exv10w1



 





Exhibit 10.1




Credit Facility Agreement

Regarding an Umbrella Facility in the amount of

EUR 15.000.000,—

dated 10.10.2007




Deutsche Bank AG

Filiale Deutschlandgeschäft

Koblenzer Straße 7, 57072 Siegen




	 	 	 
	 

	 	(the “Bank”)






and




IPG Laser GmbH

Siemensstraße 7, 57299 Burbach




	 	 	 
	 

	 	(the “Borrower”)





enter into the following agreement (the “Credit Facility Agreement”), pursuant to which the Bank
makes available a revolving credit facility to the Borrower (the “Credit Facility”) on the basis
of the General Business Conditions of the Bank (Allgemeine Geschäftsbedingungen):




§ 1 — PARTIES




	 	 	 
	Borrower:

	 	IPG Laser GmbH
	 
	 	 
	Bank:

	 	Deutsche Bank AG, Filiale Deutschlandgeschäft, Siegen






§ 2 — Credit Facility:




	 	 	 
	(1)

	 	Aggregate Facility Amount
	 
	 	 
	 

	 	The Bank makes available to the Borrower the Credit Facility in the amount of EUR
15.000.000,— (in words: Euro fifteenmillion) (“Aggregate Facility Amount”).
	 
	 	 
	 

	 	The Credit Facility may be utilized through the following partial credit facilities:
	 
	 	 
	 

	 	1) Cash Credit Facility €14.000.000,— (in words: Euro fourteenmillion)
	 
	 	 
	 

	 	2) Guarantee Facility €1.000.000,— (in words: Euro onemillion)
	 
	 	 
	(2)

	 	Term of the Credit Facility
	 
	 	 
	 

	 	The Credit Facility is available until June 30, 2010.
	 
	 	 
	(3)

	 	Purpose
	 
	 	 
	 

	 	The proceeds of the Credit Facility will only be used for general working capital financing
purposes / short-term general corporate purposes / regular business activities especially
the financing of the outstanding debts and inventories of the Borrower and — in accordance
with Clause 4 — the companies the Borrower directly or indirectly holds the majority of
shares in regarding section 16 German Stock Corporation Act (Aktiengesetz) (“Affiliated
Companies”). The use of this Credit






 









 






	 	 	 
	 

	 	Facility for acquisitions irrespective of form, duration and amount will require the prior
consent of the Bank.






	 	 	 
	(4)

	 	Remaining obligation
	 
	 	 
	 

	 	The obligations of the Borrower under this Agreement will not end upon expiration or
termination of this Credit Facility Agreement but shall remain in full force and effect
until all amounts payable to the Bank under this Credit Facility Agreement, including,
without limitation, interest and all fees, have been conclusively repaid.
	 
	 	 
	(5)

	 	Definitions
	 
	 	 
	 

	 	In this Credit Facility Agreement the following words and terms are defined as
specified below:
	 
	 	 
	 

	 	“Banking Day” means a day (other than a Saturday or Sunday) on which banks are open for
general business in Siegen.
	 
	 	 
	 

	 	“EONIA” means the Euro OverNight Index Average as determined by the European Central Bank
for each TARGET-day. On days which are not a TARGET-day the EONIA as determined on the
immediately preceding TARGET-day shall apply. If no EONIA is available on a TARGET-day
the Bank will determine the applicable reference interest rate in accordance with
section 315 German Civil Code (BGB) on the basis of the quotations for overnight funds
in the European interbank market.
	 
	 	 
	 

	 	“EURIBOR” means the interest rate per annum for deposits in Euro for the relevant
interest period displayed on page 248 of the Telerate screen or a respective succeeding
screen replacing page 248 for 11.00 a.m. Brussels time two TARGET-days prior to the
disbursement/the commencement of the respective interest period. If the EURIBOR cannot be
determined two TARGET-days prior to the first interest period, the Bank and the Borrower
will negotiate the interest rate for the relevant interest period. The Bank is not obligated
to disburse the loan unless an agreement about the applicable interest rate has been
reached. The Bank is released from its obligation to disburse the loan if an agreement about
the applicable interest rate is not reached within 15 days. If the EURIBOR for an interest
period following the first interest period cannot be determined the Bank will determine the
applicable interest rate for the relevant interest period based on interest rates customary
in the interbank market for the particular interest period plus agreed margin.
	 
	 	 
	 

	 	“Financial Indebtedness” means any indebtedness for or in respect of (i) moneys borrowed,
(ii) any amount raised by acceptance under any acceptance credit facility or dematerialised
equivalent, (iii) any amount raised pursuant to any note purchase facility or the issue of
bonds, notes, debentures, loan stock or any similar instrument, (iv) the amount of any
liability in respect of any lease or hire purchase contract which would, in accordance with
GAAP, be treated as a finance or capital lease, (v) receivables sold or discounted (other
than any receivables to the extent they are sold on a non-recourse basis), (vi) any amount
raised under any other transaction (including any forward sale or purchase agreement) having
the commercial effect of a borrowing, (vii) any derivative transaction entered into in
connection with protection against or benefit from fluctuation in any rate or price (and,
when calculating the value of any derivative transaction, only the marked to market value
shall be taken into account), (viii) any counter-indemnity obligation in respect of a
guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument
issued by a bank or financial institution; and (ix) the amount of any liability in respect
of any guarantee or indemnity for any of the items referred to in paragraphs (i) to (viii)
above, (x) a guarantee, surety






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	 	or other obligation for any of the obligations listed in paragraphs (i) to (ix), and (xi)
provisions for pension obligations.
	 
	 

	 	“TARGET-day” is any day on which the Trans-European Automated Real Time Gross Settlement
Express Transfer System is open for the settlement of payments in Euro.






§ 3 — Utilization of the Cash Credit Facility




	 	 	 
	Availability
Cash 
Credit Facility:

	 	The Credit Facility may be utilized up to a maximum aggregate
amount of the Cash Credit Facility through:






	 	 	 	 	 
	Cash Credit

	 	–
	 	Current account cash advances in Euro (“Cash Credit”).
	 
	 	 	 	 
	Fixed-Interest Loan

	 	–
	 	Short-term loans with fixed interest rates in Euro with
credit periods of 1, 2, 3 or 6 months (“Fixed-Interest
Loans”) as agreed upon on a case by case basis. The minimum
amount for a utilization by way of Fixed-Interest Loan is
Euro 250.000,—.
	 
	 	 	 	 
	EURIBOR-Credit

	 	–
	 	Loans with fixed interest-rates in Euro on the basis of
EURIBOR with interest periods of 1, 2, 3 or 6 months
(“Interest Periods”), however not exceeding the Maturity Date
(“EURIBOR-Credit”), after a drawdown notice by the Borrower
no later than 10:00 a.m. Frankfurt time on the second
Business Day prior to the day, on which payment shall be made
or a new Interest Period would commence. The minimum amount
for a utilization by way of EURIBOR-Credit is Euro
250.000,—.






	 	 	 
	 

	 	Each drawdown notice must specify the designated amount of
the utilization and the duration of the Interest Period
chosen and shall be irrevocable. Business Day is any day
(except Saturdays and Sundays) on which banks are open for
general business in Cologne, Germany.
	 
	 	 
	 

	 	If the Interest Period does not end on a Business Day, the
Interest Period is extended to the following Business Day,
unless this day falls within the next calendar month. In this
case the Interest Period ends on the immediate previous
Business Day.
	 
	 	 
	Utilization in foreign currency

	 	All afore mentioned utilizations – except EURIBOR-Credit –
may be made in foreign currency, namely in US Dollar,
japanese Yen, “Schweizer Franken”, Pound Sterling or with
prior consent of the Bank in every other currency which is
freely available, convertible and transferable in the
European interbank market.






§ 4 — Utilization of the Guarantee Facility




	 	 	 
	Guarantee Facility

	 	The Guarantee Facility may be
utilized through indemnities and
bank guarantees issued upon
instructions of the Borrower, which
can also be issued denominated in
foreign currency on a case by case
basis. The Borrower shall give the
instruction to issue a bank
guarantee using the wording in each
case prepared by the Bank.






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	Conditions for Guarantees:

	 	Each utilization of the Credit
Facility by way of bank guarantee is
subject to the Conditions for
Guarantees of the Bank, which take
priority over the General Business
Conditions of the Bank.
	 
	 	 
	Duration of Bank Guarantees:

	 	Each bank guarantee issued shall
have a limited contractual term not
exceeding 3 years. If a limited
contractual term can not be agreed
upon, the economical lifetime (until
the expected expiration of the bank
guarantee issued) shall not exceed 3
years.
	 
	 	 
	Conditional Acceptance:

	 	Before accepting an instruction to
issue a bank guarantee the Bank is
entitled to consider such
instruction with respect to its
feasability under legal, economical
and policy aspects.
	 
	 	 
	Utilization in foreign currency

	 	 All afore mentioned utilizations may
be made in foreign currency, namely
in US Dollar, japanese Yen,
“Schweizer Franken”, Pound Sterling
or with prior consent of the Bank in
every other currency which is freely
available, convertible and
transferable in the European
interbank market.






§ 5 — Utilisation of the Credit Facility by Affiliated Companies





	(1)	 	Affiliated Companies may – only by written request of the Borrower delivered to the Bank -
utilise the Cash Credit Facility by way of separate cash credit facilities under the Guarantee
of the Borrower according to Annex 1 (“Corporate Guarantee”) to the Credit Facility Agreement
with branches and/ or subsidiaries of the Bank in Germany or abroad (each a “Lending Office”).
The respective Affiliated Company has to maintain a legally binding relationship with the
Lending Office before and during such utilisation.






	(2)	 	The utilisation by Affiliated Companies as mentioned in Clause 5 (1) will be based upon
separate facility agreements with each Lending Office and will be counted as utilisation of
the Cash Credit Facility. For avoidance of doubt it shall be deemed to be agreed, that no
Lending Office shall be obliged to enter into a facility agreement with an Affiliated Company.






	(3)	 	The allotment of the Cash Credit Facility to Affiliated Companies each time is to be seen in
Enclosure 1 to the Corporate Guarantee. If there is need to change the allotment of the Cash
Credit Facility to Affiliated Companies only Enclosure 1 to the Corporate Guarantee shall be
amended; in this case the regulations in this Credit Facility Agreement shall remain
unaffected.





§ 6 — Repayment





	(1)	 	The Borrower shall repay all amounts outstanding under the Facility in full at latest upon
termination of the Credit Facility Agreement unless otherwise agreed.






	(2)	 	If after the termination of the Guarantee Facility bank guarantees issued are outstanding and
the collateral provided to the Bank does not cover the full amount of any risk resulting from
such guarantees, the Borrower shall procure that the Bank be released within a reasonable
period of time of its obligations under such bank guarantees. The Borrower is entitled to
provide the Bank instead with security by pledge of an amount in cash and in the corresponding
currency of the bank guarantees issued. Section 10 of the Conditions for Guarantees remains
unaffected.




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§ 7 — Rates of Interest / Fees




	 	 	 	 	 
	(1)	 	General
	 
	 	 	 	 
	 

	 	(a)
	 	Authorization for debiting
	 
	 	 	 	 
	 

	 	 	 	The Bank is entitled to debit due interest, commission, remuneration and fees to the
account No 460 0280255 of the Borrower unless otherwise agreed.
	 
	 	 	 	 
	 

	 	(b)
	 	Arrangement Fee
	 
	 	 	 	 
	 

	 	 	 	For the efforts of the Bank in connection with the arrangement of this Credit
Facility the Bank charges a flat fee in the amount of Euro 5.000,—. The arrangement
fee will become due upon effectiveness of the Credit Facility Agreement.






	 	 	 	 	 
	(2)	 	Cash Credit Facility
	 
	 	 	 	 
	 

	 	(a)
	 	Interest rate for current account cash advances
	 
	 	 	 	 
	 

	 	 	 	The rate of interest for current account cash advances in Euro is the percentage
rate per annum which is the sum of the monthly EONIA-average rate and the margin.
	 
	 	 	 	 
	 

	 	 	 	The margin is 1,5 % p.a..
	 
	 	 	 	 
	 

	 	 	 	Interest will be calculated on the basis 30/360. Amounts will be debited monthly in
arrears and upon termination of the Credit Facility Agreement.
	 
	 	 	 	 
	 

	 	 	 	The monthly EONIA-average rate is the interest rate as determined by the Bank at the
end of each month for that respective month as the monthly average of the European
Over-Night Indexed Average.
	 
	 	 	 	 
	 

	 	(b)
	 	Interest for Fixed Interest Loans
	 
	 	 	 	 
	 

	 	 	 	The Interest rate for Fixed-Interest Loans and the settlement of the interest will
be determined in each individual case beforehand and by mutual consent.
	 
	 	 	 	 
	 

	 	(c)
	 	Interest for EURIBOR-Credit
	 
	 	 	 	 
	 

	 	 	 	For EURIBOR-Credit in Euro the Bank charges interest to the Borrower within the
agreed upon Interest Period in the amount of the relevant EURIBOR plus margin of 1,0
% p.a. of the respective utilization. Interest are due at the end of the respective
Interest Period and will be calculated by calendar days on the basis of actual / 360
days.
	 
	 	 	 	 
	 

	 	 	 	EURIBOR is the interest rate for utilization in Euro for a respective period as
published of the Telerate page 248 or a respective succeeding page which takes the
place of page 248, for 11.00 a.m. Brussels time, on the second TARGET-Day prior to
the payment / the commencement of the next Interest Period. TARGET-Day is each day,
on which payments in Euro are processed in the Trans-European Automated Real Time
Gross Settlement Express Transfer System.
	 
	 	 	 	 
	 

	 	 	 	In case the EURIBOR can not be determined two TARGET-Days prior to the commencement
of the first Interest Period, the Bank and the Borrower will negotiate an interest
rate for the first Interest Period. Until an interest rate is agreed upon the Bank
is not obliged to make any payments. If the parties do not come to an agreement
within 15 days, the Bank is released from the obligation to make payments. In case
the EURIBOR can not be determined






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	 	 	 	two TARGET-Days prior to the commencement of the Interest Periods following
the first Interest Period, the Bank will charge the Borrower for the respective
Interest Period interest as customary in the market plus the margin as agreed.
	 
	 	 	 	 
	 

	 	(d)
	 	Utilization in foreign currency
	 
	 	 	 	 
	 

	 	 	 	The Interest rate for utilization in foreign currencies and the settlement of the
interest will be determined in each individual case beforehand and by mutual
consent.






	 	 	 	 	 
	(3)	 	Guarantee Facility
	 
	 	 	 	 
	 

	 	(a)
	 	Commission on Bank Guarantees:
	 
	 	 	 	 
	 

	 	 	 	Unless otherwise determined beforehand for a certain bank guarantee the commission
on bank guarantees is 1,0 % p.a., minimum Euro 250,— p.a. (respectively Euro 75,—
every quarter) until further notice.
	 
	 	 	 	 
	 

	 	 	 	The commission on bank guarantees shall be calculated for each year or part thereof
commenced and become due and payable in advance.
	 
	 	 	 	 
	 

	 	(b)
	 	Fee for the Issuance of Bank Guarantees:
	 
	 	 	 	 
	 

	 	 	 	The Borrower shall pay a fee for each issuance of a bank guarantee (as well as for
any amendment thereafter). The fee is Euro 100,— for each bank guarantee drafted by
the Bank and Euro 150,— for each bank guarantee drafted by third parties / agreed
upon separately. The fee is due and payable upon the issuance of the respective bank
guarantee.
	 
	 	 	 	 
	 

	 	(c)
	 	Remuneration for Special Services on Bank Guarantees:
	 
	 	 	 	 
	 

	 	 	 	The Bank is entitled to further remuneration for services rendered which exceed the
standard handling (starting with the instruction of the Borrower until the discharge
of the bank guarantee issued) of a bank guarantee issued (e.g. wordings of bank
guarantees which require a particular perusal or litigious demands under a bank
guarantee issued).The remuneration is calculated by the Bank on the basis of the
actual expenditure of time and manpower.






§ 8 — Collateral



The following collateral, in addition to existing collateral if applicable, shall be provided by
the Borrower:





An individual Corporate guarantee by IPG Photonics Corporation, Oxford, MA 01540,
USA, in form and content satisfactory to the Bank.




Details, especially regarding the purpose of the collateral, are subject to separate
agreements, which respectively will be entered into.



§ 9 — Conditions Precedent




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The Borrower may only utilize this Credit Facility once and so long as the following Conditions
Precedent are fulfilled:




	 	 	 	 	 
	(1)	 	The Bank has received the following documents from the Borrower:
	 
	 	 	 	 
	 

	 	-
	 	Actual extract from the Commercial Register;
	 
	 	 	 	 
	 

	 	-
	 	Articles of association incorporating all amendments if any;
	 
	 	 	 	 
	 

	 	-
	 	Board resolution authorizing the directors of the Borrower to sign the Credit
Facility Agreement on behalf of the Borrower according to the company documents if
required;
	 
	 	 	 	 
	 

	 	-
	 	3 year forecast for the group and the borrower (each in content and credit
assessment satisfactory to the bank);
	 
	 	 	 	 
	 

	 	-
	 	actual table of remaining line-of-credit facilities of the group (amount,
maturity, purpose, collateralization).
	 
	 	 	 	 
	(2)	 	The agreed collateral is in full force and effect;
	 
	 	 	 	 
	(3)	 	No event of default has occurred on the date of the utilization which gives the Bank the
right to terminate this Credit Facility at any time without notice or which gives the Bank the
right to terminate this Credit Facility after setting of a deadline and/or warning;
	 
	 	 	 	 
	(4)	 	The Borrower is not in default with any obligation vis-à-vis the Bank.





The Bank is entitled to allow utilization without the conditions precedent being fulfilled. The
obligation of the Borrower to comply with the conditions precedent remains unaffected hereby unless
the Bank has waived definitively and expressly the compliance with certain conditions precedent.




§ 10 — General Undertakings



Until all liabilities under this Credit Facility Agreement have been fully and finally discharged
the Borrower undertakes the following obligations:




	 	 	 	 	 
	(1)	 	Information
	 
	 	 	 	 
	 	 	The Borrower undertakes to keep the Bank always informed of the current economic
conditions of the Borrower and, as the case may be, the current economic conditions of
the Borrower’s group of companies.
	 
	 	 	 	 
	 	 	For this purpose the Borrower will, in particular, without prior request
immediately upon completion and in any event within 6 months after the end of each of
its financial years provide the Bank with
	 
	 	 	 	 
	 

	 	-
	 	an original of its audited financial statement, at least with the content
required by law, including notes and management report;
	 
	 	 	 	 
	 

	 	-
	 	the audited consolidated financial statement (consolidated balance sheet,
consolidated statement of income and notes) together with the group management report
of the Borrower’s group of companies including the respective auditor’s reports.
	 
	 	 	 	 
	 	 	Furthermore, the Borrower will provide the Bank with quarterly reports including lists of the
places of businesses, undertakings, product areas, trade receivables from third
parties, inventory, report on the development of the financial condition, status
report, gap analysis of IPG Photonics Corp. and IPG Laser GmbH.











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	 	The Borrower will provide further documents which deliver insight into the economic
conditions on demand. The Borrower will inform the Bank immediately in case material
changes or divergences in regard to the information given or documents handed over
(including plannings and predictions) occur or in case there is evidence to indicate
that information given or documents handed over are incomplete or incorrect.
	 
	 	 
	(2)

	 	Purpose
	 
	 	 
	 

	 	The Borrower undertakes to verify to the Bank on demand, also repeatedly, by
appropriate documents that the Facility has been used for the agreed purpose. The Bank
is not obligated to the Borrower to verify that the Facility has been used for the
agreed purpose.
	 
	 	 
	(3)

	 	Pari Passu / Negative Pledge
	 
	 	 
	 

	 	Until all liabilities under this Credit Facility Agreement have been discharged the
Borrower undertakes the following obligations:
	 
	 	 
	 

	 	The Borrower undertakes not to provide or permit Affiliated Companies, its
shareholders or any other person to provide any collateral to third parties for similar
credit facilities (regarding terms of, e.g. the amount, period, tenor and purpose) of
the Borrower, his direct and indirect partners or affiliated Companies and not to incur
or let incur any liabilities which require the provision of any collateral of any kind
for such credit facility to third parties without allowing the Bank to participate
before or at the same time and in the same rank in this collateral or providing the
Bank with equal collateral (Pari Passu).
	 
	 	 
	 

	 	Exception is made for







	 	•	 	all existing collateralized credit facilities and loans of the Borrower
(collateralized by e.g. mortgages) as mentioned in Annex 2 which is an integral part of
the credit agreement,
	 
	 	•	 	not similar credit facilities as long-term-loans (with a term of 4 years or more)
for capital expenditures for example,
	 
	 	•	 	liens securing new indebtedness not in excess of Euro 1,5 million on a cumulated
basis and
	 
	 	•	 	supplier’s collateral as common in trade or industry (e.g. purchase money debt) and
banking collateral as required by banks  ́ General Business Conditions.





	 	 	 
	(4)

	 	Ownership / Change of control
	 
	 	 
	 

	 	The Borrower undertakes to procure that the current ownership in the Borrower, on which the
willingness of the Bank to grant the Credit Facility and to permit all utilization
hereunder is based, will remain unchanged. If a change in the current ownership / change of
control occurs, the parties will reach an agreement satisfactory to both sides on the
continuation of the Credit Facility Agreement on changed terms and conditions, e.g., in
respect of interest rates, collateral, or other agreements, prior to the occurrence of such
a change.
	 
	 	 
	 

	 	Control is the holding of at least 30 % percent of voting rights of the Borrower. Voting
rights shall be assigned according to section 30 of the German Law for Regulation of Public
Offerings for the Purchase of Securities and Buy-outs (Gesetz zur Regelung von öffentlichen
Angeboten zum Erwerb von Wertpapieren und von Unternehmensübernahmen.).
	 
	 	 
	(5)

	 	Credit Facilities with other financial institutions











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	 	The Borrower will inform the Bank about new credit agreements or about material
changes in existing credit agreements with other financial institutions (e.g.
increases, terminations or demands for additional collateral) in advance if they are
under negotiation and otherwise immediately upon their effectiveness.
	 
	 	 
	 

	 	If credit by issuance of bank guarantees is being granted to the Borrower by
several lenders, the Borrower shall utilize the Credit Facility in a way that such
utilization does not result in a concentration of risk (e.g. through certain types of
bank guarantee) with the Bank in comparison to the other lenders.
	 
	 	 
	(6)

	 	Information and Cooperation regarding Credit by way of Bank Guarantee
	 
	 	 
	 

	 	The Borrower undertakes,







	 	a)	 	to provide the Bank in individual cases with all information required by the
Bank regarding the claim collaterized by the bank guarantee issued,
	 
	 	b)	 	to inform the Bank without delay of any changes of single and specific risks
regarding a bank guarantee issued and arising from the claim collaterized by such bank
guarantee (e.g. threatening or pending dispute regarding the settlement of the claim
collaterized by the bank guarantee as agreed upon), as soon as a demand under the bank
guarantee issued is threatened to provide the Bank upon demand and free of charge with
all information and documents deemed necessary by the Bank for the verification of
such right, to give the Bank all reasonable support and to specify qualified and
responsible employees of the Borrower and place them on demand of the Bank for this
purpose and to the extent necessary at the Bank’s disposal.





	 	 	 
	(7)

	 	Information with respect to Affiliated Companies
	 
	 	 
	 

	 	The Borrower undertakes to inform the Bank in advance if an Affiliated Company ceases to be
an Affiliated Company.






§ 11 — Termination for reasonable cause without notice:



A reasonable cause which entitles the bank to terminate this Credit Facility Agreement according to
no. 19 section 3 of the General Business Conditions without notice is also and especially given if:




	 	 	 
	(1)

	 	the Borrower does not comply with the General Undertakings or other material obligations under this Credit
Facility Agreement or under any collateral agreement entered into in connection with this Credit Facility Agreement, or
	 
	 	 
	(2)

	 	a change of ownership / change of control occurs and the parties do not reach an agreement on
the continuation of the Credit Facility Agreement on changed terms and conditions, e.g. in
respect of interest rate, collateral, or other agreements, in due time, or
	 
	 	 
	(3)

	 	any other financial indebtedness of the Borrower, the guarantor IPG Photonics Corporation or
any of their affiliated Companies is not paid when due or is declared, or capable of being
declared, due and payable by any creditor(s) thereof prior to its specified maturity by
reasons of the occurrence of an event of default (howsoever described) and the aggregate of
all such other financial indebtedness as aforesaid exceeds an amount of Euro 1.000.000,— or
the equivalent thereof in any other currency or currencies (“Cross Default”), or











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	(4)

	 	a reasonable cause within the meaning of no. 19. section 3 of the General Business Conditions
of the Bank is given with respect to any Affiliated Company and its utilisation regarding
Clause 5 of the Credit Facility Agreement.






§ 12 — MISCELLANEOUS




	 	 	 
	(1)

	 	Hedges
	 
	 	 
	 

	 	If the Bank and the Borrower have executed or will execute – whereto
the Bank is not obligated – hedging transactions for the coverage of
interest risk or currency risk also arising from this Credit Facility
Agreement, these transactions are independent of the Credit Facility
Agreement. A termination of the Credit Facility Agreement will have no
effect on the validity of the hedging transactions.
	 
	 	 
	(2)

	 	Foreign exchange risk
	 
	 	 
	 

	 	Any utilization in foreign currencies must be repaid in the same
currency, irrespective of changes in the exchange rate in the
meantime. Amounts outstanding in foreign currencies will be accounted
as utilization of the Credit Facility Amount / respective partial
credit facility amount at any time on the basis of the respective
current exchange rate to the Euro, as determined and published by the
Bank on the Internet around 13:00 Frankfurt time of every trading day.
If fluctuations in the exchange rate result in the total of amounts
outstanding exceeding the Credit Facility Amount / respective partial
credit facility amount, the Bank shall be entitled to demand security
by pledge of an Euro-amount in cash to the extent to which the amounts
outstanding exceed the Credit Facility Amount / the respective partial
credit facility amount.
	 
	 	 
	(3)

	 	Withholding Tax
	 
	 	 
	 

	 	Any amount payable by the Borrower hereunder will be paid free and clear of and
without deduction of any withholding taxes. Withholding taxes are taxes, duties or
governmental charges of any kind whatsoever which are imposed or levied in, by or on
behalf of the country in which the Borrower is situated, and which are deducted from
any payment hereunder. If the deduction of withholding taxes is required by law, then
the Borrower shall pay such additional amounts as may be necessary in order that the
net amounts received by the Bank after such deduction shall equal the amount that would
have been receivable had no such deduction been required.
	 
	 	 
	(4)

	 	Transfer of the Credit Risk to third parties with disclosure of information
	 
	 	 
	 

	 	The Bank is entitled to transfer solely the economic risk of this Credit Facility Agreement
in whole or in part to third parties for the purpose of relief of equity and
diversification of risk subject to the regulations stated below; this can be done by credit
derivatives, disposal of the claims under this Credit Facility Agreement or through
sub-participation, whereby the claims under this Credit Facility Agreement – including
respective collateral – may in this context also and especially be assigned or pledged. The
transfer of rights under this contract is also permitted for the purpose of refinancing.
The Bank is entitled to provide the information necessary for the transfer of the credit
risk to third parties as well as persons who have to be involved in the transfer due to
technical or legal reasons, e.g. credit rating agencies or auditors. The Borrower releases
the Bank insofar from the banking secrecy.






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	 	Third party may especially be a member of the European system of central banks, a financial
institution, a finance company, an insurance company, a pension fund, an investment company
or an institutional investor.
	 
	 	 
	 

	 	The Bank shall remain responsible for the performance of its obligations hereunder and the
Borrower shall continue to deal solely and directly with the Bank in connection with the
Bank’s rights and obligations hereunder.
	 
	 	 
	(5)

	 	Expenses and Indemnity
	 
	 	 
	 

	 	The Borrower shall reimburse the Bank for all reasonable and necessary costs and
expenses in connection with the enforcement and/or preservation of its rights (in court
or extrajudicial) against the Borrower including the enforcement and realization of
collateral.
	 
	 	 
	(6)

	 	Judgement Currency
	 
	 	 
	 

	 	Payments made by the Borrower to the Bank pursuant to a judgement or order of a court or
tribunal in a currency other than that of the Facility (the “Facility Currency”) shall
constitute a discharge of the Borrower’s obligation hereunder only to the extent of the
amount of the Facility Currency that the Bank, immediately after receipt of such
payment in such other currency, would be able to purchase with the amount so received
on a recognized foreign exchange market. If the amount so received should be less than
the amount due in the Facility Currency under this agreement, then as a separate and
independent obligation which gives rise to a separate cause of action the Borrower is
obliged to pay the difference.
	 
	 	 
	(7)

	 	Choice of Law and Jurisdiction
	 
	 	 
	 

	 	THIS AGREEMENT AND ALL RIGHTS OR OBLIGATIONS ARISING HEREUNDER SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE FEDERAL REPUBLIC OF GERMANY.
	 
	 	 
	 

	 	THE BORROWER HEREBY SUBMITS TO THE JURISDICTION OF THE COMPETENT COURTS OF SIEGEN,
GERMANY, AND, AT THE OPTION OF THE BANK, OF THE COMPETENT COURTS OF ITS DOMICILE.
BORROWER A HEREBY IRREVOCABLY APPOINTS IPG LASER GMBH, BURBACH, GERMANY AS ITS AGENT
FOR SERVICE OF PROCESS OR OTHER LEGAL SUMMONS IN CONNECTION WITH ANY ACTION OR
PROCEEDINGS IN GERMANY ARISING UNDER THIS AGREEMENT. THE BORROWER IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE THAT SUCH PROCEEDINGS HAVE BEEN
BROUGHT IN AN INCONVENIENT FORUM.
	 
	 	 
	(8)

	 	Waiver of Jury Trial
	 
	 	 
	 

	 	EACH OF THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT FACILITY AGREEMENT
	 
	 	 
	(9)

	 	Amendments
	 
	 	 
	 

	 	Any amendment to this credit agreement is required to be made in writing.
	 
	 	 
	(10)

	 	Effectiveness
	 
	 	 
	 

	 	This credit agreement becomes effective upon receipt by the Bank of the credit
agreement duly signed by all parties.











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	 	With effectiveness – and only after all Conditions Precedent are fulfilled
satisfactorily to the Bank – this credit agreement replaces all credit agreements
between the Bank and the Borrower. Utilization under such credit agreements will be
accounted as utilization of the Credit Facility respectively.
	 
	 	 
	(11)

	 	Severability Clause
	 
	 	 
	 

	 	Should any provision of this Agreement be unenforceable or invalid, the other provisions
hereof shall remain in full force and effect.









Declaration according to Section 8 German Money Laundering Law (Geldwäschegesetz)



The Borrower acts on its own account.



The Borrower is obligated to inform the Bank without delay of any change of the beneficial owner,
for proof in writing, with name and address.





This credit agreement will be specified by citing the date in the headline on the first page.




	 	 	 	 	 
	Deutsche Bank AG 

Filiale Deutschlandgeschäft
	 	 	 	 
	 
	 	 	 	 
	Siegen, 10.10.2007

	 	/s/ Joachim Gartz
	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	IPG Laser GmbH

	 	/s/ Valentin P. Gapontsev	 	 
	 

	 	 	 	 
	Place, Date
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	As guarantor only:
	 	 	 	 
	 
	 	 	 	 
	IPG Photonics Corporation

	 	/s/ Timothy P.V. Mammen	 	 
	 

	 	 	 	 
	Place, Date
	 	 	 	 







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