EX-10.17



 







Exhibit 10.17




Addendum to Escrow Agreement



This
Addendum to Escrow Agreement (this “Addendum”) is
entered into as of October 26, 2006 (the
“Effective Date”), by and between Allot Communications Ltd. (the “Company”) and Yigal Jacoby
(“Jacoby”, and together with the Company, the “Parties”).



WHEREAS the Parties hereto are parties to that certain Escrow Agreement of January 1998 attached
hereto as Schedule A (the “Agreement”), pursuant to which Jacoby was entitled to purchase
1,083,568 Ordinary Shares of the Company (the “Jacoby Ordinary Shares”); and



WHEREAS the shareholders of the Company, in their resolution of April 2002, resolved to convert the
Jacoby Ordinary Shares into Series A Preferred Shares, and accordingly, Jacoby is entitled to
purchase 1,083,568 Series A Preferred Shares of the Company par value NIS0.01 each (the “Jacoby
Shares”); and



WHEREAS the Parties wish to add to the terms of the Agreement, so as to allow Jacoby to pay the
Purchase Price (as defined therein) in part and also by way of a net payment, and to amend the
terms pertaining to the termination of Jacoby’s right to purchase the Jacoby Shares, all as
described herein;



NOW, THEREFORE, the Parties hereto hereby agree as follows:





	 	1.	 	Unless defined otherwise, capitalized terms shall have the meanings set forth in the
Agreement.
	 
	 	2.	 	Notwithstanding anything to the contrary stated in the Agreement, Jacoby shall be
entitled to pay any portion of the Purchase Price in cash from time to time and to receive
from the Escrow Agent the respective number of the Jacoby Shares, and shall not be
restricted to the payment in full of the Purchase Price.
	 
	 	3.	 	Notwithstanding anything to the contrary stated in the Agreement, including without
limitation Section 4 thereto, Jacoby shall be entitled to exercise the right to purchase the
Jacoby Shares until the earlier of: (i) a date that is two years following the closing of an
initial public offering of the Company’s securities (“IPO”), and (ii) the consummation of
any event other than an IPO which is deemed a “Liquidity Event”, as such term is defined in
the Agreement (each, the “Expiration Date”).
	 
	 	4.	 	Without derogating from anything contained in the Agreement, Jacoby shall also be
entitled to pay the Purchase Price or any portion thereof as follows:
	 
	 	 	 	In the event of a Liquidity Event and at any time following an IPO, in lieu of the payment
in cash of the Purchase Price (in full or in part) by Jacoby, Jacoby may also elect to
receive such number of shares out of the Jacoby Shares the value of which is equal to the
excess of the total value of the number of the Jacoby Shares with respect to which such
election is made over the relative portion of Purchase Price applicable to such number of
Jacoby Shares in accordance with the formula below (the “Net Payment”). If the Net Payment
is in the context of a Liquidity Event (other than an IPO) that occurs prior to an IPO then
the Net Payment may be effected only contingent upon the actual closing of such Liquidity
Event. If Jacoby elects to effect a Net Payment as provided in this Section 4, then Jacoby
shall provide the Company with a written notice to that effect and the Company shall
instruct the Escrow Agent to transfer to Jacoby the number of shares out of the Jacoby
Shares computed using the following formula:





	 	 	 	 	 	 	 	 	 	 	 	 
	 	X
= Y .

	 	(

	 	A – B
	 	)

	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	A
	 	 	 	 











 









 











Where:


X = the number of shares out of the Jacoby Shares to be transferred to Jacoby upon effecting
a Net Payment under this Section 4.




Y = the number of Jacoby Shares covered by the Agreement in respect of which the Net Payment
election is made.




A = the Fair Market Value (as defined below) of one Jacoby Share.




B = the respective portion of the Purchase Price payable with respect to one Jacoby Share
(less the previously paid par value on account of such Jacoby Share).



“Fair Market Value” shall mean:





	 	4.1.	 	If the Net Payment is effected at the date of a Liquidity Event then the price
per share of the class of a Jacoby Share determined for purposes of such Liquidity
Event (and in case of an IPO, the public offering price (before deduction of
underwriters’ discounts, commissions or expenses) in the IPO);
	 
	 	4.2.	 	If traded on a securities exchange or the Nasdaq Global Market, the fair market
value shall be deemed to be the average of the closing or last reported sale prices of
the ordinary shares of the Company on such exchange or market over a period of five
trading days ending five trading days prior to the date of the Net Payment;
	 
	 	4.3.	 	If otherwise traded in an over-the-counter market, the fair market value shall
be deemed to be the average of the closing ask prices of the ordinary shares over a
period of five trading days ending five trading days prior to the date of the Net
Payment; and
	 
	 	4.4.	 	If any of the provisions of 4.1-4.3 do not apply, then the Fair Market Value
shall be determined in good faith by the Company’s Board of Directors.






	5.	 	All Jacoby Shares held by the Escrow Agent with respect to which no Payment was made
prior to the Expiration Date or with respect to which Net Payment election was made shall be
automatically forfeited by the Company upon the Expiration Date or the effective date of the
Net Payment election, as the case may be, without payment of any consideration or the need
of any further notice or corporate action of any kind and the Escrow Agent shall transfer
these Jacoby Shares to the Company promptly upon written request by the Company.
	 
	6.	 	This Agreement will become effective as of the Effective Date (subject to approval by the
Board of Directors and shareholders of the Company), provided that Section 3 shall become
effective only as of the closing of an IPO. Except as expressly stated herein, all terms and
conditions of the Agreement shall remain in full force and effect.




IN WITNESS WHEREOF, the parties have signed this Addendum at the date set forth above.




	 	 	 	 	 	 	 	 	 
	/s/ Adi Sapir	 	 	 	/s/ Yigal Jacoby	 	 
	 	 	 	 	 	 	 
	Allot Communications Ltd.	 	 	 	Yigal Jacoby	 	 
	By:
	 	Adi Sapir	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Title:
	 	CFO	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	We acknowledge and agree to the aforesaid Addendum:
	 
	/s/ Ori Rosen	 	 	 	 	 	 
	 	 	 	 	 	 	 
	ORO Trust Company Ltd.