20-F










Exhibit 4.11  




EXHIBIT B  



	 	
CERTAIN
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE SYMBOL
“*” HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO OMITTED






Flextronics
Manufacturing Services Agreement 



        This
Manufacturing Services Agreement (“Agreement”) is entered into this as of July
19, 2007 by and between Allot Communications Ltd., having its place of business at 22
Hanagar St., Hod Hasharon, Israel (“Customer”) and Flextronics (Israel) Ltd.,
having its place of business at Migdal – Haemek, P.O.B 867, Israel
(“Flextronics”) (Customer and Flextronics shall be referred to hereinafter, each
a “Party” and collectively the “Parties”). 



        Customer
has created a market for Customer’s Products as defined in Exhibit
A and is solely responsible for the sales and marketing of
the Products. Flextronics has developed processes and practices for manufacturing products
for many different electronic applications and at Customer’s request desires to
manufacture the Products in accordance with Customer’s specifications all subject to
the terms and conditions contained herein. Customer acknowledges that Flextronics’s
expertise is manufacturing and that Flextronics’s responsibility related to the
Customer’s Products is limited to this extent, The Parties agree as follows:  



     1.
          WORK, LICENSE, DEFINITIONS 



        1.1.
Work. Flextronics agrees to perform the Work as defined in
          Section 1.3 herein pursuant to purchase orders or changes thereto issued by
          Customer and accepted by Flextronics subject to and in accordance with the
terms           and conditions stipulated in this Agreement.  




        1.2.
License. Flextronics is hereby granted by Customer a
          non-exclusive, non-transferable or assignable, revocable license limited for
the           term of this Agreement to use Customer’s patents, trade secrets and
other           intellectual property (hereinafter “Customer’s IP”)
for           the sole and exclusive purpose of performing Flextronics’s obligations
          under this Agreement. Customer retains full ownership in Customer’s IP
          including to any development and/or enhancement based on thereto, even if
          devised, created or developed by Flextronics (hereinafter “IP
          Enhancements”), and Customer’s IP shall not be affected or
limited           in any manner whatsoever due to Flextronics’s right to use such
          Customer’s IP or IP Enhancements for the purpose of performing this
          Agreement. For avoidance of doubt, the use by Customer of the IP Enhancement
          shall be free of charge royalty free and be not subject to any restriction
          whatsoever. Customer’s IP and IP Enhancements shall remain Confidential
          Information as more fully described in Section 10.1. By providing Flextronics
          the right to use Customer’s IP and IP Enhancements for the sole purpose of
          performing this Agreement, Customer does not grant any express or implied right
          to Flextronics to or under any patents, copyrights, trademarks, or trade secret
          included in or related to Customer’s IP other than the limited right to
use           the same as set forth above.  











        Flextronics
shall use Customer’s IP and IP Enhancements only in a manner and form pre-approved by
Customer or pursuant to this Agreement. Flextronics will not misuse or divulge in any
manner Customer’s IP and/or IP Enhancements, and will not, or knowingly allow any
third parties to: (i) delete or modify any Customer’s IP proprietary notices which
appear on or in the Product(s) or its related documents including the Specifications; (ii)
directly or indirectly modify, change, alter or otherwise tamper the Specifications and/or
the Product(s) and/or modify, adapt, translate or make derivative works based on the
Specifications and/or Product(s); (iii) sell, sublicense, rent, lease, disclose,
distribute, publish, copy, transfer, use or otherwise make the Specifications and/or
Product(s) available to any third party other than Customer, or allow third parties other
than Customer to use the Specifications and/or Product(s); and (iv) copy the documentation
related to the Products – all except as otherwise specifically provided for in this
Agreement. 



        If
at any time, Flextronics becomes aware of any breach of the provision of Section 1.2
above, it shall promptly notify Customer in writing. Upon being aware of such breach,
Flextronics shall promptly take steps to cure such breach to ensure that its use of
Customer’s IP and/or IP Enhancements shall comply with this Agreement. In the event a
cure is not effected within 30 days period, then the license granted herein will
automatically terminate until the standards of use are restored and Flextronics receives
written notice from Customer that it may resume said uses of Customer IP and/or IP
Enhancements. 



        1.3.
Definitions. Flextronics and Customer agree to the
          following definitions:  



	 	 	
	 	"Approved Vendor List" or "AVL"  	Shall mean a list of manufacturers currently approved by Customer
	 	  	to provide the Materials specified in the bill of materials for
	 	  	the Product.
	 	  
	 	"Confidential Information" 	Shall mean any know-how, trade secrets, technical information,
	 	  	drawings, models, business information (including information
	 	  	contained in any reports provided under this Agreement),
	 	  	inventions, discoveries, methods, procedures, formulae, protocols,
	 	  	techniques, data, all whether disclosed in oral, written, graphic,
	 	  	or electronic form and including the Specification, Customer's IP
	 	  	and IP Enhancements.
	 	  
	 	"Cost" 	As it relates to Inventory and Special Inventory shall mean the
	 	  	cost represented on the bill of Materials.
	 	  
	 	"Customer" 	Shall mean Allot Communications Ltd.
	 	  
	 	"Customer Controlled Materials" 	Shall mean certain Materials provided by suppliers with whom
	 	  	Customer has a commercial contractual or non contractual
	 	  	relationship, and which are included in the AVL.
	 	  
	 	"Customer Controlled Materials Terms" 	Shall mean the terms and conditions that Customer has negotiated
	 	  	with its suppliers for the purchase of Customer Controlled
	 	  	Materials.








2









	 	 	
	 	  
	 	"Disputes" 	Shall have the meaning set forth in Section 11.11 below.
	 	  
	 	"Logistics Data" 	Shall mean material procurement policy such as: Lead Time, Long
	 	  	Lead time, Economic Order Inventory, Minimum Order Quantity (MOQ),
	 	  	Order Multiple, Cancellation window and Order Period all as
	 	  	defined in Exhibit B attached hereto or as mutually agreed in  
	 	  	writing.
	 	  
	 	"Economic Order Inventory" 	Shall mean Materials purchased in quantities greater than the
	 	  	required amount for purchase orders, in order to achieve price
	 	  	targets for such Materials.
	 	  
	 	"Flextronics" 	Shall mean Flextronics (Israel) Ltd.
	 	  
	 	"Inventory" 	Shall mean any Materials that are used to manufacture the Products
	 	  	based on the Logistics Data pursuant to a purchase order from the
	 	  	Customer.
	 	  
	 	"Lead Time(s)" 	Shall mean in Section 2.3 the lead time recorded on Flextronics's
	 	  	MRP system at the time of procurement of Inventory and Special
	 	  	Inventory or at the time of the cancellation of the purchase order
	 	  	or termination of this Agreement.
	 	  
	 	"Long Lead Time Materials" 	Shall mean Materials with lead times exceeding the period covered
	 	  	by the accepted purchase orders for the Product according to the
	 	  	Logistics Data or this Agreement.
	 	  
	 	"Materials" 	Shall mean labor, components, materials and supplies that are used
	 	  	in the manufacturing, testing, packaging and distribution of
	 	  	electronic products.
	 	  
	 	"Minimum Order Quantity" 	Shall mean Materials purchased according to the Logistics Data in
	 	  	excess of requirements for purchase orders because of minimum lot
	 	  	sizes available from manufacturers.
	 	  
	 	"Purchase Order/s" or "purchase order/s"  	 Purchase orders for Products issued by Customer in accordance with 
the terms hereof and accepted by Flextronics
	 	  
	 	"Product" 	Shall mean the Customer's products described in Exhibit C.  
	 	  
	 	"Special Inventory" 	Shall mean any Long Lead Time Materials and/or Minimum Order
	 	  	Quantity and/or Economic Order Inventory.






3










	 	 	
	 	"Specifications" 	Shall mean the written specifications for each Product to be
	 	  	produced and provided by Customer, which shall include bill of
	 	  	Materials (including AVL), designs, schematics, assembly drawings,
	 	  	process documentation, test specifications, current revision
	 	  	number and any additional information reasonably requested by
	 	  	Flextronics or otherwise required hereunder.
	 	  
	 	"Work" 	Shall mean the manufacturing and delivery of the Products to
	 	  	Customer in accordance with and subject to the terms of this
	 	  	Agreement including: labor, the procurement of Inventory and
	 	  	Special Inventory, allocation of the required manpower,
	 	  	implementation of planning and control of the manufacturing
	 	  	process, execution of the integrating processes, assembling,
	 	  	testing, and packing of the Products, all of the foregoing
	 	  	pursuant to detailed written Specifications for each such Product
	 	  	which are attached to this Agreement and the delivering of such
	 	  	Products in accordance with Customer's Purchase Orders issued in
	 	  	accordance with the terms hereof.
	 	  
	 	"Reports and Metrics" 	Shall mean Customer reports and metrics that are defined by
	 	  	Customer and attached to this Agreement or otherwise mutually
	 	  	agreed by the parties in writing and will be provided by
	 	  	Flextronics on a periodical basis.









     2.
          FORECASTS, ORDERS, MATERIALS PROCUREMENT 



        2.1.
Forecast. Customer shall provide Flextronics, on a monthly
          basis, a rolling six (6) months non-binding forecast indicating Customer’s
          Product requirements on a monthly basis.  




        2.2.
Purchase Orders. Customer will issue written electronic or
          fax transmitted purchase orders once per calendar month which specify all
          Products to be delivered within a minimum four (4) month period commencing on
          the date of acceptance of the purchase order. Each purchase order shall
          reference this Agreement and the applicable written Specifications as described
          in Section 1.3. Flextronics shall accept or reject each purchase order
according           to its terms (including the delivery date) within five (5) working
days of           receipt of such order. If a purchase order has not been confirmed
within such           period it shall be deemed rejected.  




        Customer
may use its standard purchase order form to release items, quantities, prices, schedules,
change notices, specifications, or other notices, subject to and in accordance with the
terms and conditions provided for hereunder. Notwithstanding the foregoing, the Parties
agree that the terms and conditions contained in this Agreement shall be the sole and
exclusive terms and conditions related to the Work performed under this Agreement, unless
Flextronics has explicitly agreed otherwise in writing in each instance by an authorized
signatory. 



        2.3.
Materials Procurement. Customer’s accepted purchase
          orders will constitute authorization for Flextronics to procure Inventory and
          Special Inventory in compliance with the Logistics Data in order to manufacture
          the Products covered by such purchase orders.  



4








        Logistics
Data will be reviewed and approved by Customer once per quarter prior to recording on
Flextronics’s MRP system. Customer will either approve or ask to amend (if necessary)
Logistics Data within ten (10) days from receipt of data from Flextronics based on changes
in manufacturers’ items commercial terms in the market (i.e., lead time, prices,
etc.). If Customer has not requested amendment within said period the Logistics Data shall
be deemed approved. 



        Flextronics
may purchase, subject to Customer prior written approval, Long Lead-Time Materials
sufficient to meet all deliveries under the purchase orders and Product forecast in effect
at the time the order with the supplier is placed, and may reasonably purchase Minimum
Order Quantity even if greater than the amount necessary to meet purchase orders and
Product forecast. Flextronics shall purchase Economic Order Inventory only subject to the
prior written approval of Customer. 



        Flextronics
agrees to use reasonable commercial actions in order to reduce the cost of the Materials
procured, and of the performance of the Work. 



        2.4
Preferred Supplier. Simultaneously with the execution of
          this Agreement Customer shall provide Flextronics and maintain an Approved
          Vendor List (“Vendors”). Flextronics shall purchase from Vendors on a
          current AVL the Materials required to manufacture the Product. Customer shall
          allow Flextronics to suggest alternative vendors to be included on AVL’s
          for Materials. Any such alternative vendor will be included in the AVL only if
          Customer’s prior written approval was provided to Flextronics regarding
          such vendor.  




     3.
          SHIPMENTS, SCHEDULE CHANGE, CANCELLATION, STORAGE 



        3.1.
Delivering and Shipments. Flextronics undertakes that all
          shipments to Customer will be made on the required delivery dates set forth in
          the related accepted purchase order and such shipments will contain the correct
          quantities ordered by Customer in the applicable Purchase Order. Provided,
          however, that Flextronics may reschedule a shipment to the extent the delay
          results from circumstances which are beyond its reasonable commercial control
or           such delay has been required, and/or consented by Customer. All Products
          delivered pursuant to the terms of this Agreement shall be suitably packed for
          shipment in accordance with Customer’s Specifications and marked for
          shipment to Customer’s destination specified in the applicable purchase
          order. Shipment terms will be to Customer’s facilities (including to any
          facility designated by Customer) in Israel, provided, however, that upon prior
          reasonable written notice, Customer, at its option, may collect shipments from
          Flextronics’ facility. Risk of loss and title to Product(s) will pass to
          Customer upon delivery to the above destinations as applicable. Any special
          packing expenses not included in the original price quotation for the Products,
          will be paid by Customer provided that Flextronics notifies customer in writing
          and in advance of such expense.  




        3.2.
Quantity Increases and Shipment Schedule Changes.  




        For
any accepted purchase order, Customer may without incurring any additional costs (i)
increase the quantity of Products or (ii) reschedule the quantity of Products and/or their
shipment date, both as provided in the table below. With respect to any increase in the
quantity of Products, (1) Flextronics will be obligated to fulfill such increase as
provided in the table below and (2) to the extent that such increase exceeds the allowable
quantity increase provided in the table below, Flextronics will use reasonable commercial
efforts to fulfill such excess increase. 



5












	Maximum Allowable Variance From Accepted Purchase Order Quantities/Shipment Dates

	# of days before

Shipment Date

on Purchase Order
	Allowable

Quantity

Increases
	Maximum

Reschedule

Quantity
	Maximum

Reschedule

Period

	 			
				
				
	 	0-14	 	 	*%	 	 	*%	 		0	 
	 	15-30	 	 	*%	 	 	*%	 		30 days	 
	 	31-60	 	 	*%	 	 	*%	 		30 days	 
	 	61-90	 	 	*%	 	 	*%	 		30 days	 
	 	91-120	 	 	*%	 	 	*%	 		60 days	 





Any purchase order quantities
increased or rescheduled pursuant to this subsection (a) may not be subsequently increased
or rescheduled. Allowable quantity increases are subject to Materials’ availability.
Flextronics will use reasonable commercial efforts to meet quantity increases. 



        Except
as set forth herein above, all changes in quantity or shipment date require
Flextronics’s prior written approval which will not be unreasonably withheld. If
Customer wishes to reschedule in a manner not consistent with this Agreement (including
rescheduling beyond the limitations as per the table above, whether or not consented by
Flextronics), then Customer will issue an advance payment in the amount equal to the
consideration under this Agreement due for the Excess Inventory (as defined below).
However, any amount paid to Flextronics as an advance payment against Excess Inventory as
detailed above, will be deducted from payment due to Flextronics for any future
purchase(s) made by Customer under this Agreement of Products that include the same
Inventory and/or Special Inventory, such deduction to be made in the amounts already paid
under the pre-payment for the same items. 



        In
addition, if Flextronics notifies Customer that such Inventory and/or Special Inventory
has remained in Flextronics’s possession for more than ninety (90) days since the
reschedule request, then Customer agrees to immediately purchase such Inventory and/or
Special Inventory from Flextronics upon receipt of the notice and to pay Flextronics for
such Inventory, and Special Inventory as follows: (a) *% of the Cost of all
Inventory and Special Inventory in Flextronics’s possession which is not returnable
without charge (unless the charge was approved by Customer as set forth in section (b)
below) to the vendor or usable for other customers whether in raw form or work in process
as determined in Flextronics’ sole discretion, and of all Inventory and Special
Inventory on order and not cancelable without charge (unless the charge was approved by
Customer), (b) any vendor cancellation charges actually incurred or payable with respect
to Inventory and/or Special Inventory accepted for cancellation or return to the vendor
provided such cancellation charges were approved in writing in advance by Customer. 



        If
Flextronics agrees to accept a reschedule or increase in excess of the flexibility table
in subsection (a) and if there are extra costs to meet such reschedule or increase,
Flextronics will inform Customer of such extra costs and will obtain from Customer its
written approval of paying said extra costs. Customer shall not be liable for any
additional costs incurred by Flextronics as set above, if such costs were not approved by
Customer as set herein. 








* Omitted pursuant to a confidential
treatment request. The confidential portion has been filed separately with the SEC. 




6








        Prior
to invoicing Customer for the amounts due pursuant to this Section, Flextronics will use
its reasonable commercial efforts to return unused Inventory and Special Inventory and to
cancel pending orders for such inventory, and to dispose of it either through integration
in other products, or in any other reasonably commercial possible manner, in order to
mitigate the amounts payable by Customer. Customer shall pay all amounts due under this
Section within thirty (30) days from the end of the calendar month on which Flextronics
issued an invoice. Flextronics will ship the Inventory and Special Inventory paid for by
Customer under this section to Customer or as instructed by Customer in writing, but in
any event in Israel, promptly upon said payment by Customer. Risk of loss and title to
that Inventory and Special Inventory will pass to Customer upon delivery to one of the
above destinations. In the event Customer does not pay within above payment terms, and
without derogating from Flextronics’s remedies under law, Flextronics will be
entitled to dispose of such Inventory and Special Inventory in a commercially reasonable
manner, including with respect to price and to credit Customer for any monies received
from third parties in consideration of the sale of aforesaid Inventory and/or Special
Inventory. If the consideration received shall be less than the amounts due to
Flextronics, Flextronics shall submit an invoice for the balance amount due and Customer
agrees to pay said amount within thirty (30) days from the end of the calendar month on
which such invoice was issued. 



“Excess Inventory”
shall be defined as inventory and non canceled open purchase order issued by Flextronics
for Materials that do not have demand for the following three (3) months due to a change
in Purchase Orders or forecast, or obsolescence. “Quarter” shall be defined as
calendar quarter. Excess Inventory shall be calculated at the end of each Quarter.
Customer shall issue an advance payment against the future purchase of Products equal to
the Cost of Excess Inventory at the end of each Quarter. Reconciliation shall be made with
respect to the residual balance of prior advance payments and the new Excess Inventory
value. 



        3.3.
Cancellation of Orders and Customer Responsibility for           Inventory.
Customer may cancel any portion of the Product           quantity of an accepted purchase
order at any time, provided that it will           thereupon pay Flextronics for
Products, Inventory, and Special Inventory           affected by the cancellation as
follows: (i) *% of the current           price for all finished Products in
Flextronics’s possession; (ii) *% of the           Cost of all Inventory and Special
Inventory in Flextronics’s possession and           not returnable without charge
(unless the charge was approved by Customer) to           the vendor or usable for other
customers at Flextronics sole discretion, whether           in raw form or work in
process; (iii) *% of the Cost of all Inventory and           Special Inventory on order
and not cancelable without charge (unless the charge           was approved by Customer)
or usable for other customers at Flextronics sole           discretion; (iv) any vendor
cancellation charges incurred with respect to           Inventory and Special Inventory
accepted for cancellation or return by the           vendor provided such cancellation
charges were approved in writing in advance by           Customer and (v) Expenses
incurred by Flextronics related to labor costs and           equipment specifically put
in place to support Customer’s purchase orders,           where such expenses, were
pre-approved in writing by Customer. Without           derogating from the aforesaid,
Flextronics will use reasonable commercial           efforts to reduce the cost borne by
Customer as a result of the purchase           order’s cancellation.  







* Omitted pursuant to a confidential
treatment request. The confidential portion has been filed separately with the SEC. 





7







        3.4.
Customer Responsibility for Ordered Product; Storage of Ordered           Product.  




        In
the event Customer does not arrange for the prompt pickup of Products ordered and
inspected by it under this Agreement within 14 days after being informed by Flextronics
that such Products are ready for pickup in accordance with Customer’s purchase order,
then Customer hereby authorizes Flextronics to transfer such Products to a warehouse
operated by Flextronics or a third party as instructed by Customer. Upon completing a
transfer of said Product(s) to a third party warehouse, Flextronics will notify Customer
regarding said transfer. Such transfer shall be considered a delivery and sale to Customer
for all purposes of this Agreement, and title and risk of loss for such Products shall
thereupon transfer from Flextronics to Customer. In accordance with the terms of this
Agreement, Flextronics shall be entitled to invoice Customer for (i) such sale (Products)
and (ii) in the event Product(s) are stored at Flextronics facilities storage and handling
charges equal to *, or any portion thereof, that the Products are stored for
Customer. Such storage and handling fee shall cover the expense of *. During the time that
the Products are stored at Flextronics facilities pursuant to this section hereof,
Customer shall have the right, upon prior reasonable written notice, to inspect the
Products for the purposes of this Agreement. Customer may, at any given time, transfer by
itself the Product(s) to any other facility or upon Customer’s request, Flextronics
shall ship the Products to Customer under the terms of this Agreement at Customer’s
expense. 



        3.5.
Audit and Access  




    (i)        Flextronics
shall provide Customer periodical reports in the format agreed by           Parties,
which shall be submitted each quarter. Customer may request other           reports
pertaining to the Work and Flextronics will provide such reports, to the           extent
commercially reasonable.  



    (ii)        Customer
shall have the right, at its expense, to conduct audits of the           manufacturing
services and related facilities, for the purpose of auditing           Flextronics’s
compliance with the manufacturing provisions of this           Agreements, as follows:
The audits may include, only the equipment designated           for the manufacturing
process, the facility at Flextronics’s premises,           finished goods warehouse,
the inventory designated for the Work and Product(s)           and any technical records
(manufacturing specifications, production files and           quality documentation). All
audits shall be performed within Flextronics’          facility. No documents or
data of any kind, or any copies, may be removed from           Flextronics’ facility.
Customer will conduct the audits in a reasonable           manner so as not to cause
undue disruption to Flextronics’ Work. Audits           shall be conducted during
business hours, and shall be coordinated with           Flextronics at least 72 hours in
advance. In the course of such audits and at           Customer sole expense Flextronics
shall provide, and shall inform its           subcontractors to provide, such auditors
any reasonable assistance that they may           require in accordance with the
aforesaid.  



    (iii)        If,
as a result of an audit, it is thought that Flextronics has undercharged or
          overcharged Customer, Customer shall notify Flextronics in writing of the
amount           of such undercharge or overcharge, and shall specify the relevant data
and the           reasoning for its determination, The Parties will conduct in good faith
          discussion in order to reach an agreement regarding said undercharged or
          overcharged amounts.  







* Omitted pursuant to a confidential
treatment request. The confidential portion has been filed separately with the SEC. 



8







4. ENGINEERING CHANGES 



        Customer
may request, in writing, that Flextronics incorporate engineering changes into the
Product. Such request will include a description of the proposed engineering changes
sufficient to permit Flextronics to accurately evaluate its feasibility and cost.
Flextronics shall respond to Customer’s request in writing, within 3 working days of
notification and shall state the costs and time of implementation and the impact on the
delivery schedule and pricing of the Product. Flextronics will not proceed with the
engineering changes until the Parties have agreed upon the changes to the Product’s
Specifications, delivery schedule and Product pricing and the Customer has issued a
purchase order for the implementation costs to be borne by the Customer and the Cost of
Inventory and Special Inventory on-hand and on-order that becomes obsolete in connection
therewith (it being clarified that if Products, Inventory and Special Inventory are
cancelled as affected by the ECO then such Products, Inventory and Special Inventory will
be invoiced and paid as per Section 3.3). 



5. TOOLING,
NON-RECURRING EXPENSES, SOFTWARE 



        Flextronics
shall provide tooling that is not Product-specific at its expense. Customer shall pay for
or obtain and deliver to Flextronics any Product-specific tooling and other reasonably
necessary non-recurring expenses, to be set forth in Flextronics’s quotation, such
specific product or tooling shall remain Customer’s sole and exclusive property
(“Customer Tooling”). All Customer Tooling that Customer provides to Flextronics
is and shall remain the sole property of Customer. Customer grants Flextronics a non
exclusive, non transferable, non assignable license to use Customer Tooling: (i) only for
the purposes required to perform Flextronics’ obligations under this Agreement; (ii)
subject to the terms and conditions set forth in section 1.2 above; (iii) provided
Flextronics will not by itself or knowingly allow any third parties to (1) access, delete,
modify, alter, or change software incorporated in Customer Tooling, or make inoperable
authorization keys or license control utilities, or decompile or perform reverse
engineering of such software, or modify, adapt, translate or make derivative works based
on such software or the documentation related thereto; (2) sell, sublicense, rent, lease
or otherwise commercialize, disclose, distribute, publish, copy, transfer or otherwise
make such software available to any party other than Customer, or allow third parties
other than Customer to use such software; and (iv) provided Flextronics will not transfer
the license granted under this section to any third party, all except as otherwise
required for the purposes of this Agreement but subject to Customer’s prior written
approval. All software developed by Flextronics (excluding any software which is a work
for hire product pursuant to this Agreement) to support the process tooling or otherwise
shall be and remain the property of Flextronics. 



9







6. EXPRESS LIMITED
WARRANTIES 



Flextronics warrants that for a
period of thirteen (13) months from the date of shipment the Products will (a) be
manufactured in accordance with Customer’s applicable Specifications and will be free
from defects in workmanship, (b) consist of new materials (not used, recycled, except as
may be approved in advance by Customer, (c) be delivered to Customer free and clear of any
third party right. Materials are warranted to the same extent that the original
manufacturer warrants the Materials and Flextronics passes such warranties through to
Customer. This express limited warranty does not apply to (a) Materials consigned or
supplied by Customer to Flextronics; (b) defects resulting from Customer’s
Specifications or the design of the Products; and (c) Product that has been abused,
damaged, altered or misused by any person or entity after title passes to Customer. With
respect to first articles, prototypes, pre-production units, test units or other similar
Products, Flextronics makes no representations or warranties whatsoever. Notwithstanding
anything else in this Agreement or otherwise, Flextronics assumes no liability for or
obligation related to the performance, accuracy, Specifications, failure to meet
Specifications or defects of or due to tooling, designs or instructions produced or
supplied by Customer. Upon any failure of a Product to comply with the above warranty,
Flextronics’ sole obligation, and Customer’s sole remedy, is for Flextronics, at
its option, to promptly repair or replace such unit and return it to Customer freight
prepaid. Customer shall return Products covered by the warranty freight prepaid after
completing a failure report and obtaining a return material authorization number from
Flextronics to be displayed on the shipping container. Customer shall bear all of the
risk, and all costs and expenses, associated with Products that have been returned to
Flextronics for which there is no defect found. Customer will provide its own warranties
directly to any of its end users or other third parties. Customer will not pass through to
end users or other third parties the warranties made by Flextronics under this Agreement.
Furthermore, Customer will not make any representations to end users or other third
parties on behalf of Flextronics, and Customer will expressly indicate that the end users
and third parties must look solely to Customer in connection with any problems, warranty
claim or other matters concerning the Product. 



EXCEPT AS SPECIFICALLY SET FORTH
HEREIN, FLEXTRONICS MAKES NO OTHER WARRANTIES OR CONDITIONS ON THE PRODUCTS, EXPRESS,
IMPLIED, STATUTORY, OR IN ANY OTHER PROVISION OF THIS AGREEMENT OR COMMUNICATION WITH
CUSTOMER, AND FLEXTRONICS SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OR CONDITION OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 



     7.
          PAYMENT TERMS, ADDITIONAL COSTS AND PRICE CHANGES 



        7.1.
Price and Payment Terms. The price for Products to be manufactured will be
agreed by the parties and will be indicated on the purchase orders issued by Customer and
accepted by Flextronics. The initial price shall be as set forth on the Price List
attached hereto and incorporated herein as Exhibit D. The initial price for
Products should be reviewed on a quarterly basis by the Parties. Any changes and timing
of changes shall be agreed upon in writing by the Parties. All prices quoted are
exclusive of VAT and customs taxes and same shall be born by Customer. Any other tax,
cost or levy will be born by each Party according to applicable law. Payment for any
Products, services or other costs to be paid by Customer, expect as specified in Sections
3.2 and 3.3 hereinabove shall be due thirty (30) days from the end of the calendar month
on which invoice is issued. Customer agrees to pay one percent (1%) monthly interest on
all late payments (Including all payments set forth in Sections 3.3 and 3.2).  




10







        7.2.
Standard Cost. The Parties shall apply the following
          process for setting Standard Costs. “Standard Cost” shall be
          defined as the cost for components and materials based on supplier selling
          prices as mutually agreed between the Parties. Standard Costs shall be set for
          all Materials on a Quarterly basis. Standard Costs shall be fixed for each
          Quarter and shall be adjusted in each subsequent Quarter.  




Flextronics shall propose updated
Standard Costs to Customer in the first week of the last month of each Quarter which will
be calculated as an average of actual open purchase orders with suppliers for the
subsequent forty-five (45)-day period and be applied to the subsequent Quarter. Standard
Costs for each Quarter shall be mutually agreed between the Parties during the second week
of the last month in the Quarter. Product pricing for the next Quarter shall be based on
the new Standard Costs and shall become effective on the first day of the Quarter. 



In cases where the actual purchase
price of any Material exceeds the Standard Cost by more than US$* during the Quarter,
Flextronics shall contact Customer for written approval prior to the purchase of any such
Material. Customer shall respond to such purchase price variance (PPV) requests within two
(2) business days. Customer shall be deemed to have given its approval unless it delivers
Flextronics a clear written advise to the contrary within said period. Flextronics is
hereby granted a waiver from requesting written approval if the variant per order line is
less than US$*. 



        7.3.
Purchase Price Variance Reconciliation and Inventory           Revaluation.  




Adverse PPV is the responsibility of
Customer on these standards. 



There are two types of requests
Flextronics can ask for regarding price change: Temporary price change / fixed price
change. 



Temporary price change could be asked
for reasons like rescheduling delivery date, temporary allocation or other reasons, in
such cases where Customer approved the change, the Standard Cost will remain the same for
the next Quarter and Flextronics will debit Customer’s account for the difference in
price which will be paid within thirty (30) days from the end of the calendar month on
which an invoice therefore was issued. 



Fixed price change could be asked for
reasons like allocation market price change or other reasons, in such cases where Customer
approved the change, the Standard Cost will be changed in the next Quarter and Flextronics
will debit Customer’s account for the difference in price at the end of the Quarter.
The amount will be calculated as the quantity of parts consumed in last Quarter that were
purchased in increased price times the difference between the old price and the new price. 



An example for temporary price
change/fixed price change is attached hereto as Exhibit E. 



        7.4.
WIP & Finished Goods.  




At the end of each Quarter after the
new Standard Cost of each part was determined, a new price for the Product will be
calculated by Flextronics and presented to Customer. Those prices will take effect on the
first day of the following Quarter. 








* Omitted pursuant to a confidential
treatment request. The confidential portion has been filed separately with the SEC. 





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        7.5.
Additional Costs. Customer is responsible for (a) any and
          all expediting charges reasonably necessary because of a change in
          Customer’s requirements which charges are preapproved, (b) any overtime
          charges based on manpower tariffs approved in advance by Customer, incurred as
a           result of delays in the normal production or interruption in the workflow
          process caused by Customer’s change in the Specifications.  




     8.
          TERM AND TERMINATION 



        8.1.
Term. The term of this Agreement shall commence on the date
          hereof and shall continue for one (1) year thereafter (hereinafter “the
          initial term”) unless terminated as provided in Section 8.2 or 9 After
          the expiration of the initial term (unless this Agreement has been terminated
          earlier), this Agreement shall be automatically renewed for separate but
          successive one year terms.  




        8.2.
Termination. This Agreement may be terminated by (a)
          Flextronics for any reason subject to one hundred and eighty (180) days prior
          written notice to the Customer; (b) Customer for any reason subject to ninety
          (90) days prior written notice to Flextronics; (c) by either Party if the other
          party defaults in the performance of any material terms or conditions of this
          Agreement (including any delivery or payment obligation) and such default
          continues unremedied for a period of thirty (30) days after the delivery of
          written notice thereof by the terminating Party to the other Party; (d) as
          specifically provided in this Agreement, or (e) by either Party upon the other
          Party seeking an order for relief under the bankruptcy laws of the State of
          Israel or similar laws of any other jurisdiction, a composition with or
          assignment for the benefit of creditors, or dissolution or liquidation
          proceedings are initiated by or against the other party and not withdrawn
within           90 days or an attachment or similar encumbrance is levied over a
substantial           part of the other party’s assets and is not removed within 90
days.           Expiration or termination of this Agreement under any of the foregoing
          provisions shall not affect (i) the amounts due under this Agreement by either
          Party that exist on the date of expiration or termination, and as of such date
          onwards the provisions of Sections 3.2, 3.3, and 3.4 shall apply with respect
to           payment and shipment to Customer of finished Products, Inventory, and
Special           Inventory in existence as of such date. For the sake of clarity: upon
          termination, Flextronics will cease all Work and Customer shall thereupon pay
to           Flextronics all amounts stated in Section 7.1 for all completed Products and
as           provided in Section 3.3 for any and all semi-finished products, Inventory,
          Special Inventory and Excess Inventory; (ii) any obligation due by Flextronics
          for the delivery and warranty of any Product(s) ordered prior to termination of
          this Agreement even if delivery date and/or warranty period related to said
          Product(s) is due after the Experation or Termination date. Notwithstanding
          termination or expiration of this Agreement, Sections 3, 6, 7.1, 8, 9 and 10
          shall survive said termination or expiration, and (iii) Flextronics will return
          to Customer any property of Customer, including, but not limited to,
          demonstration equipment, Customer Tooling, Specifications, product and
technical           documentation, schematics, and all Confidential Information.  



12







     9.
          LIABILITY, LIMITATION 



        9.1.
Patents, Copyrights, Trade Secrets, Other Proprietary           Rights.
Customer shall defend and indemnify Flextronics from all           claims, liabilities,
costs, damages, judgments and reasonable attorney’s           fees (collectively,
“Losses”) resulting from or arising out of           any infringement or
other violation of any patents, patent rights, trademarks,           trademark rights,
trade names, trade name rights, copyrights, trade secrets,           proprietary rights
and processes or other such rights related to the Product or           claims relating to
Customer’s instructions, tooling, specifications and           designs (“Claims”)
provided that: (i) Flextronics will provide           the Customer with prompt written
notice of any Claim no later than 3 business           days following receipt of notice
by Flextronics; (ii) Flextronics will grant           Customer sole control of the
defense and settlement of Claims subject to any           reasonable request of
Flextronics and (iii) Flextronics will provide Customer           with reasonable
assistance, at Customer’s sole expense. Customer assumes no           liability for
any Claims made by any third party to the extent that such Claims           result from
the use of specifications other than the Specification, unaltered by
          Flextronics or anyone on its behalf. Customer may at its sole option either:
(1)           procure for Flextronics the right to continue to perform this Agreement;
(2)           modify the Specification so that there will no longer be an infringement or
          misappropriation or (3) terminate this Agreement and pay Flextronics the
          consideration due under this Agreement for the Work performed until the date of
          termination, including all payments set forth in Section 3.3. Provided, with
          respect to Losses (excluding costs and reasonable attorney’s fees)
          indemnity under this Section 9.1 will be available subject to judgment by a
          court, arbitrator or mediator or any other out of court settlement.  




        9.2.
          Flextronics shall defend and indemnify Customer from all Losses resulting from
          or arising out of any infringement or other violation of any patents, patent
          rights, trademarks, trademark rights, trade names, trade name rights,
          copyrights, trade secrets, proprietary rights and processes or other such
rights           as a result of the Work (including but not limited to manufacturing
methods           employed by Flextronics but excluding Claims as defined above)
          (“Manufacturing Claims”) provided that: (i) Customer will
          provide Flextronics with prompt written notice of any Manufacturing Claim no
          later than 3 business days following receipt of notice by Customer; (ii)
          Customer will grant Flextronics sole control of the defense and settlement of
          Manufacturing Claims subject to any reasonable request of Customer and (iii)
          Customer will provide Flextronics with reasonable assistance, at
          Flextronics’s sole expense. Flextronics may at its sole option either: (1)
          procure for Customer the right to continue to perform this Agreement; (2)
modify           its manufacturing methods so that there will no longer be an
infringement or           misappropriation or (3) terminate this Agreement and Section
8.2 shall apply.           Provided, with respect to Losses (excluding costsand
reasonable attorney’s           fees) indemnity under this Section 9.2 will be
available subject to judgment by           a court, arbitrator or mediator or any other
out of court settlement.  




        9.3.
THE FOREGOING STATES THE ENTIRE LIABILITY OF THE PARTIES TO EACH OTHER
          CONCERNING INFRINGEMENT OF PATENT, COPYRIGHT, TRADE SECRET OR OTHER
INTELLECTUAL           PROPERTY RIGHTS. 




        9.4.
No Other Liability. IN NO EVENT SHALL EITHER PARTY BE
          LIABLE TO THE OTHER FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE
          DAMAGES OF ANY KIND OR NATURE ARISING OUT OF THIS AGREEMENT OR THE SALE OF
          PRODUCTS, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT
          (INCLUDING THE POSSIBILITY OF NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE,
          EVEN IF THE PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY SUCH LOSS OR
DAMAGE,           AND EVEN IF ANY OF THE LIMITED REMEDIES IN THIS AGREEMENT FAIL OF THEIR
          ESSENTIAL PURPOSE. 



13







CONFIDENTIALITY 



        9.5.
Non-Disclosure of Confidential Information. Except to the
          extent expressly authorized by this Agreement or otherwise agreed in writing by
          the Parties, each Party agrees that, during the term of this Agreement and for
          five (5) years thereafter, it shall keep confidential and shall not publish or
          otherwise disclose and shall not use for any purpose other than as provided for
          in this Agreement, all Confidential Information furnished to it by the other
          Party pursuant to this Agreement unless the receiving party can demonstrate
that           such Confidential Information: (a) was already known to the receiving
Party,           other than under an obligation of confidentiality, at the time of
disclosure by           the other Party; (b) was generally available to the public or
otherwise part of           the public domain at the time of its disclosure to the
receiving Party; (c)           became generally available to the public or otherwise part
of the public domain           after its disclosure and other than through any act or
omission of the receiving           Party in breach of this Agreement; (d) was disclosed
to the receiving Party by a           third party without obligations of confidentiality
with respect thereto; or (e)           was independently discovered or developed by the
receiving Party without the use           of or access to Confidential Information
belonging to the disclosing Party by           persons who had no knowledge of or access
to Confidential Information.  




        9.6.
Authorized Disclosures. Each Party may disclose
          Confidential Information belonging to the other Party to the extent such
          disclosure is reasonably necessary in the following situations: (a) for the
          purpose of complying with applicable law, including without limitation the
rules           and regulations of the Securities and Exchange Commission or other
relevant           securities authority; (b) prosecuting or defending litigation; and (c)
complying           with applicable governmental regulations, provided, however, that the
receiving           Party gives the disclosing Party prompt notice thereof so that the
disclosing           Party may seek a protective order or other appropriate remedy, and
further           provided, that in the event that such protective order or other remedy
is not           obtained, the receiving Party shall furnish only that portion of the
          Confidential Information which is legally required, and shall exercise all
          efforts required to obtain confidential treatment for such information.
          Notwithstanding the foregoing, in the event a Party is required to make a
          disclosure of the other Party’s Confidential Information pursuant to this
          sub-sections (a) or (b), it will, except where impracticable, give reasonable
          advance notice to the other Party of such disclosure.  




        9.7.
Employees; Agents. The receiving Party undertakes to
          disclose the Confidential Information only to those of its employees who have
to           be so informed in order to ensure its proper evaluation, and provided, that
such           employees are bound by written confidentiality and non-use undertakings
towards           the receiving Party which also apply to the Confidential Information
disclosed           to the receiving Party under this Agreement. The receiving Party will
be           responsible for ensuring that the obligations of confidentiality and non-use
          contained herein are observed by all such employees, and it represents that it
          has instituted policies and procedures which provide such adequate protection
          for the Confidential Information. The receiving Party shall bear full
          responsibility for any harm caused to the disclosing Party by disclosure to
said           employees.  



14







     10.
          MISCELLANEOUS 



        10.1.
Entire Agreement. This Agreement constitutes the entire
          agreement between the Parties with respect to the transactions contemplated
          hereby and supersedes all prior agreements and understandings between the
          Parties relating to such transactions. In all respects, this Agreement shall
          govern and supersedes any other documents related to the Work contemplated
          herein including, without limitation, preprinted terms and conditions on
          Customer’s purchase orders and these shall be of no force and effect.  




        10.2.
Amendments, Schedules and Appendices. This Agreement may be
          amended only by written consent of both parties. Each Schedule and Appendix
          hereto is incorporated herein by this reference. The parties may amend any
          Schedule and Appendix from time to time by entering into a separate written
          agreement, referencing such Schedule and Appendix and specifying the amendment
          thereto, signed by an authorized representative of each of the parties.  




        10.3.
Independent Contractor. Neither party shall, for any
          purpose, be deemed to be an agent of the other party and the relationship
          between the parties shall only be that of independent contractors. Neither
party           shall have any right or authority to assume or create any obligations or
to make           any representations or warranties on behalf of any other party, whether
express           or implied, or to bind the other party in any respect whatsoever.  




        10.4.
Insurance. Flextronics and Customer agree to maintain
          appropriate insurance to cover their respective risks under this Agreement with
          coverage amounts commensurate with levels in their respective markets. Customer
          specifically agrees to maintain insurance coverage for any finished Products or
          Materials the title and risk of loss of which passes to Customer pursuant to
          this Agreement and which is stored on the premises of Flextronics.  




        10.5.
Force Majeure. In the event that either party is prevented
          from performing or is unable to perform any of its obligations under this
          Agreement (other than a payment obligation) due to any Act of God, fire,
          casualty, flood, earthquake, war, strike, lockout, epidemic, destruction of
          production facilities, riot, insurrection, or any other cause unknown to the
          Parties at the execution of this Agreement which is beyond the reasonable
          control of the party invoking this section, and if such party shall have used
          its commercially reasonable efforts to mitigate its effects, inter alia as part
          of DRP (Disaster Recovery Plan) program, such Party shall give prompt written
          notice to the other Party regarding the circumstances surrounding such
          preventing event, its performance shall be excused, and the time for the
          performance shall be extended for the period of delay or inability to perform
          due to such occurrences. Regardless of the excuse of Force Majeure, if such
          Party is not able to perform within ninety (90) days after such event, the
other           Party may terminate the Agreement. Notwithstanding anything to the
contrary           herein or otherwise, neither party may rely on the aforesaid
provisions or on           any force majeure circumstance applicable by law as an excuse
for non-payment.  




        10.6.
Successors, Assignment. This Agreements shall be binding
          upon and inure to the benefit of the Parties hereto and their respective
          successors, assigns and legal representatives. Neither Party shall have the
          right to assign or otherwise transfer its rights or obligations under this
          Agreement except with the prior written consent of the other party, not to be
          unreasonably withheld. Notwithstanding the foregoing, Customer shall be
entitled           to transfer and/or assign this Agreement to any company controlling
Customer           (directly or indirectly), controlled by Customer or any affiliate of
of           Customer, subject to a 30 days prior written notification to Flextronics and
          provided that in such event Flextronics shall be entitled to assign this
          Agreement to Flextronics Inc.  



15







        10.7.
Notices. All notices required or permitted under this
          Agreement will be in writing and will be deemed received (a) when delivered
          personally; (b) when sent by facsimile, evidenced by a written confirmation;
(c)           five (5) days after having been sent by registered or certified mail,
return           receipt requested, postage prepaid; or (d) two (2) days after deposit
with a           commercial overnight carrier. All communications will be sent to the
addresses           set forth above or to such other address as may be designated by a
party by           giving written notice to the other Party pursuant to this section.  




        10.8.
Set-off; Lien. Amounts due hereunder may not be set off
          except with mutual prior written consent. It is specifically agreed that
          Flextronics shall not have any lien or any other similar right upon any
          Confidential Information, Costumer’s IP and IP Enhancements and
Flextronics           hereby expressly waives any claim or demand to that effect.  




        10.9.
          This Agreement may be executed in any number of counterparts, each of which
          shall be deemed to be an original instrument and all of which together shall
          constitute a single agreement.  




        10.10.
Disputes Resolution 




    (i)        Any
dispute arising out of or relating to this Agreement or the breach,           termination
or validity thereof shall be exclusively settled in arbitration in           accordance
with substantial Israeli law. The arbitrator shall be agreed upon by           the
Parties and in the absence of an agreement within 21 days from the first
          written notice by a Party to the other Party of its determination to apply to
          arbitration, as shall be determined by the President of the Israeli Bar at the
          request of any party hereof.  



    (ii)        Without
derogating from rights of termination as detailed in this Agreement, it           is
clarified that Flextronics will continue to provide the Work and Customer           shall
continue to perform its obligations hereunder during any arbitration or           legal
proceedings commenced pursuant to this Section 11.10(i) above and the           existence
of a dispute shall not enable Flextronics to stop the Work or services           or
otherwise not timely perform its obligations or enable Customer to stop
          payments or otherwise not timely perform its obligations, except that
          Flextronics shall be entitled to demand appropriate securities, such as bank
          guarantees and pre-payments as a condition to the continued performance thereby
          of any further Work, unless otherwise determined by the Arbitrator.  



    (iii)        The
foregoing shall not affect the right of the parties to seek injunctions           before
the competent Court.  



        10.11.
Law and Jurisdiction. This Agreement shall be governed by
          and construed in accordance with the laws of the state of Israel, without
giving           effect to choice of law rules. Section 11.10(i) shall not apply to
disputes as           to: (a) a breach of confidentiality obligations under this
Agreement;  




        10.12.
Even-Handed Construction. The terms and conditions as set
          forth in this Agreement have been arrived at after mutual negotiation, and it
is           the intention of the parties that its terms and conditions not be construed
          against any party merely because it was prepared by one of the parties.  



16







        10.13.
Controlling Language. This Agreement is in English only,
          which language shall be controlling in all respects. All documents exchanged
          under this Agreement shall be in English.  




AGREED TO: 




	Allot Communications Ltd. 



By:      /s/ Pini Gvili  /     /s/ Doron Faibish 
——————————————————

VP Operations  /  General Counsel 
——————————————————		Flextronics (Israel) Ltd.



By:      /s/  Eli Kalif /     /s/ Tzahi Rodrig
——————————————————

CFO / CEO 
——————————————————










17