SEVERANCE AGREEMENT AND RELEASE

This Severance Agreement and Release (“ Agreement ”) is made by and between Christopher G. Kenber (“ Employee ”) and Hi/fn, Inc. (“ Company ”) (collectively referred to as the “ Parties ”):

WHEREAS, Employee was employed by the Company;

WHEREAS, the Company and Employee entered into the Severance and Change of Control Agreement, effective May 16, 2005 (the “ Severance Agreement ”);

WHEREAS, the Company and Employee entered into a Proprietary Information and Inventions Agreement (the “ Confidentiality Agreement ”);

WHEREAS, Employee’s employment with Company and status as a member of the Board of Directors terminated on November 10, 2006 (the “ Termination Date ”);

WHEREAS, the Parties, and each of them, wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions and demands that the Employee may have against the Company as defined herein, including, but not limited to, any and all claims arising or in any way related to Employee’s employment with, or separation from, the Company;

NOW THEREFORE, in consideration of the promises made herein, the Parties hereby agree as follows:

1.   Resignation . Employee hereby acknowledges and reaffirms his resignation as the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors effective as of the Termination Date and from all other officer, employee and director positions with the Company and its affiliates.

2.   Consideration .

(a)   Severance Pay . Subject to this Agreement becoming effective (as set forth in Section 24), the Company will pay Employee $185,000 on its first regularly scheduled payroll date following the date six (6) months and one day following the Termination Date and will pay Employee $15,416.66 on each regularly scheduled payroll date thereafter through the last payroll date on or before the date twelve (12) months following the Termination Date, in accordance with the Company’s normal payroll policies.

(b)   Benefits . Subject to this Agreement becoming effective (as set forth in Section 24), the Company will promptly reimburse Employee for the same level of medical, dental and/or vision coverage and benefits as in effect for Employee and his spouse on the day immediately preceding the Termination Date, provided (i) Employee constitutes a qualified beneficiary, as

defined in Section 4980(B)(g)(1) of the Internal Revenue Code of 1986, as amended; and (ii) Employee elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“ COBRA ”), within the time period prescribed pursuant to COBRA. The Company will continue to reimburse Employee for continuation coverage (at a level of coverage no less favorable than that provided as of the day immediately preceding the Termination Date) until the earlier of (A) the date Employee (or his spouse, as applicable) is no longer eligible to receive continuation coverage pursuant to COBRA, (B) the date upon which Employee and his eligible dependents become covered by similar plans, or (C) twelve (12) months from the Termination Date. Employee will be responsible for the payment of COBRA premiums (including, without limitation, all administrative expenses) for the remaining COBRA period.

(c)   Consulting . Commencing on the Termination Date and subject to this Agreement becoming effective (as set forth in Section 24), Employee will make himself available to serve as a consultant to the Company through the date twelve (12) months following the Termination Date, pursuant to the written consulting agreement (the “ Consulting Agreement ”) attached hereto as Exhibit A .

3.   Confidential Information . Employee will continue to maintain the confidentiality of all confidential and proprietary information of the Company and will continue to comply with the terms and conditions of the Confidentiality Agreement between Employee and the Company. Employee will return all of the Company’s property and confidential and proprietary information in his possession to the Company on the Effective Date of this Agreement.

4.   Payment of Salary . Employee acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to Employee once the above noted payments and benefits are received.

5.   Release of Claims . Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company and its officers, managers, supervisors, agents and employees. Employee, on his own behalf, and on behalf of his respective heirs, family members, executors, agents, and assigns, hereby fully and forever releases the Company and its officers, directors, employees, agents, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns (the “ Releasees ”), from, and agrees not to sue concerning, any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date of this Agreement including, without limitation:

(a)   any and all claims relating to or arising from Employee’s employment relationship with the Company and the termination of that relationship;

(b)   any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

(c)   any and all claims under the law of any jurisdiction including, but not limited to, wrongful discharge of employment; constructive discharge from employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; and conversion;

(d)   any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, Older Workers Benefit Protection Act, the Family and Medical Leave Act, the California Family Rights Act, the California Fair Employment and Housing Act, and the California Labor Code, including, but not limited to California Labor Code Sections 1400-1408;

(e)   any and all claims for violation of the federal, or any state, constitution;

(f)   any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

(g)   any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Agreement; and

(h)   any and all claims for attorneys’ fees and costs.

The Company and Employee agree that the release set forth in this section will be and remain in effect in all respects as a complete general release as to the matters released. This release does not extend to any obligations