Exhibit 10.4

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release (“Agreement”) is made by and between
Kenneth W. Horner (“Employee”) and BakBone Software Incorporated (the “Company”)
(collectively referred to as the “Parties” or individually referred to as a
“Party”).

RECITALS

WHEREAS, Employee was employed by the Company as Senior Vice President Corporate
Development and Strategy;

WHEREAS, Employee signed a Confidential Information, and Invention Assignment
Agreement with the Company on September 15, 2005 (the “Confidentiality
Agreement”);

WHEREAS, the Company and Employee entered into an employment agreement dated
September 1, 2005 (the “Employment Agreement”); and amended terms of offer of
employment dated June 19, 2009.

WHEREAS, the Company and Employee have entered into Stock Option Agreements,
dated March 2, 2010 (the “Stock Options”), granting Employee the option to
purchase shares of the Company’s common stock subject to the terms and
conditions of the Company’s 2003 Equity Incentive Plan and the Stock Option
Agreements (collectively the “Stock Agreements”);

WHEREAS, Employee’s employment with the Company terminated effective May 21,
2010 (the “Termination Date”) and the Parties agree that such termination
constitutes a “separation from service” within the meaning of Section 409A of
the Internal Revenue Code of 1986, as amended, and applicable guidance issued
thereunder (“Section 409A”); and

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

NOW, THEREFORE, in consideration of the mutual promises made herein, the Company
and Employee hereby agree as follows:

COVENANTS

1. Consideration.

a. Payment. In accordance with the amended terms of offer of employment dated
June 19, 2009 , and upon execution of this Agreement and the expiration of any
rescission periods, the Company agrees to pay Employee a total of One Hundred
Seventeen Thousand Five Hundred Dollars ($117,500), in a one-time lump sum
payment, less applicable withholdings, but subject to Section 19 below.

 

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2. Resignation from All Positions. The Employee confirms that he has resigned,
effective May 21, 2010, from all positions, if any, that he held with the
Company or any of its subsidiaries, and without further compensation, Employee
agrees to sign any documents reasonably requested by the Company to accomplish
such purpose.

3. Options. The Parties agree that, , Employee will have vested unexercised
options to purchase 84,375 shares of common stock with an exercise price of
USD$0.35 per share and no more. Any Stock Options that remained unvested as of
the Termination Date will be permanently forfeited as of such date, and Employee
agrees and acknowledges that Employee will have no further rights or interests
in the shares underlying the unvested, forfeited Stock Options. The exercise of
Employee’s vested options shall continue to be governed by the terms and
conditions of the Stock Agreements, including without limitation the ninety
(90) day post-termination exercise period which expires on August 21, 2010.

4. Benefits. Employee’s health insurance benefits shall cease on the last day of
May 2010, subject to Employee’s right to continue his health insurance under
COBRA. Employee’s participation in all benefits and incidents of employment,
including, but not limited to, vesting in stock options, and the accrual of
bonuses, vacation, and paid time off, ceased as of the Termination Date.

5. Payment of Salary and Receipt of All Benefits. Employee acknowledges and
represents that, other than the consideration set forth in this Agreement, the
Company has paid or provided all salary, wages, bonuses, accrued vacation/paid
time off, premiums, leaves, housing allowances, relocation costs, interest,
severance, outplacement costs, fees, reimbursable expenses, commissions, stock,
stock options, vesting, and any and all other benefits and compensation due to
Employee.

6. 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 current and former officers, directors, employees, agents,
investors, attorneys, shareholders, administrators, affiliates, benefit plans,
plan administrators, insurers, trustees, divisions, and subsidiaries, and
predecessor and successor corporations and assigns (collectively, the
“Releasees”). Employee, upon payment of the foregoing consideration, on his own
behalf and on behalf of his respective heirs, family members, executors, agents,
and assigns, hereby and forever releases the Releasees from, and agrees not to
sue concerning, or in any manner to institute, prosecute, or pursue, any claim,
complaint, charge, duty, obligation, demand, or cause of action relating to any
matters of any kind, whether presently known or unknown, suspected or
unsuspected, that Employee may possess against any of the Releasees arising from
any omissions, acts, facts, or damages 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;

 

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c. any and all claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; harassment; retaliation; breach of
contract, both express and implied; breach of covenant of good faith and fair
dealing, both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; fraud; 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; conversion; and disability benefits;

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 Rehabilitation Act of 1973; the Americans with
Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act,
except as prohibited by law; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection
Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment
and Retraining Notification Act; the Family and Medical Leave Act, except as
prohibited by law; the Sarbanes-Oxley Act of 2002; the California Family Rights
Act; the California Labor Code, except as prohibited by law; the California
Workers’ Compensation Act, except as prohibited by law; and the California Fair
Employment and Housing Act;

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 nonwithholding 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.

Employee agrees that the release set forth in this section shall 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 incurred under this
Agreement. This release does not release claims that cannot be released as a
matter of law, including, but not limited to: (1) Employee’s right to file a
charge with or participate in a charge by the Equal Employment Opportunity
Commission, or any other local, state, or federal administrative body or
government agency that is authorized to enforce or administer laws related to
employment, against the Company (with the understanding that any such filing or
participation does not give Employee the right to recover any monetary damages
against the Company; Employee’s release of claims herein bars Employee from
recovering such monetary relief from the Company); (2) rights for
indemnification under the federal and state laws including, but not limited to
claims arising under Division 3, Article 2 of the California Labor Code (which
includes California Labor Code section 2802 regarding indemnity for necessary
expenditures or losses by employee) or under any contract or agreement

 

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with the Company that provides for indemnification or under the Company’s
by-laws or under any insurance policies of the Company; and (3) claims
prohibited from release as set forth in California Labor Code section 206.5
(specifically “any claim or right on account of wages due, or to become due, or
made as an advance on wages to be earned, unless payment of such wages has been
made”). Employee represents that he/she has made no assignment or transfer of
any right, claim, complaint, charge, duty, obligation, demand, cause of action,
or other matter waived or released by this Section.

7. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he
is waiving and releasing any rights he may have under the Age Discrimination in
Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing and
voluntary. Employee agrees that this waiver and release does not apply to any
rights or claims that may arise under the ADEA after the Effective Date of this
Agreement. Employee acknowledges that the consideration given for this waiver
and release is in addition to anything of value to which Employee was already
entitled. Employee further acknowledges that he has been advised by this writing
that: (a) he should consult with an attorney prior to executing this Agreement;
(b) he has forty-five (45) days within which to consider this Agreement; (c) he
has seven (7) days following his execution of this Agreement to revoke this
Agreement; (d) this Agreement shall not be effective until after the revocation
period has expired; and (e) nothing in this Agreement prevents or precludes
Employee from challenging or seeking a determination in good faith of the
validity of this waiver under the ADEA, nor does it impose any condition
precedent, penalties, or costs for doing so, unless specifically authorized by
federal law. In the event Employee signs this Agreement and returns it to the
Company in less than the 21-day period identified above, Employee hereby
acknowledges that he has freely and voluntarily chosen to waive the time period
allotted for considering this Agreement. Employee acknowledges and understands
that revocation must be accomplished by a written notification to the Company’s
principal address, directed to the attention of the Company’s General Counsel,
that is received prior to the Effective Date.

8. California Civil Code Section 1542. Employee acknowledges that he has been
advised to consult with legal counsel and is familiar with the provisions of
California Civil Code Section 1542, a statute that otherwise prohibits the
release of unknown claims, which provides as follows:

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

Employee, being aware of said code section, agrees to expressly waive any rights
he may have thereunder, as well as under any other statute or common law
principles of similar effect.

9. No Pending or Future Lawsuits. Employee represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or
entity, against the Company or any of the other Releasees. Employee also
represents that he does not intend to bring any claims on his own behalf or on
behalf of any other person or entity against the Company or any of the other
Releasees. Employee represents that, in the course of performing his duties to
the Company during his employment, he has at all times complied in all material
respects with all Company policies and applicable laws.

 

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10. Application for Employment. Employee understands and agrees that, as a
condition of this Agreement, Employee shall not be entitled to any employment
with the Company, and Employee hereby waives any right, or alleged right, of
employment or re-employment with the Company. Employee further agrees not to
apply for employment with the Company.

11. Trade Secrets and Confidential Information/Company Property. Employee
reaffirms and agrees to observe and abide by the terms of the Confidentiality
Agreement, specifically including the provisions therein regarding nondisclosure
of the Company’s trade secrets and confidential and proprietary information.
Employee’s signature below constitutes his certification under penalty of
perjury that he has returned all documents and other items provided to Employee
by the Company, developed or obtained by Employee in connection with his
employment with the Company, or otherwise belonging to the Company.

12. No Cooperation. Employee agrees that he will not knowingly encourage,
counsel, or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against any of the Releasees, unless under a
subpoena or other court order to do so or as related directly to the ADEA waiver
in this Agreement. Employee agrees both to immediately notify the Company upon
receipt of any such subpoena or court order, and to furnish, within three
(3) business days of its receipt, a copy of such subpoena or other court order.
If approached by anyone for counsel or assistance in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints against any of the Releasees, Employee shall state no more than that
he cannot provide counsel or assistance.

13. Nondisparagement. Employee agrees to refrain from any disparagement,
criticism, defamation, or slander of any of the Releasees, and agrees to refrain
from any tortuous interference with the contracts and relationships of the
Releasees. The foregoing restrictions will not apply to any statements that are
made truthfully in response to a subpoena or other compulsory legal process. In
the event Employee breaches this Section, all continuing payments and benefits
to which Employee otherwise may be entitled pursuant to this Agreement will
cease immediately. Employee shall direct any inquiries by potential future
employers to the Company’s human resources department, which shall use its
commercially reasonable efforts to provide only the Employee’s last position and
dates of employment.

14. Breach. In addition to the rights provided in the “Attorneys’ Fees” section
below, Employee acknowledges and agrees that any material breach of this
Agreement, unless such breach constitutes a legal action by Employee challenging
or seeking a determination in good faith of the validity of the waiver herein
under the ADEA, or of any provision of the Confidentiality Agreement shall
entitle the Company immediately to recover and/or cease providing the
consideration provided to Employee under this Agreement and to obtain damages,
except as provided by law.

 

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15. No Admission of Liability. Employee understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all actual or
potential disputed claims by Employee. No action taken by the Company hereto,
either previously or in connection with this Agreement, shall be deemed or
construed to be (a) an admission of the truth or falsity of any actual or
potential claims or (b) an acknowledgment or admission by the Company of any
fault or liability whatsoever to Employee or to any third party.

16. Future Assistance. Throughout the Payment Period, Employee agrees to
(i) respond to reasonable requests from the Company and its counsel for
information needed to prepare such operational, financial and other reports,
filings and documents that relate to the time period during which Employee was
employed with the Company (ii) otherwise cooperate as reasonably requested by
the Company in connection with customers or Company business. For purposes of
clarity, any assistance provided by the Employee pursuant to the preceding
sentence will be on a voluntary basis for no consideration and in no way shall
be construed as providing assistance as an employee, consultant, independent
contractor or other advisor or service provider to the Company.

17. Costs. The Parties shall each bear their own costs, attorneys’ fees, and
other fees incurred in connection with the preparation of this Agreement.

18. ARBITRATION. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE
TERMS OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN
RELEASED, SHALL BE SUBJECT EXCLUSIVELY TO CONFIDENTIAL BINDING ARBITRATION IN
SAN DIEGO COUNTY, BEFORE JUDICIAL ARBITRATION & MEDIATION SERVICES (“JAMS”),
PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS RULES”) IN
EFFECT AT THE TIME OF THE COMMENCEMENT OF THE ARBITRATION. THE ARBITRATOR MAY
GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE ARBITRATOR SHALL
ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH CALIFORNIA LAW,
INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY
SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT
REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION. TO THE EXTENT
THAT THE JAMS RULES CONFLICT WITH CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE
PRECEDENCE. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND
BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING
PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF
COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION AWARD. THE PARTIES TO THE
ARBITRATION SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH
ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES
AND EXPENSES. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE
BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. NOTWITHSTANDING THE
FOREGOING, THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE
RELIEF (OR ANY OTHER PROVISIONAL REMEDY) FROM ANY COURT HAVING JURISDICTION OVER
THE PARTIES AND THE

 

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SUBJECT MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS
INCORPORATED HEREIN BY REFERENCE. SHOULD ANY PART OF THE ARBITRATION AGREEMENT
CONTAINED IN THIS PARAGRAPH CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT
BETWEEN THE PARTIES, THE PARTIES AGREE THAT THIS ARBITRATION AGREEMENT SHALL
GOVERN. NOTWITHSTANDING THE FOREGOING, THE COMPANY SHALL HAVE THE RIGHT TO MAKE
SUCH DISCLOSURES AND FILINGS AS REQUIRED BY APPLICABLE SECURITIES LAWS.

19. Section 409A. The Parties agree that the severance payments payable pursuant
to Section 1 of this Agreement are exempt from Section 409A pursuant to Treasury
Regulation Section 1.409A-1(b)(i)(iii) and (v). This provision is intended to
comply with the requirements of Section 409A so that none of the severance
payments and benefits to be provided hereunder will be subject to the additional
tax imposed under Section 409A, and any ambiguities herein will be interpreted
to so comply. The Company and Employee agree to work together in good faith to
consider amendments to this Agreement and to take such reasonable actions which
are necessary, appropriate or desirable to avoid imposition of any additional
tax or income recognition prior to actual payment to Employee under
Section 409A.

20. Tax Consequences. The Company makes no representations or warranties with
respect to the tax consequences of the payments and any other consideration
provided to Employee or made on his behalf under the terms of this Agreement.
Employee agrees and understands that he is responsible for payment, if any, of
local, state, and/or federal taxes on the payments and any other consideration
provided hereunder by the Company and any penalties or assessments thereon.
Employee further agrees to indemnify and hold the Company harmless from any
claims, demands, deficiencies, penalties, interest, assessments, executions,
judgments, or recoveries by any government agency against the Company for any
amounts claimed due on account of (a) Employee’s failure to pay or delayed
payment of federal or state taxes, or (b) damages sustained by the Company by
reason of any such claims, including attorneys’ fees and costs.

21. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who
may claim through it to the terms and conditions of this Agreement. Employee
represents and warrants that he has the capacity to act on his own behalf and on
behalf of all who might claim through him to bind them to the terms and
conditions of this Agreement. Each Party warrants and represents that there are
no liens or claims of lien or assignments in law or equity or otherwise of or
against any of the claims or causes of action released herein.

22. No Company Representations. Employee represents that he has had an
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Employee has not
relied upon any representations or statements made by the Company that are not
specifically set forth in this Agreement.

 

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23. Severability. In the event that any provision or any portion of any
provision hereof or any surviving agreement made a part hereof becomes or is
declared by a court of competent jurisdiction or arbitrator to be illegal,
unenforceable, or void, this Agreement shall continue in full force and effect
without said provision or portion of provision.

24. Attorneys’ Fees. Except with regard to a legal action challenging or seeking
a determination in good faith of the validity of the waiver herein under the
ADEA, in the event that either Party brings an action to enforce or effect its
rights under this Agreement, each Party shall bear its own costs and expenses,
including the costs of mediation, arbitration, litigation, court fees, and
attorneys’ fees incurred in connection with such an action.

25. Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Employee concerning the subject matter of
this Agreement and Employee’s employment with and separation from the Company
and the events leading thereto and associated therewith, and supersedes and
replaces any and all prior agreements and understandings concerning the subject
matter of this Agreement and Employee’s relationship with the Company, with the
exception of the Confidentiality Agreement and the Stock Agreements. The
language of this agreement shall be construed as to its fair meaning and not
strictly for or against either party.

26. No Oral Modification. This Agreement may only be amended in a writing signed
by Employee and a duly authorized officer or agent of the Company.

27. Governing Law. This Agreement shall be governed by the laws of the State of
California, without regard for choice-of-law provisions. Employee consents to
personal and exclusive jurisdiction and venue in the State of California.

28. Effective Date. Employee understands that this Agreement shall be null and
void if not executed by him within twenty-one (21) days. Each Party has seven
(7) days after that Party signs this Agreement to revoke it. This Agreement will
become effective on the eighth (8th) day after Employee signed this Agreement,
so long as it has been signed by the Parties and has not been revoked by either
Party before that date (the “Effective Date”).

29. Counterparts. This Agreement may be executed in counterparts and by
facsimile, and each counterpart and facsimile shall have the same force and
effect as an original and shall constitute an effective, binding agreement on
the part of each of the undersigned.

30. Voluntary Execution of Agreement. Employee understands and agrees that he
executed this Agreement voluntarily, without any duress or undue influence on
the part or behalf of the Company or any third party, with the full intent of
releasing all of his claims against the Company and any of the other Releasees.
Employee acknowledges that:

a. he has read this Agreement;

b. he has been represented in the preparation, negotiation, and execution of
this Agreement by legal counsel of his own choice;

c. he understands the terms and consequences of this Agreement and of the
releases it contains; and

d. he is fully aware of the legal and binding effect of this Agreement.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

 

      KENNETH W. HORNER an individual Dated as of:  

May 19, 2010

   

/s/ Ken Horner

      Kenneth W. Horner       BAKBONE SOFTWARE INCORPORATED Dated as of:   May
20, 2010     By:  

/s/ Steve Martin

      Name:  

 

      Title:  

 

 

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