prior Acquisition Date, with and in each and every case
has complied with the applicable requirements of Code Section 4980B and Part 6
of Title I of ERISA. Except as set forth in Schedule 4.24 to the Merger
Agreement, with respect to the Prior Acquisition Date, and such Schedule 4.24
together with Schedule 1 hereto with respect to the Closing Date, no Arca Plan,
other than an Arca Plan which is an employee pension benefit plan (within the
meaning of Section 3(2)(A) of ERISA) provided, as of the Prior Acquisition Date
or, provides, as of the date hereof, benefits, including without limitation,
death, health or medical benefits (whether or not insured), with respect to
current or former employees of Arca beyond their retirement or other termination
of service with Arca, other than coverage mandated by applicable law.

         4.25 CONSENT OR APPROVAL OF GOVERNMENTAL AUTHORITIES. Except as set
forth on Schedule 4.25 to the Merger Agreement, no consent, approval or
authorization of, or filing with, any federal, state or local governmental
authority or administrative agency was required in connection with the
execution, delivery or performance by Arca of the Merger Agreement or any
agreement, instrument or document contemplated thereby or the consummation by
Arca of the transactions contemplated thereby. Except as set forth on Schedule 1
hereto, no consent, approval or authorization of, or filing with, any federal,
state or local governmental authority or administrative agency is required in
connection with the execution, delivery or performance by Arca of the
Transaction Documents or the consummation by Arca of the transactions
contemplated thereby.

         4.26 ABSENCE OF MATERIAL ADVERSE CHANGES. Except as set forth in
Schedule 4.26 to the Merger Agreement or Schedule 1 hereto, since December 31,
1997: (A) Arca has conducted its business in the ordinary and usual course; (B)
there has been no Material Adverse Effect (as defined in the Merger Agreement)
with respect to Arca; and (C) Arca has not engaged or agreed to engage in any of
the actions enumerated in the second sentence of SECTION 5.1 of the Merger
Agreement.

         4.27 TAXES. Except as set forth in Schedule 4.27 to the Merger
Agreement: (A) there have been timely filed all returns and reports with respect
to Arca required to be filed with any taxing authority with respect to Taxes for
any period ending on or before the date of this Agreement, taking into account
any extension of time to file granted to or obtained on behalf of Arca; (B) all
Taxes shown to be payable on such returns or reports that are due prior to the
date of this Agreement have been paid or shall be paid (prior to the date of
this Agreement) and that were due prior to the Merger Agreement were paid prior
to the Merger Agreement, and all such returns or reports accurately reflect the
proper amount of Taxes payable for the applicable periods; (C) no deficiency for
any Tax has been asserted or assessed by a taxing authority against or with
respect to Arca either as of the date hereof or as of the Prior Acquisition
Date; (D) Arca has, as of the date hereof, and had, as of the Prior Acquisition
Date, provided adequate reserves in its Financial Statements and its August
Financial Statements for any Taxes that were not or have not been paid, whether
or not shown as being due on any returns; (E) the income tax returns of Arca
have never been audited; and (F) Arca has, as of the date hereof, or had, as of
the Prior Acquisition Date, not waived any restrictions on assessment or
collection of Taxes or consented to the extension of any statute of limitations
relating to Taxes. As used in the Merger Agreement, "Taxes" shall mean any and
all taxes, fees, levies, duties, tariffs, imposts and other charges of any





                                      -60-
<PAGE>   86

kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any government or
taxing authority, including, without limitation: taxes or other charges on or
with respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value-added or gains taxes; license, registration and documentation fees; and
customers' duties, tariffs and similar charges.

         4.28 MATERIAL AGREEMENTS. Schedule 4.28 to the Merger Agreement sets
forth as of the date of the Arca Acquisition, and Schedule 1 hereto sets forth
as of the date hereof, a list of all written and oral agreements, leases
(whether capitalized or otherwise), arrangements or commitments to which either
Arca was or is, as applicable, a party or by which it or any of the assets it
owns, leases or utilizes is bound which were, or are, expected to result in the
receipt or payment of $10,000 or more (in cash or in kind) by Arca or which
were, or are, as applicable, material to the financial position, results of
operations or prospects of Arca on a consolidated basis or were material to the
ability of Arca to consummate the transactions contemplated by the Merger
Agreement (the "MATERIAL AGREEMENTS"). Arca has furnished CyberGuard and Buyer
with true and complete copies of all Material Agreements. The Material
Agreements set forth in Schedule 4.28 to the Merger Agreement were, as of the
Prior Acquisition Date, each in full force and effect, and were, as of the Prior
Acquisition Date, the valid and legally binding obligations of Arca and to
Seller's knowledge, were, as of the Prior Acquisition Date, valid and binding
obligations of the other parties thereto. Arca was, as of the Prior Acquisition
Date, not in breach of any Material Agreement set forth on Schedule 4.28 to the
Merger Agreement. The Material Agreements set forth in Schedule 1 hereto are, as
of the date hereof, each in full force and effect and are, as of the date
hereof, the valid and legally binding obligations of Arca and to Seller's
knowledge, are as of the date hereof, valid and binding obligations of the other
parties thereto. Arca is, as of the date hereof, not in breach of any Material
Agreement set forth on Schedule 1 hereto. The representations and warranties in
the two immediately preceding sentences are qualified to the extent affected by
the transactions contemplated between CyberGuard and Buyer pursuant to the Asset
Purchase Agreement. Schedule 1 identifies all those Material Agreements
currently in effect requiring third party consents to assign and transfer such
Material Agreements to Buyer in connection with the Transaction Documents.
Except as set forth on Schedule 4.28 to the Merger Agreement, Arca has, as of
the date hereof, and had, as of the Prior Acquisition Date, no: (A) agreement,
contract or commitment which requires the making of any charitable
contributions; (B) material agreement, contract or commitment which is not
terminable without penalty, liability or premium upon notice of 30 days or less;
(C) agreement, contract or commitment containing any severance provisions, or
any employment, consulting or similar agreement, contract or commitment; (D)
outstanding obligation for borrowed money; (E) outstanding loan or advance to
any Person; (F) power of attorney outstanding; (G) agreement, contract or
commitment relating to joint ventures, partnerships, debt or equity investments;
(H) agreements, contracts or commitments relating to non-competition or employee
non-disclosure, or non-solicitation or other similar restrictive covenants; (I)
agreements, contracts or commitments relating to the registration of any of
Arca's securities; and (J) agreement, contract or commitment relating to the
voting or other rights with respect to any securities of Arca. None of Arca's
contracts contains, or as of the Prior Acquisition Date contained, any
restrictions regarding the ability of Arca, CyberGuard or the Buyer to use or
offer any products or services nor do such contracts contain, as of the date
hereof, or contained as of the Prior Acquisition Date, any restrictions on Arca,
CyberGuard or Buyer, to pursue any business or customers.

         4.29 COMPLIANCE; GOVERNMENT AUTHORIZATION. Arca (and the properties
used by it) is, as of the date hereof, and was, as of the Prior Acquisition
Date, and has been, in





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material compliance with all federal, state, local and foreign laws, ordinances,
regulations, judgments, rulings, orders and other legal requirements applicable
to it, its properties or its operations. Arca has furnished CyberGuard and Buyer
with true and correct copies of all correspondence from governmental authorities
asserting that Arca is not or was not in material compliance with any laws,
ordinances, regulations, judgments, rulings, orders or other requirements. All
material deficiencies noted in any such report furnished to CyberGuard and Buyer
in accordance with this Section 4.29 have been corrected as of the date hereof
and as of the Prior Acquisition Date, as applicable. There is as of the date
hereof, and was, as of the Prior Acquisition Date, no existing governmental or
judicial order or decree directed expressly at Arca or its assets. Arca is, and
during the past five years has been, in material compliance with all defense
contract accounting standards and all related and similar standards, laws,
rules, regulations, guidelines and the like. A list of all material
investigations, proceedings, actions, notices, reports, assessments and
correspondence or other communications from or to any governmental entity during
the past five years with respect to defense contract accounting standards is set
forth on Schedule 4.29 to the Merger Agreement. Except as set forth on Schedule
4.29 to the Merger Agreement, no material deficiency has been asserted against
Arca with respect to the foregoing matters, and each such deficiency has been
corrected without cost or adverse impact to Arca.

         4.30 BROKERS AND FINDERS. Arca did not employ any financial advisor,
broker or finder and it did not incur any broker's, finder's or similar fees,
commissions or broker's or finder's expenses in connection with the transactions
contemplated by the Merger Agreement. Seller has not employed any financial
advisor, broker or finder and it has not incurred nor will incur any broker's,
finder's or similar fees, commissions or broker's or finder's expenses in
connection with the transactions contemplated by this Agreement.

         4.31 [RESERVED]

         4.32 NO PRIOR AGREEMENT. To Seller's knowledge, there was not, as of
the date of the Arca Acquisition, any written or oral agreement or understanding
with respect to the disposition of any securities of Arca owned by any of the
Party Shareholders (as defined in the Merger Agreement), any portion thereof, or
any rights attendant or relating thereto, other than the Merger Agreement.

         4.33     ENVIRONMENTAL MATTERS.

                  (a) DEFINITIONS. For purposes of the Merger Agreement, the
following terms shall have the following meanings: (A) "Hazardous Substances"
means: (i) those substances defined in or regulated under the following federal
statutes and their state counterparts, as each may be amended from time to time,
and all regulations thereunder: the Hazardous Materials Transportation Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking
Water Act, the Atomic Energy Act, the Federal Insecticide, Fungicide, and
Rodenticide Act, the Toxic Substances Control Act and the Clean Air Act; (ii)
petroleum and petroleum products, byproducts and breakdown products including
crude oil and any fractions thereof; (iii) natural gas, synthetic gas, and any
mixtures thereof; (iv) polychlorinated biphenyls; (v) any other chemicals,
materials or substances defined or regulated as toxic or hazardous or as a
pollutant or contaminant or as a waste under any applicable Environmental Law;
and (vi) any substance with respect to which a federal, state or local agency
requires environmental investigation, monitoring, reporting or remediation; and
(B) "Environmental Laws" means any federal, state, foreign, or local law, rule
or regulation, now or hereafter in effect and as amended,


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<PAGE>   88

and any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment, relating to
pollution or protection of the environment, health, safety or natural resources,
including, without limitation, those relating to (i) releases or threatened
releases of Hazardous Substances or materials containing Hazardous Substances or
(ii) the manufacture, handling, transport, use, treatment, storage or disposal
of Hazardous Substances or materials containing Hazardous Substances.

                  (b) ENVIRONMENTAL STATUS. Except as described in Schedule 4.33
to the Merger Agreement: (A) Arca is, as of the date hereof, and was, as of the
Prior Acquisition Date, and has been in compliance with all applicable
Environmental Laws; (B) Arca has, as of the date hereof, and had, as of the
Prior Acquisition Date, obtained all permits, approvals, identification numbers,
licenses or other authorizations required under any applicable Environmental
Laws ("Environmental Permits") and is, as of the date hereof, and was, as of the
Prior Acquisition Date, and has been in compliance with their requirements; (C)
such Environmental Permits did not, in connection with the Arca Acquisition,
require the consent or approval of, or any filing with or notice to, any
governmental authority; (D) to Seller's knowledge, there are, as of the date
hereof, or were, as of the Prior Acquisition Date, no underground or aboveground
storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons
in which Hazardous Substances are being or have been treated, stored or disposed
of on any leased real property; (E) to Seller's knowledge, there is, as of the
date hereof, or was, as of the Prior Acquisition Date, no asbestos or
asbestos-containing material on any leased real property in violation of
applicable Environmental Laws; (F) Arca has, as of the date hereof, or had, as
of the Prior Acquisition Date, not released, discharged or disposed of Hazardous
Substances except in compliance with Environmental Laws at any real property
owned by any third party or any real property leased; (G) Arca is, as of the
date hereof, or was, as of the Prior Acquisition Date, not undertaking, and has
not completed, any investigation or assessment or remedial or response action
relating to any such release, discharge or disposal of or contamination with
Hazardous Substances at any site, location or operation, either voluntarily or
pursuant to the order of any governmental authority or the requirements of any
Environmental Law; and (H) there are, as of the date hereof, and were as of the
Prior Acquisition Date, no past or pending or, to the knowledge of Seller,
threatened actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, notices of liability or potential liability,
investigations, proceedings, consent orders or consent agreements relating in
any way to Environmental Laws, any Environmental Permits or any Hazardous
Substances against Arca which is outstanding or has been outstanding during the
past two years, and to Seller's knowledge, there are, as of the date hereof, or
were, as of the Prior Acquisition Date, no circumstances that could be expected
to form the basis for any of the foregoing. Arca has made available to
CyberGuard and Buyer copies of any environmental reports, studies or analyses in
its possession relating to owned or leased real property or the operations of
Arca.

         4.34 PROPOSALS. Schedule 4.35 to the Merger Agreement, with respect to
the Prior Acquisition Date, and such Schedule 4.35 together with Schedule 1
hereto with respect to the Closing Date, sets forth a list of all written and
oral proposals and offers pursuant to which since December 31, 1997, Arca has
proposed or offered to provide services and which remain open for possible
acceptance. Arca has furnished CyberGuard and Buyer with true and correct copies
of all of such proposals and offers.

         4.35 GOVERNMENT CONTRACTS AND AUDITS. Since December 31, 1997, Arca has
not experienced a decrease in Independent Research And Development (IRAD or
similar items) or IRAD funding (or commitments for the same) from any
governmental entity. To Seller's knowledge, the execution, delivery and
performance of the Merger Agreement and



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<PAGE>   89

the transactions contemplated in connection therewith did not cause or result in
any decrease in the number or dollar volume of government contracts or
subsidies, otherwise adversely affect Arca's business relationship with, and
prospects for continued business with, any governmental entity, or adversely
affect any status, qualification or other standard which Arca then enjoyed.

         4.36 LOANS. As of the date of the Arca Acquisition, Arca's existing
bank, shareholder loans or any other loans identified on Schedule 4.38 to the
Merger Agreement (the "Loans") did not exceed $610,000 (the "LOAN AMOUNT").

         4.37 WARRANTIES. Arca has not had any warranty claims for its products
or services since January 1, 1998.













































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                                   SCHEDULE A

Agreement between CyberGuard, Arca and certain Employee Shareholders of Arca

Asset Purchase Agreement between Exodus and CyberGuard and certain of their
wholly-owned subsidiaries

Escrow Agreements referenced in the Claims and Stock Purchase Agreement and the
Asset Purchase Agreement

Non-Competition Agreements between Exodus and each of Wilson, Weidner and Bauer

Employment Agreements between Exodus and each of Wilson, Weidner and Bauer

Option Agreements between Exodus and Certain Former Arca Employees

Proprietary Rights Agreements between Exodus and Certain Former Arca Employees

Exodus' Executive Employment Policy




































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