Document:

EX-10.4

 

Exhibit 10.4

September 21, 2006

Robert R. Stutler

c/o Sturm, Ruger & Company, Inc.

One Lacey Place

Southport, CT 06890

Dear Mr. Stutler:

          As you are aware, it is the practice of Sturm, Ruger & Co., Inc. (the “Company”) to provide
for severance benefits, subject to certain conditions, to certain officers whose employment is
terminated by the Company. The purpose of this letter is to set forth the terms of the severance
benefits that you would be entitled to receive under the circumstances outlined below.

          1. If your employment is terminated by the Company without Cause (as defined below) prior to a
Change in Control (as defined below), then you shall be eligible for such severance payments and
benefits, if any, as may be provided under then-applicable Company policy for similarly situated
employees whose employment is terminated under similar circumstances, subject to the conditions set
forth in such policy.

          Notwithstanding the foregoing or anything to the contrary contained in any Company policy
providing for severance payments and benefits to which you may become eligible pursuant to this
Section 1, to the extent required by Section 409A (as defined below), no payments shall be made to
you pursuant to any such Company policy during the first six months following your termination of
employment with the Company; you shall instead receive a lump sum payment on the first day of the
seventh month following the date your employment terminates in an amount equal to the total amount
of payments that you otherwise would have received during the first six months following your
termination of employment. Any remaining payments shall be made to you in accordance with the
terms of the applicable Company policy.

          2. As used herein, a “Change in Control” shall be deemed to have occurred if the event set
forth in any one of the following paragraphs shall have occurred:

          (i) any person is or becomes the Beneficial Owner (as defined below), directly or indirectly,
of securities of the Company representing 25% or more of the combined voting power of the Company’s
then outstanding securities; or

          (ii) the following individuals cease for any reason to constitute a majority of the number of
directors then serving as directors of the Company: individuals who, on the date hereof,
constitute the Board of Directors of the Company and any new director (other than a director whose
initial assumption of office is in connection with the settlement of an actual or threatened
election contest, including but not limited to a consent solicitation, relating to the

 

 

election of directors of the Company) whose appointment or election by the Board of Directors
of the Company or nomination for election by the Company’s stockholders was approved or recommended
by a vote of at least two-thirds (2/3) of the directors then still in office who either were
directors on the date hereof or whose appointment, election or nomination for election was
previously so approved or recommended; or

          (iii) a merger or consolidation of the Company is consummated with any other corporation or
entity, other than (a) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities of the surviving
entity or any Parent (as defined below) thereof), at least a majority of the combined voting power
of the securities of the Company, such surviving entity or any Parent thereof outstanding
immediately after such merger or consolidation or (b) a merger or consolidation effected solely to
implement a recapitalization of the Company (or similar transaction) in which no person is or
becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 25%
or more of the combined voting power of the Company’s then outstanding securities;

          (iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of
the Company or there is consummated a sale or disposition by the Company of any assets which
individually or as part of a series of related transactions constitute all or substantially all of
the Company’s consolidated assets; or

          (v) the execution of a binding agreement that if consummated would result in a Change in
Control of the type specified in clause (i) or (iii) of this Section 2 (an “Acquisition Agreement”)
or of a binding agreement for the sale or disposition of assets that, if consummated, would result
in a Change in Control of the type specified in clause (iv) of this Section 2 (an “Asset Sale
Agreement”) or the adoption by the Board of Directors of the Company of a plan of complete
liquidation or dissolution of the Company that, if consummated, would result in a Change in Control
of a type specified in clause (iv) of this Section 2 (a “Plan of Liquidation”); provided however,
that a Change in Control of the type specified in this clause (v) shall not be deemed to exist or
to have occurred as a result of the execution of such Acquisition Agreement or Asset Sale
Agreement, or the adoption of such a Plan of Liquidation, from and after the Abandonment Date (as
defined below) if your employment has not been terminated on or prior to the Abandonment Date. The
term “Abandonment Date” shall mean the date on which (a) an Acquisition Agreement, Asset Sale
Agreement or Plan of Liquidation is terminated (pursuant to its terms or otherwise) without having
been consummated, (b) the parties to an Acquisition Agreement or Asset Sale Agreement abandon the
transactions contemplated thereby, (c) the Company abandons a Plan of Liquidation or (d) a court or
regulatory body having competent jurisdiction enjoins or issues a cease and desist or stop order
with respect to or otherwise prevents the consummation of, or a regulatory body notifies the
Company that it will not approve, an Acquisition Agreement, Asset Sale Agreement or Plan of
Liquidation or the transactions contemplated thereby and such injunction, order or notice has
become final and not subject to appeal; or

          (vi) any person other than Stephen Sanetti becomes the President or Chief Executive Officer of
the Company.

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          As used in connection with the foregoing definition of Change in Control, the term “Affiliate”
shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act;
the term “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act;
and “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time;
and the term “Parent” shall mean any entity that becomes the Beneficial Owner of at least a
majority of the voting power of the outstanding voting securities of the Company or of an entity
that survives any merger or consolidation of the Company or any direct or indirect subsidiary of
the Company.

          3. (a) Subject to the limitations set forth in Section 5: (A) if a Change in Control of the
types specified in clauses (i)-(v) of Section 2 above occurs during the Term (as defined below) and
on or after the effective date of such Change in Control the Company terminates your employment
(other than for Cause), or (B) if a Change in Control of the type specified in clause (vi) of
Section 2 above occurs and during the Term within twenty four months from the date effective of
such Change in Control the Company terminates your employment (other than for Cause), then the
Company shall pay to you, within 30 days after the date your employment terminates or, to the
extent required by Section 409A, on the first day of the seventh month following the date your
employment terminates, as a severance payment for services previously rendered to the Company, a
lump sum equal to the greater of : (i) the product of (x) 1.5 multiplied by (y) your Annual
Compensation (as defined below) in effect immediately prior to the date your employment terminates
(without regard to any decrease in the rate of your Annual Compensation made after the Change in
Control) and (ii) the product of (x) your Annual Compensation in effect immediately prior to the
date your employment terminates (without regard to any decrease in the rate of your Annual
Compensation made after the Change in Control) multiplied by (y) the duration of your employment
with the Company measured in full years and portions thereof multiplied by (z) .04167.

               (b) Subject to the limitations set forth in Section 5: (A) if a Change in Control of the
types specified in clauses (i)-(v) of Section 2 above occurs during the Term and on or after the
effective date of such Change in Control the Company reduces your annual salary or makes a material
change in the nature and scope of your duties to a level below that in effect immediately prior to
the effective date of the Change in Control and thereafter you terminate your employment during the
Term, or (B) if a Change in Control of the type specified in clause (vi) of Section 2 above occurs
during the Term and within twenty four months from the effective date of such Change in Control the
Company reduces your annual salary or makes a material change in the nature and scope of your
duties to a level below that in effect immediately prior to the effective date of the Change in
Control and thereafter you terminate your employment during the Term, then the Company shall pay to
you, within 30 days after the date your employment terminates or, to the extent required by Section
409A, on the first day of the seventh month following the date your employment terminates, as a
severance payment for services previously rendered to the Company, a lump sum equal to the greater
of: (i) the product of (x) 1.5 multiplied by (y) your Annual Compensation in effect immediately
prior to the date your employment terminates (without regard to any decrease in the rate of your
Annual Compensation made after the Change in Control) and (ii) the product of (x) your Annual
Compensation in effect immediately prior to the date your employment terminates (without regard to
any decrease in the rate of your Annual Compensation made after the Change in Control) multiplied
by (y) the

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duration of your employment with the Company measured in full years and portions thereof
multiplied by (z) .04167.

               (c) The term “Annual Compensation” shall mean, at any time, an amount equal to your annual
rate of salary at such time, plus 100% of the target cash bonus or other cash incentive that you
are eligible to earn in such year pursuant to each plan or program (whether or not such plan or
program has been formalized or is in written form) of the Company in effect for such year that
provides for cash bonuses or other cash incentives, or if no such plan or program has been adopted
with respect to such year, 100% of the target cash bonus or other cash incentive that you were
eligible to earn in the most recent year in which such a plan or program was in effect. The
severance benefits specified in this Section 3 and in Section 4 hereof shall be in lieu of any
severance pay or other severance benefit that the Company may provide to terminated employees
pursuant to policies of the Company that may at that time be in effect (unless the only severance
benefits to which you are entitled are those severance benefits provided under such policies).

          4. Upon the occurrence of a termination of your employment under circumstances entitling you
to receive the severance payment provided in Section 3 above, the Company shall also cause to be
continued, for a period equal to the greater of (i) the remaining Term in effect at the time of the
Change in Control or (ii) the period for which such coverage would be maintained if you were fully
eligible to receive severance benefits under then-applicable Company benefit plans, programs or
policies, subject to the limitations set forth in such plans, programs or policies, such life,
medical and dental insurance coverage as is otherwise maintained by the Company for full-time
employees (based on your annual rate of salary in effect immediately prior to the date your
employment terminates), provided (1) that you shall continue to pay all amounts in respect of such
coverage that an employee receiving the same level of coverage is or would be required to pay, and
(2) no insurance coverage shall be continued past the last day of the second calendar year after
the year your employment with the Company terminates.

          5. In the event that any amount otherwise payable hereunder would be deemed to constitute a
parachute payment (a “Parachute Payment”) within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”), and if any such Parachute Payment, when added to any
other payments which are deemed to constitute Parachute Payments, would otherwise result in the
imposition of an excise tax under Section 4999 of the Code, the amounts payable hereunder shall be
reduced by the smallest amount necessary to avoid the imposition of such excise tax. Any such
limitation shall be applied to such compensation and benefit amounts, and in such order, as the
Company shall determine in its sole discretion.

          6. You shall have no right to receive any severance pay or severance benefit or any other
compensation or benefit for any period after the date of the termination by the Company of your
employment for Cause or, except as otherwise provided in Section 3, following the voluntary
termination by you of your employment. The term “Cause” shall mean your personal dishonesty,
willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to
perform assigned duties or willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order.

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          7. Nothing in this letter (a) confers upon you the right to continue in the employment of the
Company or the right to hold any particular office or position with the Company, (b) requires the
Company to pay you, or entitles you to receive, any specified annual salary or interferes with or
restricts in any way the right of the Company to decrease your annual salary at any time or (c)
interferes with or restricts in any way the right of the Company to terminate your employment at
any time, with or without Cause.

          8. Any payments due you hereunder shall be reduced by all applicable withholding and other
taxes.

          9. The provisions set forth in this letter shall continue in effect throughout its Term. The
“Term” of this letter shall mean the period commencing on the date hereof and ending on the first
anniversary of the date hereof, subject to automatic extension on each anniversary of the date
hereof, unless (a) you give notice of your intent to terminate your employment, or otherwise
terminate your employment, before such date or (b) the Company gives written notice to you of the
termination of such automatic extensions at least 360 days prior to such date.

          10. This letter is intended to be binding upon the Company, its successors in interest and
assigns. On and after the date of this letter, the terms regarding severance benefits described
herein shall supercede and replace all severance and other benefits provided under, and any other
provisions set forth or described in any prior letters to, or agreements with, you relating to
provisions of benefits upon a termination of your employment, and are contingent upon your
acceptance by signing below.

          11. This letter shall be governed by, construed and enforced in accordance with the laws of
the State of New York, without giving effect to the principles of conflicts of law thereof.

          12. You and the Company intend that this letter complies with the provisions of Section 409A
of the Code and the regulations and other guidance of general applicability that are issued
thereunder (“Section 409A”). You and the Company agree to negotiate in good faith regarding
amendments to this letter that may be necessary or desirable to comply with Section 409A.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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          13. This letter may be executed in one or more counterparts, each of which will be deemed to
be an original, but all of which will collectively constitute a single original.

	 	 	 	 	 
	 	Very truly yours,

STURM, RUGER & CO., INC.

 	 
	 	By:  	/s/  Stephen L.
Sanetti	 
	 	 	Name:  	Stephen L. Sanetti	 
	 	 	Title:  	President and General Counsel	 
	 

Agreed and Accepted to:

By:
Robert R.Stutler                     

Date:  September 24,
2006

6<PAGE>

                                                                   EXHIBIT 10.21

                 ASSIGNMENT, RESEARCH AND DEVELOPMENT AGREEMENT

     THIS AGREEMENT is entered into as of the 30th day of August, 2000 (the
"Effective Date") by and among IPG Photonics Corporation, a Delaware corporation
("Photonics"), IPG Laser GmbH, a German corporation ("Laser") and IPG Fibertech
S.R.L., an Italian corporation ("Fibertech") (collectively, the "Developers")
and NTO "IRE-POLUS", a Russian Corporation ("Contractor") (each, a "Party" and
collectively, the "Parties").

                                    RECITALS

     WHEREAS, the Developers desire to engage Contractor to assist in the
development of the Developed Technology and Intellectual Property;

     WHEREAS, Contractor has the expertise and facilities to undertake such
development work, and is willing to undertake such work.

     NOW, THEREFORE, in consideration of the premises and of the mutual promises
hereinafter set forth, the Parties hereto agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

     For purposes of this Agreement, the following definitions shall apply to
the terms set forth herein:

     1.1 Contracts. "Contracts" shall mean those contracts listed on Exhibit E
attached hereto between Contractor and Laser pursuant to which Laser purchased
certain products or goods and/or research and development services or other
services and an irrevocable, exclusive, royalty-free, unconditional, worldwide
right to use all intellectual property rights relating to such products and
services. Such Contracts constitute all of the agreements and understandings
between Contractor and Laser for the development of Intellectual Property.

     1.2 Developed Technology. "Developed Technology" shall mean the property
listed in Exhibit A to this Agreement.

     1.3 Development Costs. "Development Costs" shall mean the Contractor's
direct and indirect costs as set forth in Exhibit C to this Agreement.

     1.4 Development Plan. "Development Plan" shall mean the written strategy
for development of a Project, including, without limitation, the nature and
timing of research, and other appropriate matters, which shall be agreed on by
Developers and Contractor.

     1.5 Improvements. "Improvements" shall mean any findings, discoveries,
inventions, derivative works, additions, modifications, formulations, or changes
made by either Developers or Contractor during the term of this Agreement that
relate to the Developed Technology, Intellectual Property or any Product.

     1.6 Intellectual Property. "Intellectual Property" shall mean the property
listed in Exhibit A to this Agreement.

<PAGE>

     1.7 Product. "Product" shall mean the property listed in Exhibit A to this
Agreement.

     1.8 Project or Projects. "Project" or "Projects" shall mean the research
project(s) listed from time-to-time in Exhibit D to this
Agreement.

     1.9 Related Party. "Related Party" shall mean any legal entity directly or
indirectly controlled by, controlling, or under common control
with the Developers.

     1.10 Third Party or Third Parties. "Third Party" or "Third Parties" shall
mean any entity other than a party to this Agreement.

     1.11 Year. "Year" shall mean the twelve-month period ending on December 31
or such other annual accounting period as may be adopted by the Parties.

                                    ARTICLE 2
                            PROJECTS AND COMPENSATION

     2.1 Initiation. Contractor shall promptly undertake each Project once the
Development Plan for such Project has been agreed upon by the Developers and
Contractor.

     2.2 Reports. Contractor shall provide monthly reports to the Developers on
the progress that has been made with respect to the Project(s) (the "Report").
Each Report shall be submitted no later than fifteen (15) days following the end
of each month and shall have such form and substance as shall be specified by
Developers.

     2.3 Payment by Developers. Each Report shall identify the Development Costs
that have been incurred by Contractor with respect to each Project during the
period covered by such Report, including a corporate overhead fee equal to ten
(10) percent of such costs. Developers shall pay Contractor the amount of such
costs within thirty (30) days following receipt by Developers of each Report.

     2.4 Access to Project. Developers shall have the right at their expense to
have their employees or agents inspect during normal business hours the
facilities wherein the Project(s) is being conducted, including, without
limitation, books and records relating to the Development Costs and the research
materials that are compiled by the professional staff of Contractor.

     2.5 Exclusivity. The Contractor shall not perform services involving the
development of Intellectual Property for any person, firm or corporation other
than the Developers.

                                    ARTICLE 3
                   GRANT OF RIGHT TO USE INTELLECTUAL PROPERTY

     3.1 Grant by Developer. Developers grant to Contractor the limited
nonexclusive right to use, develop, and enjoy the Intellectual Property solely
for the purpose of completing the Project(s), subject to the terms and
conditions of this Agreement. Such limited license and right shall terminate
automatically upon termination of a Development Plan or this Agreement.

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<PAGE>

     3.2 No Further Transfer. Contractor shall not assign, sublicense, make
available, or otherwise transfer or disclose any right to use, develop, or
otherwise enjoy the Intellectual Property without the express written consent of
Developer.

     3.3 Limited Uses by Contractor. Notwithstanding anything to the contrary
herein, Contractor shall have the limited, non-exclusive right to use the
Technology (as defined below), Developed Technology, Intellectual Property and
Improvements in connection with the Contractor's manufacture, marketing, sale
and use of (a) Products in the countries that comprised the former Union of
Soviet Socialist Republics for use in those countries, and (b) unless
unanimously agreed to by Photonics' Board of Directors, other products and
services (i) not involving telecommunications; (ii) not related to projects
undertaken for Developer currently and in the future; and (iii) not related to
the Developer's current and future business.

                                    ARTICLE 4
                   EXCHANGE OF INFORMATION AND CONFIDENTIALITY

     4.1 Intellectual Property. During the term of this Agreement, Developers
shall disclose to Contractor such of their Intellectual Property as Contractor
reasonably needs to complete the Project.

     4.2 Improvements. During the term of this Agreement, each Party shall
promptly inform the other party of any information that it obtains or develops
regarding Improvements.

     4.3 Confidentiality. During the Term of this Agreement, and for a period
often (10) years from the date of expiration or termination of this Agreement,
Contractor shall treat this Agreement, Intellectual Property, Developed
Technology, Products, Improvements, and all information, data, reports, and
other records that it receives from Developers as secret, confidential, and
proprietary ("Confidential Information"), and shall not disclose or use such
Information without the prior written consent of the Developers except as
provided in this Agreement. Contractor shall develop and implement such
procedures as may be required to prevent the intentional or negligent disclosure
to Third Parties of Confidential Information communicated to Contractor and its
employees and agents by Developers, including, but not limited to, requiring
each of its employees and agents having access to such information under this
Agreement to enter into an appropriate nondisclosure agreement with Contractor
for the benefit of the Developers.

     4.4 Nothing in this Agreement shall prevent the disclosure by Contractor or
its employees and agents of Confidential Information that:

          (a)  Prior to the transmittal thereof to Contractor was of general
               public knowledge;

          (b)  Becomes, subsequent to the time of transmittal to Contractor, a
               matter of general public knowledge otherwise than as a
               consequence of a breach by Contractor of any obligation under
               this Agreement;

          (c)  Is made public by Developers;

          (d)  Was in the possession of Contractor in documentary form prior

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<PAGE>

               to the time of disclosure thereof to Contractor by Developers,
               and is held by Contractor free of any obligation of confidence to
               Developers or any Third Party; or

          (e)  Is received in good faith from a Third Party having the right to
               disclose it, who, to the best of Contractors knowledge, did not
               obtain such information from Developers and who imposes no
               obligation of secrecy on Contractor with respect to such
               information.

                                    ARTICLE 5
                                    OWNERSHIP

     5.1 Intellectual Property Ownership. Contractor acknowledges Developers'
exclusive right, title, and interest in and to the Developed Technology;
Improvements and Intellectual Property. Contractor shall not itself, nor shall
it permit its employees and agents, to at any time do or cause to be done, or
fail to do or cause to be done, any act or thing, directly or indirectly,
contesting or in any way impairing Developer's right, title, or interest in the
Developed Technology, Improvements and Intellectual Property. Every use of any
Developed Technology, Improvements and Intellectual Property by Contractor shall
inure to the benefit of Developers.

     5.2 Ownership of Rights. Photonics, on behalf of Developers shall at all
times, during or after the term of this Agreement, be the sole owner of all
rights relating to or emanating from Intellectual Property, Developed
Technology, Improvements, or other matters developed in, or related to, a
Project. All such works shall belong exclusively to Photonics, with Photonics
having the right to obtain and to hold in its own name, copyright registrations,
patents and such other intellectual property protection as may be appropriate to
the subject matter, and any extensions and renewals thereof. All works of
Contractor, its employees and agents, subject to or protectable under copyright
laws of any country shall, to the fullest extent possible, be works made for
hire. To the extent such works do not qualify as works made for hire, Contractor
hereby sells, assigns and transfers to Photonics and shall sell, assign and
transfer to Photonics, on behalf of Developers, all of its right, title and
interest in such works including all moral rights where permitted by law and all
rights of renewal and the right to sue and recover for infringement or
misappropriation or unfair competition related to such works. Contractor agrees
to give Photonics, and any person designated by Photonics, reasonable
assistance, at Photonics' expense, required to perfect the rights defined in
this Section, including, but not limited to, executing and delivering all
documents requested by Photonics in connection therewith. Unless otherwise
directed by Photonics, upon the completion of the Services or upon the earlier
termination of the engagement, Contractor shall immediately turn over to
Photonics all such works as well as all materials and deliverables developed,
including, but not limited to, working papers, descriptions, reports, notes and
data. All such works shall bear Photonics' copyright and trade secret notices,
as specified by Photonics. No rights to such works shall remain with Contractor.

                                   ARTICLE 5A
                                   ASSIGNMENT

     5A.1 For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Contractor hereby confirms, acknowledges and
agrees with Laser that it hereby conveys and assigns to Laser, its

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<PAGE>

successors and assigns, the entire right, title and interest, including any and
all intellectual property rights therein or relating thereto, in and to the (a)
any and all goods, products or services described in each Contract and (b) the
technology, processes and know how relating to such goods, products or services
(collectively, the "Technology").

     5A.2 Neither Contractor nor any of its officers, directors, employees or
affiliates, will at any time reveal to any person or entity any of the trade
secrets or confidential information relating to the goods, products, or services
described in each Contract or the Technology without the prior written consent
of Laser, and shall not use or attempt to use any such information in any manner
which may injure or cause loss or may be calculated to cause loss whether
directly or indirectly to Laser.

                                    ARTICLE 6
                              TERM AND TERMINATION

     6.1 Term. This Agreement shall remain in effect, unless sooner terminated
by mutual consent of the Parties, until the termination of the last Project
agreed on by the Parties.

     6.2 Termination. Either Developers or Contractor shall have the right to
terminate this Agreement at any time, by giving written notice to the Party in
default on the occurrence of any of the following events:

          (a)  A Party fails or neglects to perform covenants or provisions of
               this Agreement if such default is not corrected within sixty (60)
               days after receiving written notice from the other Party with
               respect to such default;

          (b)  Any act, determination, filing, judgment, declaration, notice,
               appointment of receiver or trustee, failure to pay debts, or
               other events under any law applicable to a Party indicating the
               insolvency or bankruptcy of such Party;

          (c)  The taking of any extraordinary governmental action, including,
               without limitation, seizure or nationalization of assets, stock,
               or other property relating to a Party; or

          (d)  Any other event that shall cause Developers to have concern about
               the solvency, stability and/or freedom of Contractor from
               governmental seizure or interference.

     6.3 Termination by Developer. A Developer may terminate this Agreement at
any lime by providing thirty (30) days prior written notice to Contractor of
such termination.

     6.4 Rights and Duties on Termination. On termination of this Agreement,
Contractor shall return to Developers all Intellectual Property, Improvements,
and any and all Confidential Information disclosed to it by Developers in its
possession and all such items, and all Improvements shall be the exclusive
property of Developers.

     6.5 Survival. Termination of this Agreement by either Party pursuant to the
provisions of this Article 6 shall terminate each Party's obligations under this
Agreement except for the provisions of Articles 4, 5, SA, 7 and Section 8.10,
all of which shall survive the termination of this Agreement.

                                       5

<PAGE>

                                    ARTICLE 7
                                 INDEMNIFICATION

     Contractor shall hold Developers harmless and shall indemnify Developers
from and against any loss, cost, or expense, including reasonable attorneys'
fees, related to any act or omission in connection with the performance or
nonperformance of its duties under the terms of this Agreement or any breach of
any representation and warranty made by Contractor in this Agreement.

                                    ARTICLE 8
                            MISCELLANEOUS PROVISIONS

     8.1 Notices. Any and all notices, elections, offers, acceptances, and
demands permitted or required to be made under this Agreement shall be in
writing, signed by the Party giving such notice, election, offer, acceptance, or
demand and shall be delivered personally, or sent by registered or certified
mail, to the Party, at its address on file with the other party or at such other
address as may be supplied in writing. The date of personal delivery or the date
of mailing, as the case may be, shall be the date of such notice, election,
offer, acceptance, or demand.

     8.2 Force Majeure. If the performance of any part of this Agreement by any
Party, or of any obligation under this Agreement, is prevented, restricted,
interfered with or delayed by reason of any cause beyond the reasonable control
of the Party liable to perform, unless conclusive evidence to the contrary is
provided, the Party so affected shall, on giving written notice to the other
party, be excused from such performance to the extent of such prevention,
restriction, interference or delay, provided that the affected Party shall use
its reasonable best efforts to avoid or remove such causes of nonperformance and
shall continue performance with the utmost dispatch whenever such causes are
removed. When such circumstances arise, the Parties shall discuss what, if any,
modification of the terms of this Agreement may be required in order to arrive
at an equitable solution.

     8.3 Successors and Assigns. This Agreement shall be binding on and shall
inure to the benefit of the Parties and any Related Party, their respective
successors and assigns, and each Party agrees, to execute any instruments that
may be necessary or appropriate to carry out and execute the purpose and
intentions of this Agreement and hereby authorizes and directs its successors
and assigns to execute any and all such instruments. Each and every successor in
interest to any Party, whether such successor acquires such interest by way of
gift, devise, assignment, purchase, conveyance, pledge, hypothecation,
foreclosure, or by any other method, shall hold such interest subject to all of
the terms and provisions of this Agreement. The rights of the Parties, and their
successors in interest, as among themselves and shall be governed by the terms
of this Agreement, and the right of any Party, or successor in interest to
assign, sell, or otherwise transfer or deal with its interests under this
Agreement shall be subject to the limitations and restrictions of this
Agreement.

     8.4 Amendment. No change, modification, or amendment of this Agreement
shall be valid or binding on the Parties unless such change or modification
shall be in writing signed by the Party or Parties against whom the same is
sought to be enforced.

     8.5 Remedies Cumulative. The remedies of the Parties under this Agreement
are cumulative and shall not exclude any other remedies to which

                                       6

<PAGE>

the Party may be lawfully entitled.

     8.6 Further Assurances. Each Party hereby covenants and agrees that it
shall execute and deliver such deeds and other documents as may be required to
implement any of the provisions of this Agreement.

     8.7 Specific Performance. The Parties acknowledge that they will be damaged
if this Agreement is not specifically enforced. Therefore, in the event of a
breach by any party of any provision of this Agreement, the other parties shall
be entitled, in addition to all other rights or remedies available to them, to
injunctions restraining such breach, without being required to post any bond or
other security, and/or to a decree for specific performance of the provisions of
this Agreement.

     8.8 No Waiver. The failure of any Party to insist on strict performance of
a covenant hereunder or of any obligation hereunder shall not be a waiver of
such Party's right to demand strict compliance therewith in the future, nor
shall the same be construed as a breach of this Agreement.

     8.9 Integration. This Agreement constitutes the full and complete agreement
of the Parties with respect to the subject matter hereof.

     8.10 Counterparts. This Agreement may be executed in multiple copies, each
of which shall for all purposes constitute one and the same agreement, binding
on the Parties, and each Party hereby covenants and agrees to execute all
duplicates or replacement counterparts of this Agreement as may be required.

     8.11 Governing Law/Jurisdiction. This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of New York
(without giving effect to principles of conflicts of law). All actions and
proceedings arising out of or relative to this Agreement shall be heard and
determined in a Massachusetts state or federal court sitting in the City of
Boston. The parties hereby irrevocably submit to the exclusive jurisdiction of
any Massachusetts state or federal court sitting in the City of Boston in any
action or proceeding arising out of or relating to this Agreement, and hereby
irrevocably agree that all claims in respect of such action or proceeding may be
heard and determined in such Massachusetts state or federal court. The parties
hereby irrevocably waive, to the fullest extent they may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding. The parties agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HEREBY WAIVES,
AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR PASSED UPON THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE. This Agreement
will not be governed by the United Nations Convention of Contracts for the
International Sale of Goods, the application of which is hereby expressly
excluded.

     8.12 Severability. In the event any provision, clause, sentence, phrase, or
word hereof, or the application thereof in any circumstances, is held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
the validity or enforceability of the remainder hereof, or of the

                                       7

<PAGE>

application of any such provision, sentence, clause, phrase, or word in any
other circumstances.

                            [Signature Pages Follow]

                                       8

<PAGE>

The Parties, intending to be legally bound, have signed this Agreement as of the
Effective Date.

                                        IPG PHOTONICS CORPORATION

                                        By: /s/ Peter Veghese Mammen
                                            ------------------------------------
                                        Printed Name: Peter Verghese Mammen
                                        Title: Treasurer
                                        Date: 8/30/00

                                        IPG LASER GMBH

                                        By /s/ Dr. Valentin Gapontsev
                                           -------------------------------------
                                        Printed Name: Dr Valentin Gapontsev
                                        Title: Gerschaftsfuhrer
                                        Date: 8/30/00

       [Signature Page to Assignment, Research and Development Agreement)

                                       9

<PAGE>

                                        IPG FIBERTECH S.R.L.

                                        By: /s/ Dr. Valentin Gapontsev
                                            ------------------------------------
                                        Printed Name: Dr Valentin Gaponstev
                                        Title: Director
                                        Date: 8/30/00

                                        NTO-IRE Polus

                                        By: /s/ Dr. Valentin Gapontsev
                                            ------------------------------------
                                        Printed Name: Dr Valentin Gaponstev
                                        Title: General Director
                                        Date: 8/30/00

       [Signature Page to Assignment, Research and Development Agreement]

                                       10

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