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                                                                    EXHIBIT 10.1


                                HI/FN, INC.

                    2001 NONSTATUTORY STOCK OPTION PLAN

        1. Purposes of the Plan. The purposes of this Nonstatutory Stock Option
Plan are:

               -  to attract and retain the best available personnel for
                  positions of substantial responsibility,

               -  to provide additional incentive to Employees and
                  Consultants, and

               -  to promote the success of the Company's business.

               Options granted under the Plan will be Nonstatutory Stock
        Options.

        2. Definitions. As used herein, the following definitions shall apply:

               (a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

               (b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.

               (c) "Board" means the Board of Directors of the Company.

               (d) "Code" means the Internal Revenue Code of 1986, as amended.

               (e) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.

               (f) "Common Stock" means the Common Stock of the Company.

               (g) "Company" means hi/fn, Inc. a Delaware corporation.

               (h) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services to such entity.

               (i) "Director" means a member of the Board.

               (j) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.

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               (k) "Employee" means any person, excluding Officers, employed by
the Company or any Parent or Subsidiary of the Company. A Service Provider shall
not cease to be an Employee in the case of (i) any leave of absence approved by
the Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

               (l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

               (m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

                      (i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

                      (ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;

                      (iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

               (n) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.

               (o) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

               (p) "Option" means a nonstatutory stock option granted pursuant
to the Plan, that is not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations promulgated
thereunder.

               (q) "Option Agreement" means an agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.

               (r) "Option Exchange Program" means a program whereby outstanding
options are surrendered in exchange for options with a lower exercise price.


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               (s) "Optioned Stock" means the Common Stock subject to an Option.

               (t) "Optionee" means the holder of an outstanding Option granted
under the Plan.

               (u) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

               (v) "Plan" means this 2001 Nonstatutory Stock Option Plan.

               (w) "Service Provider" means an Employee including an Officer,
Consultant or Director.

               (x) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

               (y) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.

        3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is one million five hundred thousand (1,500,000) Shares. The
Shares may be authorized, but unissued, or reacquired Common Stock.

        If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).

        4. Administration of the Plan.

               (a) Administration. The Plan shall be administered by (i) the
Board or (ii) a Committee, which committee shall be constituted to satisfy
Applicable Laws.

               (b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

                      (i) to determine the Fair Market Value of the Common
Stock;

                      (ii) to select the Service Providers to whom Options may
be granted hereunder;

                      (iii) to determine whether and to what extent Options
are granted hereunder;

                      (iv) to determine the number of shares of Common
Stock to be covered by each Option granted hereunder;


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                      (v) to approve forms of agreement for use under the Plan;

                      (vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

                      (vii) to reduce the exercise price of any Option to
the then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted;

                      (viii) to institute an Option Exchange Program;

                      (ix) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;

                      (x) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

                      (xi) to modify or amend each Option (subject to Section
14(b) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;

                      (xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option previously
granted by the Administrator;

                      (xiii) to determine the terms and restrictions applicable
to Options;

                      (xiv) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable; and

                      (xv) to make all other determinations deemed necessary or
advisable for administering the Plan.

               (c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.


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        5. Eligibility. Options may be granted to Service Providers; provided,
however, that notwithstanding anything to the contrary contained in the Plan,
Options may not be granted to Officers and Directors.

        6. Limitation. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.

        7. Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect for ten (10) years, unless sooner
terminated under Section 14 of the Plan.

        8. Term of Option. The term of each Option shall be stated in the Option
Agreement.

        9. Option Exercise Price and Consideration.

               (a) Exercise Price. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator.

               (b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.

               (c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:

                      (i) cash;

                      (ii) check;

                      (iii) promissory note;

                      (iv) other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;

                      (v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

                      (vi) a reduction in the amount of any Company liability to
the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;


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                      (vii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws; or

                      (viii) any combination of the foregoing methods of
payment.

        10. Exercise of Option.

               (a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. An Option may not be exercised for a fraction of
a Share.

                      An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.

                      Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

               (b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option, but only within such
period of time as is specified in the Option Agreement, and only to the extent
that the Option is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

               (c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option
Agreement, to the extent the Option is vested on the date of


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termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). In the absence of a specified time
in the Option Agreement, the Option shall remain exercisable for twelve (12)
months following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan. If, after termination,
the Optionee does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

               (d) Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant), by the Optionee's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

               (e) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

        11. Non-Transferability of Options. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.

        12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

               (a) Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made


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<PAGE>   8
by the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.

               (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.

               (c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option shall be assumed or an equivalent option
or right substituted by the successor corporation or a Parent or Subsidiary of
the successor corporation. In the event that the successor corporation refuses
to assume or substitute for the Option, the Optionee shall fully vest in and
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option or right confers the right to purchase or
receive, for each Share of Optioned Stock, immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.

        13. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

        14. Amendment and Termination of the Plan.


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               (a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.

               (b) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to options granted under the
Plan prior to the date of such termination.

        15. Conditions Upon Issuance of Shares.

               (a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

               (b) Investment Representations. As a condition to the exercise of
an Option the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.

        16. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

        17. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.


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                                   HI/FN, INC.

                       2001 NONSTATUTORY STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

        Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.

I.      NOTICE OF STOCK OPTION GRANT

        [OPTIONEE'S NAME AND ADDRESS]

        You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:

<TABLE>
<S>                                                    <C>
        Grant Number                                   _________________________

        Date of Grant                                  _________________________

        Vesting Commencement Date                      _________________________

        Exercise Price per Share                       $________________________

        Total Number of Shares Granted                 _________________________

        Total Exercise Price                           $________________________

        Type of Option:                                Nonstatutory Stock Option

        Term/Expiration Date:                          _________________________

        Vesting Schedule:
</TABLE>

        Subject to the Optionee continuing to be a Service Provider on such
dates, this Option shall vest and become exercisable in accordance with the
following schedule:

        [25% OF THE SHARES SUBJECT TO THE OPTION SHALL VEST TWELVE MONTHS AFTER
THE VESTING COMMENCEMENT DATE, AND 1/48TH OF THE SHARES SUBJECT TO THE OPTION
SHALL VEST UPON THE LAST DAY OF EACH MONTH THEREAFTER.]

        Termination Period:

        This Option may be exercised for _____ [DAYS/MONTHS] after Optionee
ceases to be a Service Provider. Upon the death or Disability of the Optionee,
this Option may be exercised for such longer

<PAGE>   11
period as provided in the Plan. In no event shall this Option be exercised later
than the Term/Expiration Date as provided above.

II.     AGREEMENT

        1. Grant of Option. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 14(b) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

        2. Exercise of Option.

                  (a) Right to Exercise. This Option is exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
the applicable provisions of the Plan and this Option Agreement.

                  (b) Method of Exercise. This Option is exercisable by delivery
of an exercise notice, in the form attached as Exhibit A (the "Exercise
Notice"), which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the "Exercised
Shares"), and such other representations and agreements as may be required by
the Company pursuant to the provisions of the Plan. The Exercise Notice shall be
completed by the Optionee and delivered to [TITLE]. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by such aggregate Exercise
Price.

               No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

        3. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:

                  (a) cash;

                  (b) check;

                  (c) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; or

                  (d) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of


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<PAGE>   12
surrender, AND (ii) have a Fair Market Value on the date of surrender equal to
the aggregate Exercise Price of the Exercised Shares.

        4. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

        5. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

        6. Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

                  (a) Exercising the Option. The Optionee may incur regular
federal income tax liability upon exercise of an NSO. The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price. If the
Optionee is an Employee or a former Employee, the Company will be required to
withhold from his or her compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

                  (b) Disposition of Shares. If the Optionee holds NSO Shares
for at least one year, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes.

        7. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of [STATE].

        8. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS


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<PAGE>   13
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

        By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.

OPTIONEE                                HI/FN, INC.

-------------------------------         ----------------------------------------
Signature                               By

-------------------------------         ----------------------------------------
Print Name                              Title

-------------------------------
Residence Address

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


                                      -4-
<PAGE>   14
                                    EXHIBIT A

                                   HI/FN, INC.

                       2001 NONSTATUTORY STOCK OPTION PLAN

                                 EXERCISE NOTICE

HI/FN, INC.
[ADDRESS]

Attention:  [TITLE]

        1. Exercise of Option. Effective as of today, ________________, _____,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of hi/fn, Inc. (the "Company") under and
pursuant to the 2001 Nonstatutory Stock Option Plan (the "Plan") and the Stock
Option Agreement dated, _________, ___ (the "Option Agreement"). The purchase
price for the Shares shall be $, as required by the Option Agreement.

        2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares.

        3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.

        4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 12 of the
Plan.

        5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.


<PAGE>   15
        6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.

Submitted by:                           Accepted by:

PURCHASER                               HI/FN, INC.

-------------------------------         ----------------------------------------
Signature                               By

-------------------------------         ----------------------------------------
Print Name                              Title

-------------------------------         ----------------------------------------
                                        Date Received

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

Address:                                Address:
         ----------------------                     ----------------------------

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

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

                                      -2-
<PAGE>   16
                                    SUBLEASE

This Sublease (Sublease) is made this 6th day of April, 2001, by and
between HI/FN, Inc., a Delaware corporation ("Sublessor") and Driving
Media, Inc. a Delaware corporation ("Sublessee").

                                    RECITALS

A.      Sublessor, as Lessee, is leasing from Sally Spencer (Lessor) the land,
        building and improvements located at 727 University Avenue, Los Gatos,
        California (the "Premises") pursuant to an Office Lease dated October,
        2000 (Master Lease). Sublessee acknowledges having received and reviewed
        a copy of the Master Lease.

B.      The Premises, more particularly described in Exhibit "A" hereto, consist
        of approximately eleven thousand four hundred and seventy-two (11,472)
        rentable square feet. Sublessor desires to sublease the Premises to
        Sublessee, and Sublessee desires to hire and sublease the Premises from
        Sublessor, on the terms and conditions set forth in this Sublease.

NOW, THEREFORE, the parties hereto agree as follows:

1.      PREMISES.

        Sublessor hereby subleases the Premises and appurtenances thereto to
        Sublessee, and Sublessee hereby hires and subleases the same from
        Sublessor.

2.      INCORPORATION OF MASTER LEASE.

        This Sublease is subject to all of the terms and conditions of the
        Master Lease and Sublessee hereby accepts, assumes and agrees to perform
        during the term of this Sublease all of the obligations of Sublessor as
        Lessee under the Master Lease to the extent applicable to the Premises
        and all of the terms and conditions of this Sublease. The terms and
        conditions of the Master Lease are incorporated in this Sublease, except
        that (i) unless stated to the contrary below, each reference in the
        incorporated paragraphs to "Lease" shall be deemed a reference to this
        "Sublease", each reference to the "Lessor" shall be deemed a reference
        to the "Sublessor", each reference to the "Lessee" shall be deemed a
        reference to the "Sublessee", each reference to the "Premises" shall be
        deemed a reference to the "Premises", each reference to the "Term" shall
        be deemed a reference to the "Sublease Term", each reference to the
        "Rent" shall be deemed a reference to the "Rent" as described in Section
        6 of this Sublease, and (ii) the following terms and conditions of the
        Master Lease shall be excluded or modified, as appropriate: paragraphs A
        and B of the Recitals, Section 4(a), the first sentence of Section 32,
        and Exhibit B of the Master Lease are not incorporated herein.


                                      -1-
<PAGE>   17
        Sublessee shall not commit or permit to be committed on the Premises any
        act or omission which shall violate any term or condition of the Master
        Lease incorporated herein or modified hereby. In the event of the
        termination for any reason of Sublessor's interest as Lessee under the
        Master Lease, then this Sublease shall terminate therewith without any
        liability of Sublessor to Sublessee; except that if this Sublease
        terminates as a result of a default of one of the parties hereto,
        whether under this Sublease, the Master Lease, or both, the defaulting
        party shall be liable to the non-defaulting party for all damages
        suffered by the non-defaulting party resulting from such termination.

3.      SUBLESSOR'S OBLIGATIONS.

        Sublessor agrees that Sublessee shall be entitled to receive all
        services and repairs to be provided by Lessor to Sublessor as Lessee
        under the Master Lease with respect to the Premises. Sublessor covenants
        and agrees that it will continue to pay rent to Lessor as provided in
        the Master Lease and perform all other obligations of Lessee pursuant to
        the Master Lease (and will act as a conduit to transmit any instructions
        or requests by Sublessee to Lessor) to the extent that failure to
        perform the same would adversely affect Sublessee's use or occupancy of
        the Premises. Sublessee covenants and agrees that in the event Sublessor
        is in default under the Master Lease and fails to cure such default
        within the time limits provided therein (unless Sublessor is effecting a
        cure and diligently prosecutes it to completion), the Lessor under the
        Master Lease shall have the right to immediately terminate this
        Sublease.

4.      TERM.

        The term of this Sublease (the "Sublease Term") shall be a period of
        thirty-six (36) months commencing on the later of April 16, 2001 or the
        first business day after the date Lessor gives its written consent to
        this Sublease (the "Commencement Date"), and ending on April 14, 2004.
        In the event Sublessor is unable to deliver possession of the Premises
        to Sublessee on April 16, 2001, Sublessor shall not be liable for any
        damage incurred by Sublessee after April 16, 2001, nor shall the
        Sublease Term be extended beyond April 14, 2004, nor shall this Sublease
        be void or voidable except as provided in Paragraph 11 hereof; provided,
        however, that Sublessee shall not be liable for rent until the
        Commencement Date.

5.      USE.

        Sublessee shall use the Premises for general office and related purposes
        and other legal uses consistent with the uses permitted under Section 6
        of the Master Lease. Sublessee warrants and represents that its use of
        the Premises for research and development, engineering, marketing, and
        sales purposes is and at all times will be within the scope of general
        office and related purposes.


                                      -2-
<PAGE>   18
6.      RENT.

        (a)    Sublessee shall pay rent in monthly installments to Sublessor for
               the Premises, in advance on the first day of each calendar month
               during the Sublease Term, without deduction, offset, prior
               written notice or demand, in lawful money of the United States,
               as follows:

<TABLE>
<S>                                                                  <C>
               For the period Apr. 16, 2001 to February 15, 2002:    $57,360.00 per month
               For the period February 16, 2002 to April 15, 2002:   FREE RENT per month
               For the period Apr. 16, 2002 to February 15, 2003:    $59,080.80 per month
               For the period February 16, 2003 to April 15, 2003:   FREE RENT per month
               For the period Apr. 16, 2003 to April 15, 2004:       $60,853.22 per month
</TABLE>

        (b)    At Sublease execution, Sublessee shall pay Sublessor in the form
               of a check the sum of Fifty Seven Thousand Three Hundred Sixty
               and n /100ths Dollars ($57,360.00) as rent for the first month of
               the Sublease Term. Said check to be held uncashed by Sublessor
               until Sublease has been fully executed and the consent to
               sublease has been granted by Lessor.

        (c)    At Sublease execution, Sublessee shall deposit with Sublessor in
               the form of a check the sum of Sixty Thousand Eight Hundred Fifty
               Three and 22/100ths Dollars ($60,853.22) as a non-interest
               bearing security deposit for Sublessee's performance under this
               Sublease. Said check to be held uncashed by Sublessor until
               Sublease has been fully executed and the consent to sublease has
               been granted by Lessor. Within thirty (30) days after Sublessee
               has vacated the Premises at the expiration or earlier termination
               of the Sublease Term, the amount paid as security deposit shall
               be returned to Sublessee after first deducting any sums that are
               needed by Sublessor to cure defaults of Sublessee under this
               Sublease or compensate Lessor for damages for which Sublessee is
               liable pursuant to this Sublease.

        (d)    Notwithstanding the provisions of subparagraph (a) above, if any
               payment date (including the Commencement Date) for rent falls on
               a day other than the first day of that calendar month, or if any
               rent payment is for a period shorter than one calendar month, the
               rent for that fractional calendar month shall be prorated based
               on the actual number of days in the month. All other payments or
               adjustments that are required to be made under the terms of this
               Sublease and that require proration on a time basis shall be
               prorated on the same basis.

        (e)    Sublessee's obligations regarding late payment charges are set
               forth in subparagraphs 4(d) and 19(a) or the Master Lease.

7.      ADDITIONAL RENT.

        This is a triple net sublease. Sublessee shall keep the Premises in a
        clean and sanitary condition and shall, at Sublessee's sole cost,
        maintain the Premises and all systems serving the Premises in good
        working condition and repair throughout the Sublease



                                      -3-
<PAGE>   19
        Term. Sublessee is obligated to and shall pay all additional rent
        required to be paid under the terms and conditions of Section 5 of the
        Master Lease.

8.      INSURANCE.

        Sublessee, at Sublessee's expense, agrees to keep in force during the
        term of this Lease a policy of commercial general liability insurance
        with limits in the amount of $1,000,000/$3,000,000 for injuries to or
        death of persons occurring in, on or about the Premises, and property
        damage insurance with limits of $1,000,000. The policy or policies
        affecting such insurance, certificates of which shall be furnished to
        Sublessor, shall name Sublessor as an additional insured, and shall
        insure any liability of Sublessor, contingent or otherwise, as respects
        acts or omissions of Sublessee, its agents, employees or invitees or
        otherwise by any conduct or transactions of any of said persons in or
        about or concerning the Premises, including any failure of Sublessee to
        observe or perform any of its obligations hereunder; shall be issued by
        an insurance company admitted to transact business in the State of
        California; and shall provide that the insurance effected thereby shall
        not be canceled, except upon thirty (30) days' prior written notice to
        Sublessor.

9.      REPAIRS AND ALTERATIONS.

        Sublessee's rights and obligations regarding repairs and alterations are
        set forth in Section 11 of the Master Lease. Sublessor acknowledges and
        agrees, that Sublessee at its sole cost and expense, and with all
        appropriate and necessary permits, will divide two of the larger offices
        into four smaller offices as shown in red on Exhibit B attached.
        Sublessee agrees that on the expiration or earlier termination of this
        Sublease, it will restore the said two larger offices back to their size
        and configuration at the time this Sublease is signed.

10.     ASSIGNMENT AND SUBLETTING.

        (a)    Sublessee's rights and obligations regarding assignment and
               subletting are set forth in Section 16 of the Master lease.

        (b)    Sublessor acknowledges and agrees that Sublessee reserves the
               right to sublease a portion of the Premises to Silicon
               Entertainment, Inc. for part or all of the Sublease Term.
               Sublessee represents that Silicon Entertainment is in Bankruptcy
               (Chapter 11 Reorganization); therefore, Sublessee covenants and
               agrees that when it subleases a portion of the Premises to
               Silicon Entertainment, it ((Sublessee) will continue to pay rent
               directly to Sublessor as provided in this Sublease. For its part,
               Sublessor covenants and agrees that it (Sublessor) will continue
               to pay rent directly to Lessor as provided in the Master Lease.
               In granting consent to this Sublease, Lessor acknowledges and
               agrees that Sublessee has the right to sublease a portion of the
               Premises to Silicon Entertainment, Inc. for part or all of the
               Sublease Term, but only on the conditions stated herein.

        (c)    Sublessor acknowledges and agrees that Sublessee may assign the
               Sublease or sublet the Premises or any part thereof without
               Sublessor's consent, to any subsidiary, affiliate or controlled
               corporation, or to any corporation into which


                                      -4-
<PAGE>   20
               Sublessee may be converted or with which it may merge, provided
               said entity agrees to accept the Sublease in its then current
               condition.

11.     OPTION TO EXTEND.

        (a)    Option. Provided Sublessor does not need the Premises for its own
               use, at the expiration of the Sublease Term hereof, Sublessee may
               extend the term of this Sublease for one (1) additional period of
               twelve (12) months (the "Extended Term") commencing immediately
               following the expiration date of the Sublease Term (the
               "Expiration Date"). Sublessee shall exercise this option if at
               all, by giving Sublessor notice of Sublessee's intention to do so
               at least one hundred eighty (180) days prior to the Expiration
               Date. Such Extended Term shall be upon all the terms and
               conditions hereof, except that the monthly rental and method of
               rental adjustment for the Extended Term shall be determined as
               set forth below.

        (b)    Extended Term Rate. As of the commencement of the Extended Term,
               the monthly Base Rent for the Extended Term shall be subject to
               adjustments as hereinafter provided to one hundred percent (100%)
               of the fair market rental for the Premises, as improved, with a
               method of rental adjustment consistent with rental adjustment
               practices for comparable lease space in the vicinity of the
               Premises. In the event the parties fail to agree upon the amount
               of the monthly Base Rent and the method of rental adjustment for
               the Extended Term ninety (90) days prior to commencement of the
               Extended Term shall be determined by appraisal in the manner
               hereafter set forth. In no event shall the monthly Base Rent for
               the Extended Term be less than the monthly Base Rent payable
               hereunder for the last full month of the Sublease Term
               immediately preceding commencement of the Extended Term.

               In the event it becomes necessary under this subparagraph to
               determine the fair market monthly Base Rent and the method of
               rental adjustment of the Premises by appraisal, Sublessor and
               Sublessee each shall appoint a real estate appraiser who shall be
               a member of the American Institute of Real Estate Appraisers
               ("AIREA"), and have at least five (5) years experience appraising
               commercial property in Santa Clara County, and such appraisers
               shall each determine the fair market monthly Rent for the
               Premises, and the method of rental adjustment taking into account
               the value of the Premises, the amenities provided, prevailing
               comparable rentals and rental adjustment practices in the area.
               Such appraisers shall, within twenty (20) business days after
               their appointment, complete their appraisals and submit their
               appraisal reports to Sublessor and Sublessee. If the fair market
               monthly Base Rent of the Premises established in the two (2)
               appraisals varies by five percent (5%) or less of the higher
               rental value, the average of the two shall be controlling. If
               said fair market monthly Base Rent varies by more then five
               percent (5%) of the higher rental, said appraisers, within ten
               (10) days after submission of the last appraisal, shall appoint a
               third appraiser who shall be a member of the AIREA and who shall
               also be experienced in the appraisal of rental values and
               adjustment practices for commercial properties in the vicinity of
               the Premises. Such third appraiser shall, within twenty (20)


                                      -5-
<PAGE>   21
               business days after his appointment, determine by appraisal the
               fair market monthly Base Rent of the Premises, taking into
               account the same factors referred to above, and submit his
               appraisal report to Sublessor and Sublessee. The fair market
               monthly Base Rent determined by the third appraiser for the
               Premises shall be controlling, unless it is less then that set
               forth in the lower appraisal previously obtained, in which case
               the value set forth in said lower appraisal shall be controlling,
               or unless it is greater than that set forth in the higher
               appraisal previously obtained, in which case the rental set forth
               in said higher appraisal shall be controlling. The method of
               adjusting rental periodically, including the manner and timing of
               such adjustments, shall be as determined by the initial two
               appraisers, if they agree on the single method; otherwise, it
               shall be as determined by the third appraiser. If either
               Sublessor or Sublessee fails to appoint an appraiser, or if an
               appraiser appointed by either of them fails, after his
               appointment, to submit his appraisal within the required period
               in accordance with the foregoing, the appraisal submitted by the
               appraiser properly appointed and timely submitting his appraisal
               shall be controlling. If the two appraisers appointed by the
               Sublessor and Sublessee are unable to agree upon a third
               appraiser with the required period in accordance with the
               foregoing, application shall be made within twenty (20) days
               thereafter by either Sublessor or Sublessee to the AIREA, which
               shall appoint a member of said institute willing to serve as
               appraiser. If the AIREA is unwilling to appoint a third appraiser
               or fails to so do then said appraiser shall be selected by a
               judge of the Superior Court, County of Santa Clara. The cost of
               all appraisals under this subparagraph shall be borne equally by
               Sublessor and Sublessee.

12.     LESSOR'S WRITTEN CONSENT.

        This Sublease is conditioned upon and effective only upon obtaining the
        written consent of Lessor. Sublessor shall use reasonable efforts to
        obtain Lessor's consent as soon as possible. If, however, Lessor's
        consent has not been obtained on or before May 1, 2001, then Sublessee
        shall have the right to terminate this Sublease, in which event
        Sublessor shall promptly refund to Sublessee all amounts theretofore
        paid by Sublessee hereunder.

13.     NOTICES.

        All notices and demands of any kind given by Sublessor or Sublessee
        hereunder shall be in writing and sent by the United States mail,
        postage prepaid, by overnight courier or by personal delivery. All such
        notices and demands shall be addressed to Sublessor or Sublessee, as the
        case may be, at the addresses set forth below their respective
        signatures or at such other addresses as they may designate from time to
        time, and shall be effective upon receipt. Sublessor agrees that it will
        promptly give Sublessee copies of all notices it receives from Lessor
        under the Master Lease.

14.     BROKER.

        Sublessor and Sublessee represent and warrant to each other that, with
        the exception of Mike Filice and Kirsten Felder of CPS, the Commercial
        Property Services Company, and Duffy D'Angelo and Joan Haynes of
        Colliers International, no brokers were involved in


                                      -6-
<PAGE>   22
        connection with the negotiation or consummation of this Sublease. Each
        party agrees to indemnify the other and hold it harmless from and
        against any and all claims, damages, losses, expenses and liabilities
        (including reasonable attorney's fees) incurred by said party as a
        result of a breach of this representation and warranty by the other
        party. Sublessor shall pay all commissions due and owing to CPS and
        Colliers International arising out of and in connection with the
        Sublease.

15.     SUBLESSOR'S COVENANTS.

        Sublessor shall (i) keep the Master Lease in effect; (ii) not modify,
        amend or waive any provisions thereof or make any election, exercise any
        option, right or remedy, or grant any consent or approval thereunder
        without, in each instance, Sublessee's prior written consent; (iii) pay
        the rent due and perform all of Sublessor's other obligations under the
        Master Lease as and when required, except to the extent that Sublessee
        is obligated to perform such other obligations under the Sublease; (iv)
        not take any action or omit to take any action that could cause or
        constitute a breach of the Master Lease or otherwise give rise to a
        right of Lessor to terminate the Master Lease or declare any provision
        thereof to have become ineffective; (v) enforce performance of all
        obligations of Lessor under the Master Lease; and (vi) immediately send
        Sublessee copies of any notices received by Sublessor from Lessor that
        could affect Sublessee's use of the Premises or rights under the
        Sublease, including, without limitation, any notices of default under
        the Master Lease. In enforcing performance of all such obligations of
        Lessor, Sublessor shall, upon Sublessee's written request, immediately
        notify Lessor of its nonperformance under the Master Lease and request
        that Lessor perform its obligations under the Master Lease.

16.     SUBLESSOR'S REPRESENTATIONS AND WARRANTIES.

        (a)    As an inducement to Sublessee to enter into this Sublease,
               Sublessor represents and warrants that (i) the form of the Master
               Lease as Exhibit "C" is true, correct and complete and has not
               been modified in any respect; and (ii) to the best of Sublessor's
               knowledge, both the Master Lease is in full force and effect, and
               there exists no default or event of default under the Master
               Lease by either Lessor or Sublessor, nor has there occurred any
               event which, with the giving of notice or the passage of time or
               both, could constitute such a default or event of default.

        (b)    In addition, Sublessor warrants and represents that, as of the
               Commencement Date, (i) the Premises will comply with all
               applicable laws, rules, regulations, codes, ordinances,
               underwriters' requirements, covenants, conditions, and
               restrictions, (ii) the Premises will be in good and clean
               operating condition and repair, and (iii) the HVAC, plumbing,
               electrical (including panels and outlets), roof, exterior doors
               (both personnel and shipping), fire sprinklers, lighting, ceiling
               tiles and window coverings will be in good operating condition
               and repair.

        (c)    With respect to Sublessor's warranties and representations set
               forth in subparagraph (b) above, Sublessor shall, promptly after
               receipt of notice from Sublessee, (1) notify Lessor of any
               non-compliance which is Lessor's responsibility under Section
               7(a) or other provision of the Master Lease or (2)


                                      -7-
<PAGE>   23
               remedy or cause to be remedied at Sublessor's sole cost and
               expense any non-compliance which is Sublessor's responsibility
               under the Master Lease.

17.     SURRENDER AT END OF TERM.

        Sublessee agrees to surrender the Premises on expiration or earlier
        termination of the Sublease Term, in the same condition and repair as
        received on the Commencement Date, acts of God, condemnation, casualty,
        hazardous materials not released by Sublessee, and reasonable wear and
        tear excepted. In addition, on or prior to the expiration or earlier
        termination of this Sublease, at Sublessor's option, Sublessee shall
        remove, at Sublessee's sole cost and expense, all telephone, other
        communication, computer and any other cabling and wiring or any sort
        installed in the Premises by Sublessee and shall repair any damage to
        the Premises resulting from such removal.

18.     WAIVER OF SUBROGATION.

        Notwithstanding anything to the contrary contained in the Sublease or
        the Master Lease, Sublessor and Sublessee each release the other and
        their respective agents, employees, successors, assignees and Sublessees
        from all liability for injury or damage to any property except to the
        extent of Lessee's obligations specified in Paragraph 11 of the Master
        Lease.

19.     INDEMNITY.

        Except to the extent caused by any default of Sublessee, its agents,
        employees, contractors or invitees, Sublessor shall indemnify, defend
        with counsel reasonably acceptable to Sublessee, and hold Sublessee
        harmless from and against any and all losses, costs, claims, liabilities
        and damages (including, without limitation, reasonable attorneys' and
        experts' fees) caused by or arising in connection with (i) a breach of
        Sublessor's obligations under the Sublease; (ii) a breach of Sublessor's
        obligations under the Master Lease, unless cause by Sublessee's breach
        of its parallel obligations under the Sublease; or (iii) the negligence
        or willful misconduct of Sublessor, its employees, contractors, agents
        or invitees.

20.     APPROVALS.

        Whenever the Sublease requires an approval, consent, designation,
        determination, selection or judgment by either Sublessor or Sublessee,
        such approval, consent, designation, determination, selection or
        judgment and any conditions imposed thereby shall be reasonable and
        shall not be unreasonably withheld or delayed and, in exercising any
        right or remedy hereunder, each party shall at all times act reasonably
        and in good faith.

21.     MISCELLANEOUS

        (a)    Reasonable Expenditures. Any expenditure by a party permitted or
               required under the Sublease, for which such party is entitled to
               demand and does demand reimbursement from the other party, shall
               be limited to the fair market value of


                                      -8-
<PAGE>   24
               the goods and services involved, shall be reasonably incurred,
               and shall be substantiated by documentary evidence available for
               inspection and review by the other party or its representative
               during normal business hours.

        (b)    Subordination, Nondisturbance and Attornment. Sublessee's rights,
               duties and responsibilities regarding subordination,
               nondisturbance and attornment are set forth in Section 26 of the
               Master Lease.

        (c)    Parking. Sublessee's rights, duties and responsibilities
               regarding parking are set forth in Section 42 of the Master Lease

        (d)    Signage. Sublessee's rights, duties and responsibilities
               regarding signage are set forth in Section 42 of the Master Lease

        IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease
as of the date first set forth above.


SUBLESSOR:                               SUBLESSEE:

HI/FN, INC.                              DRIVING MEDIA. INC.
750 University Avenue                    727 University Avenue
Los Gatos CA 95030                       Los Gatos CA 95030

By:   /s/ CHRISTOPHER BRIGHAM            By:   /s/ David S. Morse
      -------------------------------          ---------------------------------
Name: CHRISTOPHER BRIGHAM                Name: DAVID S. MORSE
      -------------------------------          ---------------------------------
Its:  Vice President - Operations        Its:  President
      -------------------------------          ---------------------------------
Date: April 6, 2001                      Date: April 7, 2001
      -------------------------------          ---------------------------------


                                      -9-