**EXHIBIT
      10.35**




**HI/FN,
      INC.**




**CONSULTING
      AGREEMENT**




This
      Consulting Agreement (“ **Agreement** ”)
      is
      entered into as of November 16, 2006 by and between Hi/fn, Inc. (the
“ **Company** ”)
      and
      Christopher G. Kenber (“ **Consultant** ”).
      The
      Company desires to retain Consultant as an independent contractor to perform
      consulting services for the Company, and Consultant is willing to perform such
      services, on the terms described below. In consideration of the mutual promises
      contained herein, the parties agree as follows:




1 *.*  *Services
      and Compensation* .
      Consultant agrees to perform for the Company the services described in Exhibit A (the
“ **Services** ”),
      and
      the Company agrees to pay Consultant the compensation described in Exhibit A for
      Consultant’s performance of the Services.




2.  *Confidentiality* .




A *.*  *Definition* .
      “ **Confidential
      Information** ”
means
      any non-public information that relates to the actual or anticipated business
      or
      research and development of the Company, technical data, trade secrets or
      know-how, including, but not limited to, research, product plans or other
      information regarding Company’s products or services and markets therefor,
      customer lists and customers (including, but not limited to, customers of the
      Company on whom Consultant called or with whom Consultant became acquainted
      during the term of this Agreement), software, developments, inventions,
      processes, formulas, technology, designs, drawing, engineering, hardware
      configuration information, marketing, finances or other business information.
      Confidential Information does not include information that (i) is known to
      Consultant at the time of disclosure to Consultant by the Company as evidenced
      by written records of Consultant, (ii) has become publicly known and made
      generally available through no wrongful act of Consultant or (iii) has been
      rightfully received by Consultant from a third party who is authorized to make
      such disclosure.




B.  *Nonuse
      and Nondisclosure* .
      Consultant will not, during or subsequent to the term of this Agreement,
      (i) use the Confidential Information for any purpose whatsoever other than
      the performance of the Services on behalf of the Company or (ii) disclose
      the Confidential Information to any third party. Consultant agrees that all
      Confidential Information will remain the sole property of the Company.
      Consultant also agrees to take all reasonable precautions to prevent any
      unauthorized disclosure of such Confidential Information. Without the Company’s
      prior written approval, Consultant will not directly or indirectly disclose
      to
      anyone the existence of this Agreement or the fact that Consultant has this
      arrangement with the Company.




C.  *Former
      Client Confidential Information* .
      Consultant agrees that Consultant will not, during the term of this Agreement,
      improperly use or disclose any proprietary information or trade secrets of
      any
      former or current employer of Consultant or other person or entity with which
      Consultant has an agreement or duty to keep in confidence information acquired
      by Consultant, if any. Consultant also agrees that Consultant will not bring
      onto the Company’s premises any unpublished document or proprietary information
      belonging to any such employer, person or entity unless consented to in writing
      by such employer, person or entity.







D.  *Third
      Party Confidential Information* .
      Consultant recognizes that the Company has received and in the future will
      receive from third parties their confidential or proprietary information subject
      to a duty on the Company’s part to maintain the confidentiality of such
      information and to use it only for certain limited purposes. Consultant agrees
      that, during the term of this Agreement and thereafter, Consultant owes the
      Company and such third parties a duty to hold all such confidential or
      proprietary information in the strictest confidence and not to disclose it
      to
      any person, firm or corporation or to use it except as necessary in carrying
      out
      the Services for the Company consistent with the Company’s agreement with such
      third party.




E.  *Return
      of Materials* .
      Upon
      the termination of this Agreement, or upon Company’s earlier request, Consultant
      will deliver to the Company all of the Company’s property, including but not
      limited to all electronically stored information and passwords to access such
      property, or Confidential Information that Consultant may have in Consultant’s
      possession or control.




3.  *Conflicting
      Obligations* .




A.  *Conflicts* .
      Consultant certifies that Consultant has no outstanding agreement or obligation
      that is in conflict with any of the provisions of this Agreement or that would
      preclude Consultant from complying with the provisions of this Agreement.
      Consultant will not enter into any such conflicting agreement during the term
      of
      this Agreement. Consultant’s violation of this **Section 3.A** will be
      considered a material breach under **Section 5.B** .




4.  *Reports* .
      Consultant also agrees that Consultant will, from time to time during the term
      of this Agreement or any extension thereof, keep the Company advised as to
      Consultant’s progress in performing the Services under this Agreement.
      Consultant further agrees that Consultant will, as requested by the Company,
      prepare written reports with respect to such progress. The Company and
      Consultant agree that the time required to prepare such written reports will
      be
      considered time devoted to the performance of the Services.




5.  *Term
      and Termination* .




A.  *Term* .
      The
      term of this Agreement will begin on the date of this Agreement and will
      continue until the earlier of (i) November 10, 2007 or
      (ii) termination as provided in **Section 5.B** .




B.  *Termination* . Consultant
      may terminate this Agreement upon giving the Company 14 days’ prior written
      notice of such termination pursuant to **Section 9.E** of this
      Agreement. The
      Company may terminate this Agreement immediately and without prior notice for
      Cause. For purposes of this Agreement, “ **Cause** ”
shall
      mean Consultant’s refusal or inability to perform the Services or Consultant’s
      breach of any material provision of this Agreement, the
      Proprietary Information and Inventions Agreement or the Severance Agreement
      and Release by and between Consultant and the Company dated November 16,
      2006.




C.  *Survival* .
      Upon
      such termination, all rights and duties of the Company and Consultant toward
      each other shall cease except:









(1)  The
      Company will pay, within 30 days after the effective date of termination, all
      amounts owing to Consultant for Services completed and accepted by the Company
      prior to the termination date and related expenses, if any, submitted in
      accordance with the Company’s policies and in accordance with the provisions of **Section 1** of this
      Agreement; and





(2)  **Section 2** (Confidentiality), **Section 3** (Conflicting Obligations), **Section 6** (Independent Contractor; Benefits), **Section 7** (Indemnification),
      and **Section 8** (Arbitration and Equitable Relief) will survive termination of this
      Agreement.




6.  *Independent
      Contractor; Benefits* .




A.  *Independent
      Contractor.* It
      is the
      express intention of the Company and Consultant that Consultant perform the
      Services as an independent contractor to the Company. Nothing in this Agreement
      shall in any way be construed to constitute Consultant as an agent, employee
      or
      representative of the Company. Without limiting the generality of the foregoing,
      Consultant is not authorized to bind the Company to any liability or obligation
      or to represent that Consultant has any such authority. Consultant agrees to
      furnish (or reimburse the Company for) all tools and materials necessary to
      accomplish this Agreement and shall incur all expenses associated with
      performance, except as expressly provided in Exhibit A .
      Consultant acknowledges and agrees that Consultant is obligated to report as
      income all compensation received by Consultant pursuant to this Agreement.
      Consultant agrees to and acknowledges the obligation to pay all self-employment
      and other taxes on such income.




B.  *Benefits* .
      The
      Company and Consultant agree that Consultant will receive no Company-sponsored
      benefits from the Company. If Consultant is reclassified by a state or federal
      agency or court as Company’s employee, Consultant will become a reclassified
      employee and will receive no benefits from the Company, except those mandated
      by
      state or federal law, even if by the terms of the Company’s benefit plans or
      programs of the Company in effect at the time of such reclassification,
      Consultant would otherwise be eligible for such benefits.




7.  *Indemnification* .
      Consultant agrees to indemnify and hold harmless the Company and its directors,
      officers and employees from and against all taxes, losses, damages, liabilities,
      costs and expenses, including attorneys’ fees and other legal expenses, arising
      directly or indirectly from or in connection with (i) any negligent,
      reckless or intentionally wrongful act of Consultant or Consultant’s assistants,
      employees or agents, (ii) a determination by a court or agency that the
      Consultant is not an independent contractor, (iii) any breach by the
      Consultant or Consultant’s assistants, employees or agents of any of the
      covenants contained in this Agreement, (iv) any failure of Consultant to perform
      the Services in accordance with all applicable laws, rules and regulations,
      or
      (v) any violation or claimed violation of a third party’s rights resulting
      in whole or in part from the Company’s use of the work product of Consultant
      under this Agreement.







8.  *Arbitration
      and Equitable Relief* .




A.  *Arbitration* .
      Consultant agrees that any and all controversies, claims or disputes with anyone
      (including the Company and any employee, officer, director, shareholder or
      benefit plan of the Company, in its capacity as such or otherwise) arising
      out
      of, relating to or resulting from Consultant’s performance of the Services under
      this Agreement or the termination of this Agreement, including any breach of
      this Agreement, shall be subject to binding arbitration under the Arbitration
      Rules set forth in California Code of Civil Procedure Section 1280 through
      1294.2, including Section 1283.05 (the “ **Rules** ”)
      and
      pursuant to California law. CONSULTANT AGREES TO ARBITRATE, AND THEREBY AGREES
      TO WAIVE ANY RIGHT TO A TRIAL BY JURY WITH RESPECT TO, ALL DISPUTES ARISING
      FROM
      OR RELATED TO THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO: ANY STATUTORY CLAIMS
      UNDER STATE OR FEDERAL LAW, CLAIMS UNDER TITLE VII OF THE CIVIL RIGHTS ACT
      OF
      1964, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE AGE DISCRIMINATION IN
      EMPLOYMENT ACT OF 1967, THE OLDER WORKERS BENEFIT PROTECTION ACT, THE FAMILY
      AND
      MEDICAL LEAVE ACT, THE CALIFORNIA FAMILY RIGHTS ACT, THE CALIFORNIA FAIR
      EMPLOYMENT AND HOUSING ACT, THE CALIFORNIA LABOR CODE, CLAIMS OF HARASSMENT,
      DISCRIMINATION OR WRONGFUL TERMINATION AND ANY STATUTORY CLAIMS. Consultant
      understands that this Agreement to arbitrate also applies to any disputes that
      the Company may have with Consultant.




B.  *Procedure* .
      Consultant agrees that any arbitration will be administered by the Judicial
      Arbitration & Mediation Services (“JAMS”), and that a neutral arbitrator
      will be selected in a manner consistent with its employment arbitration rules
      & procedures (“JAMS Rules”). Consultant agrees that the arbitrator will have
      the power to decide any motions brought by any party to the arbitration,
      including discovery motions, motions for summary judgment and/or adjudication
      and motions to dismiss and demurrers, prior to any arbitration hearing.
      Consultant agrees that the arbitrator will issue a written decision on the
      merits. Consultant also agrees that the arbitrator will have the power to award
      any remedies, including attorneys’ fees and costs, available under applicable
      law. Consultant understands that the Company will pay for any administrative
      or
      hearing fees charged by the arbitrator or JAMS, except that Consultant shall
      pay
      the amount of any filing fees associated with any arbitration Consultant
      initiates that Consultant would have otherwise had to pay had he filed any
      such
      claim in court. Consultant agrees that the arbitrator will administer and
      conduct any arbitration in a manner consistent with the Rules and that, to
      the
      extent that JAMS Rules conflict with the Rules, the Rules will take
      precedence.




C.  *Remedy* .
      Except
      as provided by the Rules, arbitration will be the sole, exclusive and final
      remedy for any dispute between the Company and Consultant. Accordingly, except
      as provided for by the Rules, neither the Company nor Consultant will be
      permitted to pursue court action regarding claims that are subject to
      arbitration. Notwithstanding the foregoing, the arbitrator will not have the
      authority to disregard or refuse to enforce any lawful Company policy, and
      the
      arbitrator shall not order or require the Company to adopt a policy not
      otherwise required by law which the Company has not adopted.




D.  *Availability
      of Injunctive Relief* .
      In
      addition to the right under the Rules to petition the court for provisional
      relief, Consultant agrees that any party may also petition the court





for
      injunctive relief where either party alleges or claims a violation of **Sections 2** (Confidentiality) or **3** (Conflicting Obligations) of this Agreement or any other agreement regarding
      trade secrets, confidential information, nonsolicitation or Labor Code §2870. In
      the event either the Company or Consultant seeks injunctive relief, the
      prevailing party will be entitled to recover reasonable costs and attorneys’
fees.




E.  *Administrative
      Relief* .
      Consultant understands that this Agreement does not prohibit Consultant from
      pursuing an administrative claim with a local, state or federal administrative
      body such as the Department of Fair Employment and Housing, the Equal Employment
      Opportunity Commission or the workers’ compensation board. This Agreement does,
      however, preclude Consultant from pursuing court action regarding any such
      claim.




F.  *Voluntary
      Nature of Agreement* .
      Consultant acknowledges and agrees that Consultant is executing this Agreement
      voluntarily and without any duress or undue influence by the Company or anyone
      else. Consultant further acknowledges and agrees that Consultant has carefully
      read this Agreement and has asked any questions needed to understand the terms,
      consequences and binding effect of this Agreement and fully understand it,
      including that Consultant is waiving its right to a jury trial. Finally,
      Consultant agrees that Consultant has been provided an opportunity to seek
      the
      advice of an attorney of its choice before signing this Agreement.




9.  *Miscellaneous* .




A.  *Governing
      Law* .
      This
      Agreement shall be governed by the laws of California without regard to
      California’s conflicts of law rules.




B.  *Assignability* .
      Except
      as otherwise provided in this Agreement, Consultant may not sell, assign or
      delegate any rights or obligations under this Agreement.




C.  *Entire
      Agreement* .
      This
      Agreement constitutes the entire agreement between the parties with respect
      to
      the subject matter of this Agreement and supersedes all prior written and oral
      agreements between the parties regarding the subject matter of this Agreement,
      with the exception of the Proprietary Information and Inventions Agreement,
      the Severance Agreement and Release by and between Consultant and the Company
      dated November 16, 2006 and any agreements relating to Employee’s outstanding
      equity awards with the Company.




D.  *Headings* .
      Headings are used in this Agreement for reference only and shall not be
      considered when interpreting this Agreement.




E.  *Notices* .
      Any
      notice or other communication required or permitted by this Agreement to be
      given to a party shall be in writing and shall be deemed given if delivered
      personally or by commercial messenger or courier service, or mailed by U.S.
      registered or certified mail (return receipt requested), to the party at the
      party’s address written below or at such other address as the party may have
      previously specified by like notice. If by mail, delivery shall be deemed
      effective three business days after mailing in accordance with this **Section 9.E** .




(1)  If
        to the
        Company, to:
 Hi/fn,
        Inc.





Attention:
      General Counsel


750
      University Ave.


Los
      Gatos, CA 95032


(408)
      399-3500


(408)
      399-3501




(2)  If
      to
      Consultant, to the address for notice on the signature page to
      this
      Agreement or, if no such address is provided, to the last address of Consultant
      provided by Consultant to the Company.




F.  *Attorneys’
      Fees* .
      In any
      court action at law or equity that is brought by one of the parties to this
      Agreement to enforce or interpret the provisions of this Agreement, the
      prevailing party will be entitled to reasonable attorneys’ fees, in addition to
      any other relief to which that party may be entitled.




G.  *Severability* .
      If any
      provision of this Agreement is found to be illegal or unenforceable, the other
      provisions shall remain effective and enforceable to the greatest extent
      permitted by law.




IN
      WITNESS WHEREOF, the parties hereto have executed this Consulting Agreement
      as
      of the date first written above.


**CONSULTANT**
            
            **HI/FN,
                INC.**By:
            /s/
              Christopher G. Kenber
            
            By:
            /s/
              William R. WalkerName:
            Christopher
                G. Kenber
            
            Name:
            William
                R. WalkerTitle:
            Vice
                President of Finance, Chief Financial Officer and
                Secretary









Address
      for Notice:














EXHIBIT
      A




Services
      and Compensation




1.  *Contact* .
      Consultant’s principal Company contact:




Name:
      Albert E. Sisto




Title:
      Interim Chief Executive Officer and Chairman of the Board of
      Directors




2.  *Services* .
      The
      Services shall include, but shall not be limited to, the following:




Consultant
      will provide consulting and advisory services relating to matters and projects
      or work in process that had been within the Consultant’s areas of responsibility
      while he served as Chief Executive Officer of the Company, including, without
      limitation, such appropriate tasks as the Company’s Board of Directors (the
“ **Board** ”)
      may
      request as necessary and appropriate to assist his successor to transition
      into
      the position of the Company’s Chief Executive Officer and traveling to key
      customers of the Company. Consultant will be required to provide up to twenty
      (20) hours per month (as requested by the Company) in Services under this
      Agreement.




3.  *Compensation* .




A.  The
      Company will pay Consultant $2,000.00 per month.




B.  The
      Company will reimburse Consultant for all reasonable expenses incurred by
      Consultant in performing the Services pursuant to this Agreement, if Consultant
      receives written consent from an authorized agent of the Company prior to
      incurring such expenses and submits receipts for such expenses to the Company
      in
      accordance with Company policy.