**EXHIBIT
      10.34**




**SEVERANCE
      AGREEMENT AND RELEASE**




**RECITALS**






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




WHEREAS,
      Employee was employed by the Company;




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




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




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




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




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




**COVENANTS**




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




2.  Consideration .




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




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





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




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




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




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




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




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




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


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




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




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




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




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




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




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




6.  Acknowledgement
      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 and the Company
      agree that this waiver and release does not apply to any rights or claims that
      may arise under ADEA after the Effective Date of this Agreement. Employee
      acknowledges that the consideration given for this waiver and release Agreement
      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 up
      to twenty-one (21) days within which to consider this
      Agreement;


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(c)  he
      has
      seven (7) days following his execution of this Agreement to revoke this
      Agreement;




(d)  this
      ADEA
      waiver will not be effective until the seven (7) day 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.




7.  Civil
      Code Section 1542 .
      The
      Parties represent that they are not aware of any claim by either of them other
      than the claims that are released by this Agreement. Employee acknowledges
      that
      he had the opportunity to seek the advice of legal counsel and is familiar
      with
      the provisions of California Civil Code Section 1542, which provides as
      follows:




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




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.




8.  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
      other person or entity referred to herein. 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 other person or entity referred
      to
      herein.




9.  No
      Cooperation .
      Employee agrees he will not act in any manner that might damage the business
      of
      the Company. Employee agrees that he will not 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 the
      Company and/or any officer, director, employee, agent, representative,
      shareholder or attorney of the Company, unless under a subpoena or other court
      order to do so. Employee further agrees both to immediately notify the Company
      upon receipt of any court order, subpoena, or any legal discovery device that
      seeks or might require the disclosure or production of the existence or terms
      of
      this Agreement, and to furnish, within three (3) business days of its receipt,
      a
      copy of such subpoena or legal discovery device to the Company.




10.  Non-Solicitation .
      Employee agrees that for a period of twelve (12) months immediately following
      the Termination Date, Employee will not, either directly or indirectly, whether
      as an employee, owner, sole proprietor, partner, director, member, consultant,
      agent, founder, co-venturer or otherwise, (i) solicit, induce, or influence
      any
      person to leave employment with the Company, or (ii) directly or indirectly
      solicit business from any of the Company’s


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customers
      and users on behalf of any business that directly competes with the principal
      business of the Company.




11.  Non-Disparagement .
      Employee agrees to refrain from any defamation, libel or slander of the Company
      or its affiliates or tortious interference with the contracts and relationships
      of the Company or its affiliates. All inquiries by potential future employers
      of
      Employee will be directed to the Company’s General Counsel. Upon inquiry, the
      Company will only state the following: Employee’s last position and dates of
      employment.




12.  No
      Admission of Liability .
      The
      Parties understand and acknowledge that this Agreement constitutes a compromise
      and settlement of disputed claims. No action taken by the Parties hereto, or
      either of them, either previously or in connection with this Agreement, will
      be
      deemed or construed to be (a) an admission of the truth or falsity of any claims
      heretofore made or (b) an acknowledgment or admission by either party of any
      fault or liability whatsoever to the other party or to any third
      party.




13.  No
      Knowledge of Wrongdoing .
      Employee represents that he has no knowledge of any wrongdoing involving
      improper or false claims against a federal or state governmental agency, or
      any
      other wrongdoing that involves Employee or other present or former Company
      employees.




14.  Costs .
      The
      Parties will each bear their own costs, expert fees, attorneys’ fees and other
      fees incurred in connection with this Agreement.




15.  Arbitration .
      The
      Parties agree that any and all disputes arising out of, or relating to, the
      terms of this Agreement, their interpretation, and any of the matters herein
      released, will be subject to binding arbitration in Santa Clara County before
      the Judicial Arbitration & Mediation Services (“ **JAMS** ”)
      pursuant to its employment arbitration rules & procedures (“ **JAMS
      Rules** ”).
      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 Parties agree that the prevailing
      party in any arbitration will be entitled to injunctive relief in any court
      of
      competent jurisdiction to enforce the arbitration award. The Parties agree
      that
      the prevailing party in any arbitration will be awarded its reasonable
      attorneys’ fees and costs. **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.** 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 subject matter of their dispute relating to Employee’s obligations under
      this Agreement and the agreements incorporated herein by reference.




16.  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.


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17.  No
      Representations .
      Each
      party represents that it has had the opportunity to consult with an attorney,
      and has carefully read and understands the scope and effect of the provisions
      of
      this Agreement. Neither party has relied upon any representations or statements
      made by the other party hereto which are not specifically set forth in this
      Agreement.




18.  Severability .
      In the
      event that any provision hereof becomes or is declared by a court of competent
      jurisdiction to be illegal, unenforceable or void, this Agreement will continue
      in full force and effect without said provision so long as the remaining
      provisions remain intelligible and continue to reflect the original intent
      of
      the Parties.




19.  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
      relationship with the Company, and supersedes and replaces any and all prior
      agreements and understandings between the Parties concerning the subject matter
      of this Agreement and Employee’s relationship with the Company, with the
      exception of the Confidentiality Agreement and any agreements relating to
      Employee’s outstanding equity awards with the Company.




20.  No
      Waiver .
      The
      failure of any party to insist upon the performance of any of the terms and
      conditions in this Agreement, or the failure to prosecute any breach of any
      of
      the terms and conditions of this Agreement, will not be construed thereafter
      as
      a waiver of any such terms or conditions. This entire Agreement will remain
      in
      full force and effect as if no such forbearance or failure of performance had
      occurred.




21.  No
      Oral Modification .
      Any
      modification or amendment of this Agreement, or additional obligation assumed
      by
      either party in connection with this Agreement, will be effective only if placed
      in writing and signed by both Parties or by authorized representatives of each
      party.




22.  Governing
      Law .
      This
      Agreement will be deemed to have been executed and delivered within the State
      of
      California, and it will be construed, interpreted, governed, and enforced in
      accordance with the laws of the State of California, without regard to conflict
      of law principles. To the extent that either party seeks injunctive relief
      in
      any court having jurisdiction for any claim relating to the alleged misuse
      or
      misappropriation of trade secrets or confidential or proprietary information,
      each party hereby consents to personal and exclusive jurisdiction and venue
      in
      the state and federal courts of the State of California.




23.  Attorneys’
      Fees .
      In the
      event that either Party brings an action to enforce or effect its rights under
      this Agreement, the prevailing party will be entitled to recover its costs
      and
      expenses, including the costs of mediation, arbitration, litigation, court
      fees,
      plus reasonable attorneys’ fees, incurred in connection with such an
      action.




24.  Effective
      Date .
      This
      Agreement is effective after it has been signed by both parties and after seven
      (7) days have passed since Employee has signed the Agreement (the “ **Effective
      Date**”),
      unless revoked by Employee within seven (7) days after the date the Agreement
      was signed by Employee.


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




26.  Voluntary
      Execution of Agreement .
      This
      Agreement is executed voluntarily and without any duress or undue influence
      on
      the part or behalf of the Parties hereto, with the full intent of releasing
      all
      claims. The Parties acknowledge that:




(a)  They
      have
      read this Agreement;




(b)  They
      have
      been represented in the preparation, negotiation, and execution of this
      Agreement by legal counsel of their own choice or that they have voluntarily
      declined to seek such counsel;




(c)  They
      understand the terms and consequences of this Agreement and of the releases
      it
      contains; and




(d)  They
      are
      fully aware of the legal and binding effect of this Agreement.




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


Hi/fnDated:
                November 16, 2006
            
            By
            /s/
                William R. WalkerWilliam
                R. Walker
              Vice
                President of Finance, Chief Financial Officer
              and
                Secretary





CHRISTOPHER
                G. KENBER, an individualDated:
                November 16, 2006
            
            By
            /s/
                Christopher G. KenberChristopher
                G. Kenber





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