Document:

Exhibit 10.1

 

THIS ASSET PURCHASE
AGREEMENT is made as of the 5th day of May, 2008, between

 

HOSTOPIA.COM INC., a
company incorporated under the laws of the State of Delaware (hereinafter “HOSTOPIA”)

 

OF THE FIRST PART

 

- and -

 

TUCOWS.COM CO., a corporation incorporated under the laws of Nova Scotia (hereinafter “TUCOWS”)

 

OF THE SECOND PART

 

WHEREAS  TUCOWS provides its
customers with shared web hosting and related services through the URL
http://www.domaindirect.com and otherwise;

 

AND WHEREAS duly authorized
representatives of the parties hereto signed a letter of intent dated April 8, 2008 with respect to the proposed sale of certain of TUCOWS’ assets to
HOSTOPIA;

 

AND WHEREAS HOSTOPIA wishes to purchase from
TUCOWS, and TUCOWS wishes to sell, certain of the assets of the Shared
Webhosting Business (as defined below).

 

NOW THEREFORE, HOSTOPIA
agrees to purchase from TUCOWS, and TUCOWS agrees to sell to HOSTOPIA, the
Purchased Assets (as hereinafter defined) on the following terms and
conditions:

 

1.                                      Defined Terms

 

In this Agreement and in the schedules hereto, the
following terms and expressions will have the following meanings and
capitalized terms not defined below will have the meanings ascribed to them in
the body of this Agreement:

 

“Closing”
has the meaning ascribed thereto in Section 7;

 

“Closing Date”
has the meaning ascribed thereto in Section 7;

 

“Deferred Revenue”
has the meaning ascribed thereto in Section 4;

 

“Domain Direct End-Users”
means end-users that receive Domain Direct Services from TUCOWS and that are
currently hosted on HOSTOPIA’s servers,  but excludes
all customers to whom the Services are provided in conjunction with Trellix
products and services.

 

“Domain Direct Services”
means the webhosting services offered by TUCOWS at domaindirect.com and related
websites, but excludes any “Web Identity” accounts or services.

 

1

 

“Encumbrances” means all 
mortgages, charges, pledges, security interests, liens, encumbrances,
actions, claims, demands and equities of any nature whatsoever or howsoever
arising and any rights or privileges capable of becoming any of the foregoing;

 

“End-Users” means the customers of the Shared Webhosting Business who are the
end-users of the Services and includes Domain Direct End-Users, IYD End-Users
and Net Identity End-Users, but excludes all customers to whom the Services are
provided in conjunction with Trellix products and services;

 

“End-User
Agreements” means all services agreements
between TUCOWS and End-Users relating to the Shared Webhosting Services, the
current form of which is attached as Schedule A;

 

“End-Users
Information” means all information possessed
by TUCOWS identifying and describing the End-Users, including, but not limited
to, all customer lists, email addresses, addresses, phone numbers, credit card
information, billing information, user ID’s and passwords, as set out in
Schedule B;

 

“Financial Information” means the financial information
relating to the revenues of the Shared Webhosting Business, as set out in
Schedule C;

 

“GAAP”
means United States generally accepted accounting principles;

 

“Governmental Charges” means all taxes, customs duties,
rates, levies, assessments, reassessments and other charges, together with all
penalties, interest and fines with respect thereto, payable to any federal,
state, municipal, local or other government or governmental agency, authority,
board, bureau or commission, domestic or foreign;

 

“Intellectual Property” means any intellectual property
essential to the Shared Webhosting Business, including any software licenses
owned or used by TUCOWS with respect to the Shared Webhosting Business, as more
fully described in Schedule D;

 

“IYD End-Users”
means end-users that receive IYD Services from TUCOWS.

 

“IYD Services”
means the webhosting services offered by TUCOWS at iyd.com and related
websites;

 

“Interim Period” has the meaning ascribed thereto in Section 11;

 

“Migrated End-Users”
means the Net Identity End-Users and IYD End-Users that are not currently
hosted upon HOSTOPIA’s servers, and which are hosted on HOSTOPIA’s servers on
or before the date that is 90 days following the Closing Date, as further
described in Schedule E.

 

“Net Identity End-Users”
means end-users that receive Net Identity Services from TUCOWS at
netidentity.com and related websites.

 

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“Net Identity Services”
means web hosting services offered by TUCOWS at netidentity.com and related
websites.

 

“Pre-Closing Annualized Revenue” has
the meaning ascribed thereto in Section 4.

 

“Purchased Assets” has the meaning ascribed thereto in Section 2
of this Agreement;

 

“Purchase Price” has the meaning ascribed
thereto in Section 4;

 

“Services” means the Domain Direct Services,
IYD Services and Net Identity Services, ;

 

“Shared Webhosting Business” means the business associated
with the sale of the Services to the End Users, as of the date herein.

 

2.                                      Purchased Assets

 

HOSTOPIA will
purchase from TUCOWS the following assets used in connection with the Shared
Webhosting Business (the “Purchased Assets”),
free and clear of all Encumbrances, for the purchase price as set forth below:

 

(a)                                  The right to host
End-Users’ websites in accordance with the End-User Agreements;

 

(b)                                 TUCOWS’ contractual
rights and obligations relating to the delivery of Services to End-Users,
including those arising under all End-User Agreements;

 

(c)                                  The End-Users
Information; and

 

(d)                                 All causes of action,
lawsuits, judgments, deposits, refunds, rebates, choses in action, rights of
recovery, rights of set-off, rights of recoupment, claims and demands of any
nature available to or being pursued by TUCOWS with respect to the Shared
Webhosting Business or ownership, use, function or value of any of the
Purchased Assets or Assumed Liabilities.

 

3.                                      Excluded Assets

 

For greater certainty, the Purchased Assets do not include any tangible
assets of TUCOWS or any other assets used in connection with any business of
TUCOWS other than the Shared Webhosting Business.

 

4.                                      Purchase Price and Adjustment

 

(a)                                  Purchase Price. The aggregate purchase price (the “Purchase
Price”) for the Purchased Assets shall, subject to the Adjustment,
be an amount equal to [X — Y - Z], where X and Y are defined as follows:

 

X = 1.3 x Pre-Closing Annualized Revenue

Y = .15 x Deferred Revenue

Z = .28 x Net Identity Deferred Revenue

 

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The calculation of the Purchase Price is set out in Schedule C.

 

(b)                                 Purchase Price Payment.
Payment of the Purchase Price shall be as follows:

 

(i)            Twenty percent (20%) of the Purchase Price shall be paid by HOSTOPIA
to TUCOWS upon signing the Definitive Agreement; and

 

(ii)           Eighty percent (80%) of the Purchase Price shall be paid by HOSTOPIA
to TUCOWS on the Closing Date.

 

All
payments shall be made by certified cheque, wire transfer of immediately
available funds, or as may otherwise be mutually agreed by the parties.

 

(c)                                  Adjustment. TUCOWS shall
pay HOSTOPIA an amount equal to the Adjustment, no later than 90 days following
the Closing Date.

 

“Adjustment”
means an amount equal to:

 

(a)                                  the aggregate of all fees for the Services received by TUCOWS, if
any, during the 90 day period following the Closing Date from Domain Direct
End-Users; plus

 

(b)                                 the aggregate of all fees for the Services received by TUCOWS, if
any, during the 90 day period following the Closing Date from IYD End-Users;
plus

 

(c)                                  the aggregate of all fees for the Services received by TUCOWS, if
any, during the 90 day period following the Closing Date from Net Identity
End-Users, less the Billing Allowance, Customer Service Allowance and Hosting
Allowance on a pro-rata basis (all as defined below); plus

 

(d)                                 the amount that HOSTOPIA has paid TUCOWS for the IYD End-Users and
Net Identity End-Users in accordance with this Agreement to the extent that the
number of Migrated End-Users is less than the number of IYD End-Users and Net
Identity End-Users ; provided that if the number of Migrated End-Users is
greater than the number of IYD End-Users and Net Identity End-Users, TUCOWS
shall be credited with the amount that HOSTOPIA would have been obligated to
pay TUCOWS for such Migrated End-Users in accordance with this Agreement; plus

 

(e)                                  the amount that HOSTOPIA has paid TUCOWS for the End-Users in
accordance with this Agreement to the extent that HOSTOPIA is unable to collect
any fees for the Services from the End-Users after exercising commercially
reasonable efforts to collect such fees provided that in the case of i)
End-Users who pay for the Services monthly, such End-Users have not, prior to
Closing, paid TUCOWS for at least 2 months and, ii) in the case of End-Users
who pay for the Services annually, such End-Users have not paid TUCOWS for at
least 1 year prior to Closing.

 

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“Billing Allowance”
means, so long as TUCOWS continues to invoice and collect fees from Net
Identity End-Users, an amount equal to 10% of the fees received by TUCOWS from
Net Identity End-Users;

 

“Customer Service Allowance”
so long as TUCOWS continues to provide customer service and support to Net
Identity End-Users, an amount equal to 30% of the fees received by TUCOWS or
HOSTOPIA during the period of time that customer service and support was
provided to Net Identity End-Users;

 

“Deferred Revenue” means the aggregate of all amounts previously invoiced by TUCOWS to
Domain Direct End-Users and IYD End-Users for the Services, which, as of the
last day of the most recently completed fiscal quarter of TUCOWS (being the
quarterly period ending March 31, 2008), had not been recognized as
revenue in accordance with GAAP, as set out in Schedule C.

 

“Hosting Allowance”
means so long as TUCOWS continues to host Net Identity End-Users on its
servers, an amount equal to 20% of the fees received by TUCOWS or HOSTOPIA
during the period of time that hosting services were provided to Net Identity
End-Users;

 

“Net Identity  Deferred Revenue” means the aggregate of
all amounts previously invoiced by TUCOWS to Net Identity End-Users for the
Services, which, as of the last day of the most recently completed fiscal
quarter of TUCOWS (being the quarterly period ending March 31, 2008), had
not been recognized as revenue in accordance with GAAP, as set out in Schedule
C.

 

“Pre-Closing Annualized Revenue” means A) all revenues (less all taxes, refunds or adjustments)
earned by TUCOWS in relation to providing the Services to the End-Users, as
such revenues were recognized by TUCOWS in accordance with GAAP during TUCOWS’
most recently completed fiscal quarter (being the quarterly period ending March 31,
2008), multiplied by B) 4, as set out in Schedule C.

 

5.                                      Assumed Liabilities

 

HOSTOPIA will not
assume any of the liabilities or obligations of TUCOWS of any nature or kind
whatsoever, contingent or otherwise, other than liabilities of TUCOWS related
to the Purchased Assets expressly assumed by HOSTOPIA herein (“Assumed Liabilities”).   For greater certainty, the Assumed
Liabilities shall include all obligations of TUCOWS to be performed after the
Closing Date under the End-User Agreements.

 

6.                                      Non-Solicitation/Non-Competition

 

During the period beginning on the Closing
Date and ending three years following the termination of the Shared Hosting
Marketing Agreement (as defined below), unless otherwise agreed in writing:

 

(a)                                  neither HOSTOPIA nor
TUCOWS will directly or indirectly solicit or hire any employees of the other
party (or such other party’s affiliates or subsidiaries) for employment, or any
undertaking with which such party is associated;

 

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(b)                                 TUCOWS shall not alone,
through any subsidiary, affiliate or joint venture or as a member, partner, or
agent of any partnership, or as an agent, member, stockholder (except
stockholder of not more than five percent (5%) of the outstanding stock of any
company listed on a national securities exchange or traded over the counter) or
as an investor in any corporation or other person or entity of any kind
whatsoever, directly or indirectly, sell or market to End-Users services that
are competitive with the Services of the Shared Webhosting Business.  Notwithstanding the foregoing, TUCOWS shall
be permitted to market webhosting services on behalf of HOSTOPIA and refer
customers to HOSTOPIA in accordance with the Shared Hosting Marketing Agreement
during its term.

 

7.                                      Closing

 

The parties intend
that the closing of the transaction provided for in this
Agreement
(“Closing”) will occur on May 15,
2008 (the “Closing Date”) or another date mutually satisfactory to both HOSTOPIA and TUCOWS,
subject to the fulfilment of all of the conditions precedent
set out in Section 9.

 

8.                                      Closing Deliveries

 

The parties shall take such actions and execute such
documents as are required to complete the transactions contemplated by this Agreement at the Closing, including those set forth below:

 

TUCOWS’ Closing
Deliveries. On or before the Closing Date, TUCOWS shall deliver or cause to
be delivered to HOSTOPIA the following:

 

(a)                                  a certificate of good
standing or similar certificate with respect to TUCOWS, dated as of the Closing
Date, such certificate to be issued by the Province of Nova Scotia, which
certificate shall indicate that TUCOWS is in good standing;

 

(b)                                 a general conveyance and
assumption of liabilities agreement substantially in the form of Schedule F
duly executed by TUCOWS, together with such other bills of sale or instruments
of conveyance, assignment or transfer as may be reasonably required by
HOSTOPIA, including assignment of the End-User Agreements in form acceptable to
HOSTOPIA;

 

(c)                                  consents to the
assignment of any contract under which consent is required executed by all
persons whose consent is required in form acceptable to HOSTOPIA;

 

(d)                                 a certificate of the
President or other senior officer of TUCOWS dated as of the Closing Date in the
form of Schedule G;

 

(e)                                  a certificate of the
Secretary or other officer of TUCOWS in the form of Schedule H;

 

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(f)                                    the shared hosting
marketing agreement (the “Shared Hosting  Marketing Agreement”) duly executed by TUCOWS attached
hereto as Schedule I.

 

(g)                                 the trade-mark license
agreement (“Trade-Mark License Agreement”)
duly executed by TUCOWS attached hereto as Schedule J;

 

(h)                                 the license agreement
relating to Net Identity Services (“Net Identity License
Agreement”) attached hereto as Schedule K.

 

(i)                                     good and marketable
title to and exclusive possession of the Purchased Assets, free and clear of
any and all Encumbrances; and

 

(j)                                     all deeds of conveyance,
bills of sale, assurances, transfers, assignments, consents, and such other
agreements, documents and instruments as may be reasonably required by HOSTOPIA
to complete the transactions provided for in this Agreement.

 

HOSTOPIA’s Closing
Deliveries. At the Closing, HOSTOPIA shall deliver or cause to be delivered
to TUCOWS the following:

 

(a)                                  payment to TUCOWS of the
amounts due on Closing pursuant to Section 4;

 

(b)                                 a general conveyance and
assumption of  liabilities agreement
substantially in the form of Schedule F duly executed by HOSTOPIA; and

 

(c)                                  the Shared Web Hosting
Marketing Agreement duly executed by HOSTOPIA attached hereto as Schedule I.

 

9.                                      Conditions of Closing

 

The closing of
this transaction is subject to the following conditions precedent in favour of
HOSTOPIA, which conditions may be waived by HOSTOPIA in its sole discretion:

 

(a)                                  HOSTOPIA shall be
satisfied with its due diligence investigations, provided that this condition
shall be deemed to be waived by HOSTOPIA unless HOSTOPIA otherwise notified
TUCOWS on or before May 9, 2008;

 

(b)                                 All Purchased Assets
shall have been sold, assigned and transferred to HOSTOPIA by TUCOWS free and
clear of all Encumbrances;

 

(c)                                  To the extent that any
websites, data or information of End-Users are required to be hosted on
HOSTOPIA’s servers, such information shall have been hosted on HOSTOPIA’s
servers;

 

(d)                                 The Board of Directors
of each of HOSTOPIA and TUCOWS shall have approved the purchase of the Shared
Webhosting Business by HOSTOPIA;

 

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(e)           TUCOWS and HOSTOPIA shall have
entered into the Shared Web Hosting Marketing Agreement;

 

(f)            TUCOWS shall have granted HOSTOPIA
a fully paid-up license in connection with the Purchased Assets to use the
words a) “domaindirect” and b) “netidentity” in accordance with the License
Agreement;

 

(g)           TUCOWS and HOSTOPIA shall have
entered into the Net Identity License Agreement.

 

(h)           All of TUCOWS’ contractual rights
and obligations relating to the Shared Webhosting Business, including all
End-User Agreements, shall have been assigned to and assumed by HOSTOPIA;

 

(i)            All requisite governmental and
regulatory approvals of, exemptions from and consents required to consummate
this Agreement shall have been obtained and all waiting periods prescribed by
law shall have expired;

 

(j)            TUCOWS shall have obtained all
necessary consents and approvals to the transfer of any contracts, licenses and
other instruments being transferred which HOSTOPIA considers material to the
Shared Webhosting Business;

 

(k)           There shall have been no material
adverse change to the Shared Webhosting Business since March 31, 2008 and
the Shared Webhosting Business shall have been carried on in the ordinary
course;

 

(l)            TUCOWS shall have delivered the
Financial Information relating to the Shared Webhosting Business;

 

(m)          TUCOWS shall have delivered all
records of the Shared Webhosting Business, and all of the schedules attached
hereto shall have been completed and updated, to HOSTOPIA’s satisfaction;

 

(n)           TUCOWS shall have provided to
HOSTOPIA evidence satisfactory to HOSTOPIA that the bulk sales legislation in
each state or province in which the Purchased Assets are located has been
complied with or that the sale of the Purchased Assets is exempt from
compliance with such legislation.

 

(o)           All documents set out in Section 8
to be delivered by TUCOWS shall have been delivered; and

 

The closing of this transaction is subject to the following
conditions precedent in favour of TUCOWS, which conditions may be waived by
TUCOWS in its sole discretion:

 

(a)           TUCOWS shall have received payment
of all amounts due from HOSTOPIA under this Agreement on or before Closing;

 

8

 

(b)           All documents set out in Section 8
to be delivered by HOSTOPIA shall have been delivered;

 

(c)           All of TUCOWS’ contractual rights
and obligations relating to the Shared Webhosting Business, including all
End-User Agreements, shall have been assigned to and assumed by HOSTOPIA.

 

10.                               Representations and Warranties

 

TUCOWS represents
and warrants to HOSTOPIA (which representations and warranties shall survive
for a period that begins on the date this Agreement is signed and ends two (2) years
following the Closing Date), as follows, and confirms that HOSTOPIA is relying
upon the accuracy of such representations and warranties in connection with the
purchase of the Purchased Assets and the completion of the other transactions
contemplated hereunder:

 

(a)                                 Corporate
Authority and Binding Obligation.  TUCOWS has good right,
full corporate power and absolute authority to enter into this Agreement and to
sell, assign and transfer the Purchased Assets to HOSTOPIA in the manner
contemplated herein and to perform all of TUCOWS’ obligations under this
Agreement.  TUCOWS and its respective
shareholders and board of directors have taken all necessary or desirable
actions, steps and corporate and other proceedings to approve or authorize,
validly and effectively, the entering into, and the execution, delivery and
performance of, this Agreement and the sale and transfer of the Purchased
Assets by TUCOWS to HOSTOPIA.  This
Agreement is a legal, valid and binding obligation of TUCOWS, enforceable
against TUCOWS in accordance with its terms.

 

(b)                                No
Other Purchase Agreements.  No person or entity has
any agreement, option, understanding or commitment, or any right or privilege
(whether by law, pre-emptive or contractual) capable of becoming an agreement,
option or commitment, for the purchase or other acquisition from TUCOWS of any
of the Purchased Assets, or any rights or interest therein.

 

(c)                                 Contractual
and Regulatory Approvals. TUCOWS is not under any material obligation, contractual or
otherwise, to request or obtain the consent of any person, and no permits,
licences, certifications, authorizations or approvals of, or notifications to,
any federal, state, municipal or local government or governmental agency,
board, commission or authority are required to be obtained by TUCOWS:

 

(i)            in connection with the execution,
delivery or performance by TUCOWS of this Agreement or the completion of any of
the transactions contemplated herein;

 

(ii)           to
avoid the loss of any material permit, licence, certification or other
authorization relating to the Shared Webhosting Business; or

 

(iii)          in order that the authority of HOSTOPIA
to carry on the Shared Webhosting Business in all material respects in the
ordinary course and in

 

9

 

the same manner as
presently conducted remains in good standing and in full force and effect as of
and following the closing of the transactions contemplated hereunder.

 

(d)                                Status
and Governmental Licences

 

(i)            TUCOWS is a corporation duly
incorporated and validly subsisting in all respects under the laws of its
jurisdiction of incorporation.  TUCOWS
has all necessary corporate power to own its properties and to carry on its
business as it is now being conducted.

 

(ii)           TUCOWS holds all necessary
licences, registrations and qualifications to carry on the Shared Webhosting
Business in each jurisdiction in which:

 

(A)          it owns any of the Purchased
Assets; or

 

(B)          the
nature or conduct of the Shared Webhosting Business or any part thereof, or the
nature of the Purchased Assets or any part thereof, makes such qualification
necessary to enable the Shared Webhosting Business to be carried on as now
conducted or to enable the Purchased Assets to be owned and operated.

 

(e)                                 Compliance
with Constating Documents, Agreements and Laws. 
The execution, delivery and performance of this Agreement and the
completion of the transactions contemplated herein, will not constitute or
result in a violation, breach or default, under:

 

(i)            any term or provision of any of the
articles, by-laws or other constating documents of TUCOWS; or

 

(ii)           the terms of any indenture,
agreement (written or oral), instrument or understanding or other obligation or
restriction to which TUCOWS is a party or by which it is bound.

 

(f)            Financial
Information.  The Financial Information has been prepared
in accordance with GAAP, applied on a basis consistent with that of the
previous fiscal years, is true, correct and complete in all material respects
and presents fairly the revenues of the Shared Web-Hosting Business during the
periods specified therein.

 

(g)           All Material
Liabilities.  There are no liabilities (contingent or
otherwise) of TUCOWS of any kind whatsoever in respect of which HOSTOPIA may
become liable on or after the consummation of the transactions contemplated by
this Agreement, except the Assumed Liabilities.

 

(i)            Absence of
Certain Changes or Events.  Since March 31,
2008, and except in connection with the actions by TUCOWS to sell the Shared
Webhosting Business, TUCOWS has:

 

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(i)            operated the Shared Webhosting
Business only in the ordinary course thereof, consistent with past practices;

 

(ii)           not created any Encumbrance upon
any of the Purchased Assets;

 

(iii)          not made any material change in the
method of billing customers or the credit terms made available by the Shared
Webhosting Business to customers;

 

(iv)          not made any material change with
respect to any method of management, operation or accounting in respect of the
Shared Webhosting Business;

 

(v)           not amended the revenue recognition
policy with respect to the Shared Webhosting Business to accelerate the
recognition of any development, disposition, incentive, performance or similar
fees payable under the End-User Agreements;

 

(vi)          not suffered any damage,
destruction or loss (whether or not covered by insurance) relating to the
Shared Webhosting Business which has materially adversely affected or could
materially adversely affect the Shared Webhosting Business;

 

(vii)         not entered into or amended any
material agreement relating to the Shared Webhosting Business;

 

(viii)        not suffered any extraordinary loss
relating to the Shared Webhosting Business;

 

(ix)          not made or incurred any material
change in, or become aware of any event or condition which is likely to result
in a material change in, the  Shared
Webhosting Business or its relationships with its customers or suppliers; or

 

(x)           not authorized, agreed or otherwise
become committed to do any of the foregoing.

 

(i)            Tax Matters.  TUCOWS has paid all Governmental Charges
which are due and payable by it on or before the date hereof. There are no
actions, suits, proceedings, investigations, enquiries or claims now pending or
made or threatened against TUCOWS in respect of Governmental Charges.  TUCOWS has withheld from each amount paid or
credited to any person or entity the amount of Governmental Charges required to
be withheld therefrom and has remitted such Governmental Charges to the proper
tax or other receiving authorities within the time required under applicable
legislation.

 

(j)            Litigation.  There are no actions, suits or proceedings,
judicial or administrative (whether or not purportedly on behalf of TUCOWS)
threatened or pending against, or, by or against or affecting TUCOWS which
relate to the Shared

 

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Webhosting
Business, at law or in equity, or before or by any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign.

 

(k)                                 Title
to Assets.  TUCOWS is the owner of and has good and
marketable title to all of the Purchased Assets, free and clear of
Encumbrances.  No other person owns or
has any Encumbrance against the Purchased Assets.

 

(l)                                    Intellectual
Property.
Schedule  D  lists and contain a description of all of the Intellectual
Property.

 

(m)          Partnerships or
Joint Ventures.  TUCOWS is not, in relation to any part of the
Shared Webhosting Business, a partner or participant in any partnership, joint
venture, profit-sharing arrangement or other association of any kind and is not
party to any agreement under which TUCOWS agrees to carry on any part of the
Shared Webhosting Business in such manner or by which TUCOWS agrees to share
any revenue or profit of the Shared Webhosting Business with any other person
or entity.

 

(n)           Restrictions on
Doing Business.  TUCOWS is not subject to any judgment, order
or requirement of any court or governmental authority which is not of general
application to persons carrying on a business similar to the Shared Webhosting
Business.

 

(o)                                Outstanding
Agreements.  TUCOWS is not a party to or bound by any
outstanding or executory agreement, contract or commitment, whether written or
oral, relating to the Shared Webhosting Business, except for the End-User
Agreements.

 

(p)                                Good
Standing of Agreements.  TUCOWS is not in material
default or breach of any of its obligations under any one or more of the
End-User Agreements or other agreements or obligations forming part of the
Purchased Assets, and there exists no state of facts which, after notice or
lapse of time or both, would constitute such a default or breach.  All of the End-User Agreements or other
agreements or obligations forming part of the Purchased Assets, are now in good
standing and in full force and effect without amendment thereto, TUCOWS is
entitled to all benefits thereunder and the other parties to such contracts,
agreements, commitments, indentures and other instruments are not in default or
breach of any of their material obligations thereunder.  There are no contracts, agreements,
commitments, indentures or other instruments relating to the Shared Webhosting
Business under which TUCOWS’ rights or the performance of its respective
obligations are dependent upon or supported by the guarantee of or any security
provided by any other person.

 

(q)           Compliance with
Laws.  In relation to the Shared Webhosting Business,
TUCOWS is not in violation in any material respect of any federal, state or
other law, regulation or order of any government or governmental or regulatory
authority, domestic or foreign.

 

12

 

(r)                                   All
Material Agreements.  There are no material
agreements that are necessary to enable HOSTOPIA to carry on the Shared
Webhosting Business in the same manner and to the same extent as it has been
carried on by TUCOWS prior to the date hereof.

 

(s)                                 Complete
Conveyance.  The assets included in the Purchased Assets
constitute all of the material assets of TUCOWS used in carrying on the Shared
Webhosting Business.  The Purchased
Assets include all rights, properties, interests, assets and agreements
necessary to enable HOSTOPIA to carry on the Shared Webhosting Business in the
same manner and to the same extent as it has been carried on by TUCOWS prior to
the date hereof.

 

(t)            Copies of
Documents.  Complete and correct copies (including all
amendments) of all contracts, leases and other documents referred to in this
Agreement or any schedule hereto or required to be disclosed hereby have been
made available to HOSTOPIA.

 

11.                               Covenants

 

TUCOWS covenants to HOSTOPIA that it will do or cause
to be done the following during the period A) beginning on the date this
Agreement was signed and ending on the Closing Date (“Interim
Period”), or B) after the Closing Date, as indicated below:

 

(a)                                  Investigation of Business and Examination
of Documents. 
TUCOWS will provide access to and will permit HOSTOPIA, through its
representatives, to make such investigation of the operations, properties,
assets, databases and records of the Shared Webhosting Business and of its
financial and legal condition as HOSTOPIA deems necessary or advisable to
familiarize itself with such operations, properties, assets, records and other
matters and to facilitate the transfer of the Purchased Assets.  Such investigations and inspections shall not
mitigate or affect the representations and warranties of TUCOWS hereunder,
which shall continue in full force and effect.

 

(b)                                 Conduct of Business.  Except as contemplated by
this Agreement or with the prior written consent of HOSTOPIA, TUCOWS will:

 

(i)            promptly advise HOSTOPIA of any
facts that come to its attention which would cause any of TUCOWS’
representations and warranties herein contained to be untrue in any respect;

 

(ii)           promptly advise HOSTOPIA in writing
of any material adverse change in the Shared Webhosting Business;

 

(iii)          not amend the revenue recognition
policy with respect to the Shared Webhosting Business to accelerate the
recognition of any development, disposition, incentive, performance or similar
fees payable under the End-User Agreements;

 

13

 

(iv)                              not
create, incur or assume any Encumbrance upon, or dispose of, any of the
Purchased Assets;

 

(v)                                 not
terminate or waive any right of substantial value of the Shared Webhosting
Business; and

 

(vi)                              not
enter into or amend any material agreement relating to the Shared Webhosting
Business.

 

(c)                                  Transfer of Purchased Assets.  On or before the Closing Date, TUCOWS will
cause all necessary steps and corporate proceedings to be taken in order to
permit the Purchased Assets to be duly and properly transferred to HOSTOPIA.

 

(d)                                 Exclusivity.  TUCOWS agrees that, notwithstanding the
earlier termination of this agreement, prior to the Closing Date it will not,
directly or through its representatives or agents, solicit any offer, entertain
any offer or otherwise discuss or deal with any party other than HOSTOPIA with
respect to any competing transaction, the sale of TUCOWS’ assets or the sale of
the shares of TUCOWS.

 

(e)                                  Payment of Adjustment. TUCOWS shall pay
HOSTOPIA an amount equal to the Adjustment, no later than 90 days following the
Closing Date.

 

(f)                                    TUCOWS
will provide all relevant information in a timely fashion and reasonably assist
HOSTOPIA in all efforts to host the Migrated End-Users on HOSTOPIA’s servers on
or before the date that is 90 days following the Closing Date.

 

12.                               Indemnity

 

TUCOWS shall indemnify HOSTOPIA from and against, all obligations,
damages, commitments and liabilities of, and claims against, HOSTOPIA arising
from:

 

(a)                                  the
breach of any of the terms of this Agreement by TUCOWS;

 

(b)                                 all
liabilities in respect of all indebtedness of TUCOWS to all persons;

 

(c)                                  all
liability claims relating to the End-User Agreements prior to the Closing Date;

 

(d)                                 all
liability claims relating to any service performed prior to the Closing Date;

 

(e)                                  all
liabilities for all taxes, duties, levies, assessments and other such charges,
including any penalties, interests and fines with respect thereto, payable by
TUCOWS to any federal, state, municipal or other government or governmental
agency, authority, board, bureau or commission, domestic or foreign, including,
without limitation, any taxes in respect of or measured by the sale,
consumption or performance by TUCOWS of any product or service prior to the
Closing Date

 

14

 

and any tax in respect of all remuneration payable to
all persons employed in the Shared Webhosting Business prior to the Closing
Date;

 

(f)                                    any
and all claims of unsecured trade creditors or secured trade creditors of
TUCOWS existing at the time of the Closing Date or any action or proceeding to
set aside the sale of the Purchased Assets or to have the sale declared void
for non-compliance with any bulk sales legislation;

 

(g)                                 all
liabilities for salary, bonus, vacation pay and other compensation and all
liabilities under benefit plans of TUCOWS as well as severance payments,
damages for wrongful dismissal and all related costs in respect of the
termination by TUCOWS of any employee of the Shared Webhosting Business
relating to employment of all persons in the Shared Webhosting Business prior
to the Closing Date.

 

HOSTOPIA shall
indemnify TUCOWS from and against, all obligations, damages, commitments and
liabilities of, and claims against, TUCOWS arising from:

 

(a)                                  the
breach of any of the terms of this Agreement by HOSTOPIA;

 

(b)                                 HOSTOPIA’s
operation of the Shared Webhosting Business after the Closing Date; and

 

(c)                                  the
Assumed Liabilities.

 

13.                               Limitations of Liability

 

Notwithstanding any other provision of this Agreement or any other agreement,
certificate of other documents made or delivered in order to carry out the
transactions contemplated hereby, the maximum liability of any party to this
Agreement under any claim, proceeding or action which may be brought by one
party against another (including its officers, directors or employees) as a
result of any non-fulfillment of any covenant or agreement under this
Agreement, or any incorrectness or breach of any representation or warranty
contained herein, shall be limited to the aggregate sums of the payments
provided to TUCOWS by HOSTOPIA hereunder.

 

14.                               Confidentiality

 

Except as and to
the extent required by law, HOSTOPIA shall not disclose or use, and it shall
cause its officers, directors, employees, agents and other representatives not to
disclose or use, any Confidential Information (as defined below) with respect
to TUCOWS and its Shared Webhosting Business furnished, or to be furnished, by
any representative of TUCOWS, at any time or in any manner, except for its use
in connection with its evaluation of the Purchased Assets.  For purposes of this Agreement, “Confidential Information” means any
information about TUCOWS and its Business whether communicated in written form,
verbally, visually, technically or pursuant to any other media, and whether or
not such information (if disclosed in

 

15

 

writing) is marked “confidential”.
The term “Confidential Information” shall not be deemed to include information
which HOSTOPIA can demonstrate:  (i) is
generally available to or known by the public other than as a result of
improper disclosure by HOSTOPIA or any of its representatives or (ii) is
obtained by HOSTOPIA from a source other than TUCOWS or any of its
representatives bound by a duty of confidentiality to TUCOWS, provided that
such source was not bound by a duty of confidentiality to TUCOWS.

 

15.                               Disclosure/Public Announcements

 

Neither TUCOWS,
HOSTOPIA nor anyone on behalf of TUCOWS or HOSTOPIA will make any public
announcement concerning the transactions contemplated herein or related
negotiations without the other parties’ prior written approval, except as may
be required by law.  Where such an
announcement is required by law prior to or following the Closing Date, the
party required to make the announcement will inform the other parties of the
contents of the announcement proposed to be made and will use its reasonable
efforts to obtain the other parties approval for the announcement, which
approval may not be unreasonably withheld.

 

16.                               Non-Solicitation of Employees

 

In the event that
this agreement is terminated prior to the Closing Date for any reason, TUCOWS
and HOSTOPIA agree not to, directly or indirectly, solicit for employment or
hire employees of the other party for a period of one (1) year from the
date of this Agreement.

 

17.                               Responsibility for Fees and Costs

 

TUCOWS and HOSTOPIA
shall each be responsible for their own internal costs and legal, accounting
and other professional fees incurred in connection herewith, the negotiation, preparation
and execution of the Definitive Agreement, or otherwise relating to the
transactions proposed herein. HOSTOPIA shall not incur any obligation for any
finder’s, broker’s or agent’s fee in connection with the transactions
contemplated hereby.

 

18.                               Termination

 

(a)                                 This
Agreement shall be at an end if any of the conditions precedent listed in Section 9
are not completed or waived by HOSTOPIA or TUCOWS, as applicable, in its sole
discretion, on or before the Closing Date.

 

(b)                                In the
event of termination of this Agreement, the confidentiality obligations set out
in Section 14 hereof shall continue to be binding on the parties hereto.

 

19.                               General

 

(a)                                  Waiver.  No party will be deemed to have waived the
exercise of any right that it holds under this Agreement unless such waiver is
made in writing.  No waiver made with
respect to any instance involving the exercise of any such right will be deemed
to be a waiver with respect to any other instance involving the exercise of the
right or with respect to any other such right.

 

16

 

(b)                                 Counterparts.  This Agreement may be executed in any number
of counterparts, and all such counterparts taken together shall be deemed to
constitute one and the same instrument. 
This Agreement may be executed by facsimile or electronic signature.

 

(c)                                  Severability.  If any provision of this Agreement or the
application of such provision to any party or person or circumstance shall be
held illegal, invalid, or unenforceable, the remainder of this Agreement, or
the application of such provision to a party or person or circumstance other
than those as to which it is held illegal, invalid, or unenforceable shall not
be affected thereby.  Each provision of
this Agreement is intended to be severable, and if any provision is illegal,
invalid or unenforceable in any jurisdiction, this will not affect the
legality, validity or enforceability of such provision in any other
jurisdiction or the validity of the remainder of this Agreement.

 

(d)                                 Governing Law.  This Agreement will be interpreted and
enforced in accordance with the laws of the Province of Ontario, Canada.

 

17

 

IN WITNESS WHEREOF the
parties hereto have signed this Agreement.

 

	
   

  	
  HOSTOPIA.COM INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
   /s/ C. Campbell

  
	
   

  	
   

  	
   C. Campbell

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TUCOWS.COM CO.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Per:

  	
   /s/ Elliot Noss

  
	
   

  	
   

  	
   Elliot Noss

   President and CEO

  
					

 

18ex10-1.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
10.1

    EMPLOYMENT
AGREEMENT

     

    This
Employment Agreement ("Agreement"), executed on this 9th day of
May,  2008, by and between IPG Photonics Corporation, a Delaware
corporation having an office at 50 Old Webster Road, Oxford, MA 01540 (the
"Corporation"), and Valentin P. Gapontsev ("Executive").  The
Corporation and Executive are referred to jointly below as the
"Parties."

     

    WHEREAS,
the Corporation and Executive previously entered into an employment agreement
dated March 1, 2006 (the "Prior Agreement");

     

    WHEREAS,
the Corporation and Executive desire to amend and restate the Prior Agreement to
comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code"); and

     

    WHEREAS,
the Corporation desires to continue to employ Executive and Executive desires to
continue his employment with the Corporation on the terms and conditions set
forth in this Agreement.

     

    NOW,
THEREFORE, in consideration of the employment of Executive, the mutual
terms and conditions set forth below, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties agree
as follows:

     

    1.           Employment.  Executive
will be employed by the Corporation in the position of Chief Executive
Officer.  Executive will report to the Corporation’s Board of
Directors (the "Board").  Executive's primary responsibility will be
executive management of the business and affairs of the Corporation and its
subsidiaries.  Executive will carry out such duties as shall be
assigned from time to time by the Corporation’s Board of Directors, subject to
applicable laws, and ethical duties.  During the Employment Period (as
defined below), Executive shall devote Executive's reasonable best efforts,
energies and abilities and Executive's full business time, skill and attention
to the business and affairs of the Corporation, and shall act at all times
according to the highest professional standards, for the purpose of advancing
the business of the Corporation.

    

     

    2.           Term.  Subject
to the Termination provisions below, Executive's employment by the Corporation
shall commence on the first day of the fiscal quarter including the date of
execution of this Agreement (the "Effective Date") and shall terminate at 5:00pm
E.S.T. on December 31, 2010 (the "Employment Period"); provided that, in the
event of a "Change of Control" of the Corporation (as such term is defined in
the Corporation's 2006 Incentive Compensation Plan in effect on the Effective
Date (the "Equity Plan")), the Employment Period automatically will be extended
until the second anniversary of the Change in Control.

     

    3.           Compensation.

     

    (i)           Salary.  The
Corporation shall pay to Executive an annual base salary ("Base Salary") of
three hundred and eighty thousand dollars (U.S. $380,000) effective as of the
Effective Date.  The Corporation will pay Executive's Base Salary in
equal installments in accordance with the Corporation's standard payroll
policies and schedule, subject to tax and elective withholding and
deductions.  Thereafter, the Board, or such committee of the Board as
is responsible for setting the compensation of senior executive officers, shall
review Executive's performance and Base Salary annually in January of each year,
in light of competitive data, the Corporation's performance, and Executive's
performance, and determine whether to increase Executive's Base Salary on a
prospective basis.  The first review shall be in January
2009.  Such adjusted annual salary then shall become Executive's "Base
Salary" for purposes of this Agreement.

     

    (ii)           Annual
Bonus.  Executive will be eligible for an annual cash bonus
(the "Bonus"), based on performance, and calculated as a percentage of
Executive's Base Salary.  The Corporation intends that the Bonus will
be paid within 21⁄2 months of the close of the calendar year in which Executive
becomes vested in such Bonus, to qualify for the short-term deferral exception
to Code Section 409A.

     

    (iii)           Equity
Compensation.  Executive will be eligible to participate in any
long-term incentive plans, and/or equity-based compensation plans established or
maintained by the Corporation for its senior executive officers or employees,
including, but not limited to, the Equity Plan.

     

    4.           Benefits.

     

    (i)           Executive
shall be entitled to the extent eligible to participate in any benefit plans as
may be adopted and modified by the Corporation from time to time, including
without limitation health, dental and medical plans, life and disability
insurance, paid time off, holiday, and retirement plans.  The benefits
available to Executive shall be no less favorable than those available to other
executives at similar levels within the organization or to the employees of the
Corporation at the location where Executive works.  Benefits provided
under this Agreement shall be subject to the terms and conditions of any
applicable benefit plan, including any eligibility and vesting requirements, as
such plans may be in effect from time to time.

     

    (ii)           Executive
shall be entitled to four weeks vacation each year.  The maximum
number of accrued vacation hours that Executive can have at any point in time is
equal to the total vacation hours earned in the last twelve months, plus one
week of vacation carried over from the prior twelve months of
service.

     

    5.           Other
Activities.  The employment of Executive shall be on a
full-time basis, but Executive may be an investor or otherwise have an interest
in or serve on the board of directors or advisory board to other businesses,
partnerships and entities so long as the other activities of Executive do not
materially interfere with the performance of Executive's duties to the
Corporation, and so long as such other activities do not cause Executive to
violate the Restrictive Covenants incorporated herein in Section 12 of this
Agreement, and so long as Executive discloses all such activities to the Chief
Executive Officer and the Board.  Nothing in this provision or this
Agreement limits or restricts Executive's duties and obligations, including the
duty of loyalty, that arise under the law.

     

    6.           Termination by the
Corporation.  The Corporation may terminate the Employment
Period:

     

    (i)           without
Cause (as defined below) by giving Executive sixty (60) days' prior written
notice, or

     

    (ii)           for
Cause (as defined below).  "Cause" shall mean: (A) an act of fraud,
embezzlement or theft by Executive in connection with Executive's duties or in
the course of Executive's employment with the Corporation; (B) Executive's
intentional wrongful damage to the property of the Corporation; (C) Executive's
intentional breach of Section 12 hereof while Executive remains in the employ of
the Corporation; (D) an act of Gross Misconduct (as defined below); or (E) a
felony conviction or a conviction for a misdemeanor involving moral turpitude;
and, in each case, the reasonable, good faith determination by the Board as
hereafter provided that any such act shall have been materially harmful to the
Corporation.  For purposes of this Agreement, "Gross Misconduct" shall
mean a willful or grossly negligent act or omission which has or will have a
material and adverse impact on the business or reputation of the Corporation, or
on the business of the Corporation's customers or suppliers as such relate to
the Corporation.  Notwithstanding the foregoing, Executive shall not
be deemed to have been terminated for "Cause" hereunder unless and until there
shall have been delivered to Executive a copy of a resolution duly adopted by
the affirmative vote of a majority of the independent directors of the Board
then in office at a meeting of the Board called and held for such purpose,
finding that, Executive has committed an act set forth above in this Section
6.  Nothing herein shall limit Executive's right or Executive's
beneficiaries' right to contest the validity or propriety of any such
determination. In addition, Executive's employment shall be deemed to have
terminated for Cause if, based on facts and circumstances discovered after
Executive's employment has terminated, the Board determines in good faith after
appropriate investigation that Executive committed an act during the Employment
Period that would have justified a termination for Cause.  In
addition, Executive’s employment shall be deemed to have terminated for Cause,
if based on facts and circumstances discovered after Executive’s employment has
terminated, the Board determines in reasonable good faith, within one year after
Executive’s employment terminated, and after appropriate investigation and an
opportunity for Executive to be interviewed (with or without counsel as
Executive may determine) by a subcommittee of the independent Board members or
its representative, that Executive committed an act during the Employment Period
that would have justified a termination for Cause.

     

    

    7.           Termination by
Executive.  Executive may terminate the Employment Period (i)
by giving the Corporation sixty (60) days' prior written notice, or (ii) for
Good Reason (as defined below); provided, however, that in the event Executive
terminates the Employment Period for Good Reason, Executive must give the
Corporation written notice of his intent to terminate for Good Reason within
sixty (60) days of the occurrence of the event that allegedly constitutes Good
Reason.  The Corporation shall have a right to cure the breach for a
period of thirty (30) days after notice from Executive of his intention to
terminate for Good Reason.  In the event of termination by notice
under the preceding subsection (i), the Corporation in its discretion may elect
a termination date that is earlier than the conclusion of the sixty (60) day
notice period, but in the event of such election the termination shall still be
deemed a voluntary termination by Executive under this Section.  "Good
Reason" means the occurrence of any of the following events without Executive's
express written consent:

     

    (a)           The
material reduction of Executive's authorities, duties, or responsibilities with
the Corporation;

     

    (b)           A
material reduction by the Corporation of Executive's Base Salary, other than a
reduction approved by the Board that similarly applies to all executive officers
of the Corporation, provided that a reduction in Base Salary shall not exceed
more than 10% of then Base Salary;

     

    (c)           A
relocation of the offices of Executive to a place greater than thirty-five (35)
miles in distance from the current executive offices of the Corporation in
Oxford, MA;

     

    (d)           A
material reduction in the budget over which Executive retains authority;
or

     

    (e)           Any
action or inaction that constitutes a material breach by the Corporation of this
Agreement.

     

    The
Corporation shall have no obligations to Executive after Executive's last day of
employment following termination of employment under this Section, except as
specifically set forth in this Agreement or under any applicable plans, programs
or arrangements of the Corporation including, without limitation, the
Corporation’s certificate of incorporation or By-Laws, the Equity Plan and any
agreements thereunder and the indemnification agreement described in Section
4.

     

    8.           Automatic
Termination.  Notwithstanding the provisions of Section 2,
Executive's employment shall automatically terminate upon Executive's death or
Disability (as defined below).  Executive shall be deemed to have a
"Disability" for purposes of this Agreement if Executive is unable to
substantially perform, by reason of physical or mental incapacity, Executive's
duties or obligations under this Agreement, with or without reasonable
accommodation as defined in the Americans with Disabilities Act and implementing
regulations, for a period of one hundred and eighty (180) consecutive days in
any 360-day period.  The Board shall determine, according to the facts
then available, whether and when the disability of Executive has occurred and
shall state that date of termination in the Notice of
Termination.  Such determination shall be made by the Board in the
good faith exercise of its reasonable discretion.

     

    9.           Expiration of
Agreement.  The Employment Period shall terminate in accordance
with Section 2 if not earlier terminated pursuant to Section 6, 7 or
8.

     

    10.           Certain Obligations of the
Corporation Following Termination of the Employment
Period.  Following termination of the Employment Period under
the circumstances described below, the Corporation will pay to Executive the
following compensation and provide the following benefits in addition to any
benefits to which Executive may be entitled by law in full satisfaction and
final settlement of any and all claims and demands that Executive or the
Corporation may have against the other under this Agreement:

     

    (i)           Termination of Employment
for Any Reason.  In the event of a termination of the
Employment Period for any reason, the Corporation shall pay or provide Executive
(a) any unpaid Base Salary through the date of termination and (b) any benefits
(including, without limitation, any unused vacation accrued in accordance with
Section 4(ii)) accrued, earned or vested, and any unreimbursed expenses
incurred, up to and including the effective date of such termination to which
Executive may be entitled under the terms of any applicable arrangement, plan or
program (collectively, the "Accrued Amounts").

     

    (ii)           Without Cause by the
Corporation or for Good Reason by Executive.  In the event that
the Employment Period is terminated by the Corporation without Cause pursuant to
Section 6(i) hereof or by Executive for Good Reason pursuant to Section 7
hereof, Executive shall be entitled to the following payments:

     

    (a)           The
Accrued Amounts, as soon as practicable following the date of
termination;

     

    (b)           Any
bonus that has been actually earned as of or prior to the termination date, but
has not been paid, payable in a single lump sum as soon as practicable following
the date of termination;

     

    (c)           A
pro rata portion of the amount, if any, Executive would have received pursuant
to Section 3(ii) for the year in which Executive's employment
terminated.  The Corporation shall determine what annual bonus, if
any, Executive would have earned had he been employed through the end of the
applicable period (the "Base Incentive
Amount"), in accordance with the methods used to calculate annual bonuses
for the Corporation's other similarly-situated executives.  The pro
rata portion to be paid  pursuant to this paragraph shall be
determined by multiplying the Base Incentive Amount by a fraction, the numerator
of which is the number of days from the beginning of the applicable annual
period in which the termination occurred through the date of termination and the
denominator of which is 365.  Any payment due under this paragraph
shall be paid at the time payment is made to other similarly-situated executives
of the Corporation; provided, however, that such payment shall be made in a
single lump sum payment no later than the last day of the calendar year
following the year in which Executive's employment terminates;

     

    (d)           Continuing
payments of Base Salary, payable in accordance with regular payroll practices of
the Corporation, for twenty-four months following the date of
termination;

     

    (e)           Continued
coverage under the Corporation's medical and dental plans for twelve months
following the date of termination.  Thereafter, Executive may elect
COBRA continuation coverage at Executive's expense.

     

    In the
event that the Employment Period is terminated by the Corporation without Cause
pursuant to Section 6(i) hereof or by Executive for Good Reason pursuant to
Section 7 hereof, for purposes of determining the vested portions of Executive's
stock options and any other equity compensation awards granted on or after the
date hereof, Executive shall be deemed to have terminated employment twelve (12)
months following the date of Executive's actual termination of
employment.

     

    In the
event that the Employment Period is terminated by the Corporation without Cause
pursuant to Section 6(i) hereof or by Executive for Good Reason pursuant to
Section 7 hereof and such termination occurs within twenty-four (24) months
following a Change of Control (as defined in the Equity Plan), all stock options
and any other equity compensation awards granted on or after this date hereof
and held by Executive on the date of termination shall immediately vest and
become non-forfeitable.

    

    (iii)           Termination by Executive
Without Good Reason or by the Corporation for Cause.  In the
event the Employment Period is terminated by Executive pursuant to Section 7(i)
hereof without Good Reason or by the Corporation pursuant to Section 6(ii)
hereof for Cause, Executive shall be entitled to no further compensation or
other benefits under this Agreement except for the Accrued Amounts, payable in a
single lump sum as soon as practicable following the date of
termination.

     

    (iv)           Death;
Disability.  In the event that the Employment Period is
terminated by reason of Executive's death or for Disability, Executive or
Executive's estate, as the case may be, shall be entitled to the following
payments:

     

    (a)           The
Accrued Amounts, as soon as reasonably practicable following the date of
termination;

     

    (b)           Any
bonus that has been actually earned as of or prior to the termination date, but
has not been paid, payable in a single lump sum as soon as practicable following
the date of termination; and

     

    (c)           The
amount payable, if any, as determined pursuant to Section 10(ii)(c), at the time
specified therein.

     

    In the
event that the Employment Period is terminated by reason of Executive’s death or
for Disability, the treatment of any equity compensation awards held by
Executive shall be governed by the terms of the plan or agreement under which
such awards were granted.

     

    (v)           Expiration.  In
the event the Employment Period terminates due to the expiration of the
Employment Period and the Corporation does not offer Executive continued
employment in the same or a substantially similar position as, or in a higher
position than, his position on the date of the expiration of the Employment
Period, and at a compensation level that is the same or a substantially similar
to that in effect on the date of the expiration of the Employment Period,
Executive shall be entitled to the following payments:

     

    (a)           The
Accrued Amounts, as soon as reasonably practicable following the date of
termination;

     

    (b)           Any
bonus that has been actually earned as of or prior to the termination date, but
has not been paid, payable in a single lump sum as soon as practicable following
the date of termination;

     

    (c)           The
amount payable, if any, as determined pursuant to Section 10(ii)(c) at the time
specified therein; and

     

    (d)           Continuing
payments of Base Salary, payable in accordance with regular payroll practices of
the Corporation, for twenty-four months following the date of
termination.

     

    Except as
provided in Section 10(i), Executive shall not be entitled to payment of the
amounts described in this subsection (v) if the Corporation offers Executive
continued employment in the same or a substantially similar position as, or in a
higher position than, his position on the date of expiration of the Employment
Period, and at a compensation level that is the same or a substantially similar
to that in effect on the date of the expiration of the Employment Period, and
Executive declines the offer.

     

    (vi)           No Mitigation or
Offset.  In the event of any termination of Executive’s
employment under this Section 10, Executive shall be under no obligation to seek
other employment or otherwise mitigate his damages, and there shall be no offset
against amounts due to Executive under this Agreement on account of any
remuneration or benefit attributable to any subsequent employment obtained by
Executive.

     

    11.           Nature of
Payments.  Upon termination of employment pursuant to Sections
6, 7, 8 or 9, Executive will be released from any duties and obligations to the
Corporation set forth in this Agreement (except the duties and obligations under
the Restrictive Covenants and as set forth in Section 12 hereof) and the
obligations of the Corporation to Executive under this Agreement will be as set
forth in Section 10.

     

    12.           Restrictive
Covenants.  In consideration of the benefits under this
Agreement, Executive has executed and delivered a Confidentiality,
Non-Competitive and Confirmatory Assignment Agreement, dated the date of this
Agreement (together with any similar or successor agreements, referred to herein
as the “Restrictive Covenants”), and Executive agrees that, as part of this
Agreement, Executive shall comply with the terms of the Restrictive
Covenants.  Notwithstanding Section 10(iii) of this Agreement, if (a)
Executive terminates employment other than for Good Reason and, thus, is not
entitled to the payments and benefits under Section 10(ii) of this Agreement,
and (b) (i) Executive receives a written offer of employment during the
Non-Competition Period set forth in Section 2(a) of the Restrictive Covenant, or
(ii) Executive is not able to find suitable employment in his field in relation
to his skills, position and base salary, which employment  would not
contravene Section 2(a) of the Restrictive Covenant, after a good faith effort
by Executive to search for such employment, and (iii) the Company notifies
Executive that it intends to enforce the non-compete provisions of such Section
2(a) against Executive, then the Company shall pay to Executive an amount equal
to the semi-monthly amount of the Executives’ Base Salary for each semi-monthly
payroll period beginning (A) on the effective date of the written offer of
employment referred to above or (B) during the period in which Executive is not
able to find suitable employment, and ending on the earliest to occur of (I) the
end of the Non-Competition Period set forth in such Section 2(a), or (II) the
date as of which Executive begins new employment with an employer, which
employment would not contravene Section 2(a) of the Restrictive
Covenant.  For the avoidance of doubt, the non-competition and other
provision of the Restrictive Covenants in all events shall continue to apply
until the end of the Non-Competition Period set forth in Section 2(a) of the
Restrictive Covenant, regardless of the Executive’s new employment with an
employer that would not contravene Section 2(a) of the Restrictive Covenant, the
subsequent termination of such employment or any other event.

    

    13.           Release.  Any
and all amounts payable and benefits or additional rights provided pursuant to
this Agreement beyond Accrued Amounts shall only be payable if Executive
delivers to the Corporation a release of claims of Executive occurring up to the
release date, in the form attached hereto as Exhibit A, within twenty-one (21)
calendar days after presentation thereof by the Corporation to
Executive.  The Corporation shall present such release to Executive
within thirty (30) days of the date Executive’s employment
terminates.  Payment of the amounts described in this Section shall
commence no earlier than eight (8) days following the date on which Executive
delivers to the Corporation an executed and enforceable release as described
herein.

     

    14.           Indemnification.  The
Corporation shall maintain a directors' and officers' liability insurance policy
covering Executive on the same basis as in effect for other senior executive
employees, and shall provide indemnity to Executive by a separate, written
indemnification agreement.

     

    15.           Notices.  Any
and all notices provided for herein shall be in writing and shall be delivered
by certified mail, return receipt requested or in person.  Notice
shall be deemed to have been given when notice is received by the party on whom
the notice was served.  Notice to the Corporation shall be addressed
to the Corporation at its principal office, and notice to Executive shall be
addressed to Executive at Executive's last address as shown on the records of
the Corporation.

     

    16.           Governing
Law.  This Agreement shall be governed by, construed and
enforced in accordance with the substantive laws of the Commonwealth of
Massachusetts, without regard to its internal conflicts of law
provisions.

     

    17.           Severability.  In
the event that any provision of this Agreement shall be determined to be
invalid, illegal or otherwise unenforceable or contrary to law or public policy,
the enforceability of the other provisions in this Agreement shall not affected
thereby.

     

    18.           Assignment.  Executive
recognizes that this is an agreement for personal services and that Executive
may not assign this Agreement.  The Agreement shall inure to the
benefit of and be binding upon the Corporation's successors and
assigns.

     

    19.           Entire
Agreement/Amendment.  This Agreement and the Restrictive
Covenant referred to in Section 12 constitute the entire agreement between the
Parties with respect to the subject matter hereof and supersedes any and all
other agreements, either oral or in writing (including the Prior Agreement),
among the Parties hereto with respect to the subject matter
hereof.  This Agreement may not be amended except by written agreement
signed by both Parties.

     

    20.           Execution in
Counterparts.  This Agreement may be executed in one or more
counterparts, and by the different Parties in separate counterparts, each of
which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement (and all signatures need not appear on any
one counterpart), and this Agreement shall become effective when one or more
counterparts has been signed by each of the Parties hereto and delivered to each
of the other Parties hereto.

     

    21.           Waiver.  The
failure of either of the Parties to at any time enforce any of the provisions of
this Agreement shall not be deemed or construed to be a waiver of any such
provision, nor to in any way affect the validity of this Agreement or any
provision hereof or the right of either of the Parties to enforce each and every
provision of this Agreement.  No waiver of any breach of any of the
provisions of this Agreement shall be effective unless set forth in a written
instrument executed by the party against whom or which enforcement of such
waiver is sought, and no waiver of any such breach shall be construed or deemed
to be a waiver of any other or subsequent breach.

     

    22.           Capacity.  Executive
and the Corporation hereby represent and warrant to the other
that:  (i) Executive or the Corporation has full power, authority and
capacity to execute and deliver this Agreement, and to perform Executive's or
the Corporation's obligations hereunder; (ii) such execution, delivery and
performance will not (and with the giving of notice or lapse of time or both
would not) result in the breach of any agreements or other obligations to which
Executive or the Corporation is a party or Executive or the Corporation is
otherwise bound; and (iii) this Agreement is Executive's or the Corporation's
valid and binding obligation in accordance with its terms.

     

    23.           Arbitration.  Any
controversy or claim arising out of or relating to this Agreement or the breach
thereof or otherwise arising out of Executive's employment or the termination of
that employment (including, without limitation, any claims of unlawful
employment discrimination whether based on age or otherwise) shall, to the
fullest extent permitted by law, be settled by arbitration in any forum and form
agreed upon by the parties or, in the absence of such an agreement, under the
auspices of the American Arbitration Association ("AAA") in Worcester,
Massachusetts in accordance with the Employment Dispute Resolution Rules of the
AAA, including, but not limited to, the rules and procedures applicable to the
selection of arbitrators.  In the event that any person or entity
other than Executive or the Employer may be a party with regard to any such
controversy or claim, such controversy or claim shall be submitted to
arbitration subject to such other person or entity's
agreement.  Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.  This Section 23
shall be specifically enforceable.  Notwithstanding the foregoing,
this Section 23 shall not preclude either party from pursuing a court action for
the sole purpose of obtaining a temporary restraining order or a preliminary
injunction in circumstances in which such relief is appropriate; provided that
any other relief shall be pursued through an arbitration proceeding pursuant to
this Section 23.  Punitive and consequential damages shall not be
permitted as an award and each party shall bear the fees and expenses of its own
counsel and expert witnesses.

     

    24.           Consent to
Jurisdiction.  To the extent that any court action is permitted
consistent with or to enforce Section 23 of this Agreement, the parties hereby
consent to the jurisdiction of the Superior Court of the Commonwealth of
Massachusetts and the United States District Court for the District of
Massachusetts.  Accordingly, with respect to any such court action,
Executive (a) submits to the personal jurisdiction of such courts; (b) consents
to service of process; and (c) waives any other requirement (whether imposed by
statute, rule of court, or otherwise) with respect to personal jurisdiction or
service of process.

     

    25.           Code Section
409A.  This Agreement is intended to comply with Code Section
409A and the interpretative guidance thereunder, including the exceptions for
short-term deferrals, separation pay arrangements, reimbursements, and in-kind
distributions, and shall be administered accordingly.  The Agreement
shall be construed and interpreted with such intent.  Each payment
under Section 10 of this Agreement or any Corporation benefit plan is intended
to be treated as one of a series of separate payments for purposes of Code
Section 409A and Treas. Reg. §1.409A-2(b)(2)(iii).  Any payment under
Section 10 that does not qualify as a short-term deferral under Code Section
409A and Treas. Reg. §1.409A-1(b)(4) or a limited payment under Treas. Reg.
§1.409A-1(b)(9)(v)(D) (or any similar or successor provisions) will not be made
before the date that is six (6) months after the date of termination or, if
earlier, the date of Executive's death (the "Six Month Delay Rule") if Executive
is a Specified Employee (as defined below) as of his Termination of
employment.  Payments to which Executive otherwise would be entitled
during the first six months following his Termination of employment (the
"Six-Month Delay") will be accumulated and paid on the first day of the seventh
month following his Termination of employment.  Notwithstanding the
Six-Month Delay Rule, to the maximum extent permitted under Code Section 409A
and Treas. Reg. §1.409A-1(b)(9)(iii) (or any similar or successor provisions),
during the Six-Month Delay and as soon as practicable after satisfaction of
Section 13 of this Agreement, the Corporation will pay Executive an amount equal
the lesser of (A) the total severance scheduled to be provided under Section 10
above, or (B) two times the lesser of (1) the maximum amount that may be taken
into account under a qualified plan pursuant to Code Section 401(a)(17) for the
year in which Executive's Termination of employment occurs, and (2) the sum of
Executive's annualized compensation based upon the annual rate of pay for
services provided to the Corporation for the taxable year of Executive preceding
the taxable year of Executive in which his Termination of employment occurs;
provided that amounts paid under this sentence will count toward, and will not
be in addition to, the total payment amount required to be made to Executive by
the Corporation under Section 10 above. For purposes of this Agreement, the term
"Specified Employee" has the meaning given to that term in Code Section 409A and
Treas. Reg. §1.409A-1(i) (or other similar or successor
provisions).  The Corporation's "specified employee identification
date" (as described in Treas. Reg. §1.409A-1(i)(3) or any similar or successor
provisions) will be December 31 of each year, and the Corporation's "specified
employee effective date" (as described in Treas. Reg. §1.409A-1(i)(4) or any
similar or successor provisions) will be April 1 of each succeeding
year.

     

    IN
WITNESS WHEREOF, this Employment Agreement has been duly
executed:

     

    IPG
PHOTONICS CORPORATION

    

    

    By:
________________________________                                                                /s/
Valentin P.
Gapontsev                  

    Its: Vice
President, General Counsel and
Secretary                                                                                                              Executive

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    RELEASE AND WAIVER
AGREEMENT

     

    

     

    This
Release and Waiver Agreement ("Agreement") is entered into this _____ day of
______________________, _____ by and between IPG Photonics Corporation, a
Delaware corporation (the "Corporation") and [insert executive name]
(hereinafter "Executive").

     

    WHEREAS,
Executive's employment with the Corporation is terminated effective
__________________, 20__ ("Termination Date") and the Corporation and Executive
have voluntarily agreed to the terms of this Agreement in exchange for severance
benefits under the Employment Agreement between the parties effective [DATE], 2008 ("Employment
Agreement"), to which Executive otherwise would not be entitled;

     

    WHEREAS,
accordingly the Corporation has determined that Executive will receive severance
pay if Executive executes and complies with the terms of this Agreement;
and

     

    WHEREAS,
Executive acknowledges that the consideration received by Executive under the
terms of this Agreement and the Employment Agreement for the release and waiver
contained herein is in addition to any consideration the Corporation is
otherwise required to provide Executive.

     

    NOW,
THEREFORE, in consideration of the promises and the mutual covenants and
agreements set forth below, the parties hereby acknowledge and agree as
follows:

     

    1.           Severance.  In
consideration for Executive's agreements contained herein and Executive's
compliance with Executive's continuing obligations under the Employment
Agreement, including his obligations under Section 12, the Corporation will pay
Executive the applicable severance provided in Section 10 [Note—actual agreement to specify the
applicable subsections of Section 10(d)] of the Employment
Agreement.  Except as specifically provided in this Agreement, the
Employment Agreement and any applicable plans, programs or arrangements of the
Corporation including, without limitation, the Corporation’s certificate of
incorporation or By-laws, the Corporation’s 2006 Incentive Compensation Plan and
any agreements thereunder and the indemnification agreement dated ____ between
the Corporation and Executive (the “Indemnification Agreement”), Executive shall
not be entitled to any other payment, benefits or other consideration from the
Corporation.

    

    2.           Waiver and
Release.  In consideration for the payments and benefits to be
provided to Executive as set forth herein and the Employment Agreement,
Executive, himself and for any person or entity that may claim by him or through
him, including Executive's heirs, executors, administrators and assigns, hereby
knowingly, irrevocably, unconditionally and voluntarily waives, releases and
forever discharges the Corporation and each of its individual or collective
past, present and future parent, subsidiaries, divisions and affiliates, its and
their joint ventures and its and their respective directors, officers,
associates, employees, representatives, partners, consultants insurers,
attorneys, administrators, accountants, executors, heirs, and agents, and each
of its and their respective predecessors, successors and assigns and all persons
acting by, through or in concert with any of them (hereinafter collectively
referred to as "Releasees"), from any and all claims, causes of action or
liabilities relating to Executive’s employment with the Corporation or the
termination thereof, known or unknown, suspected or unsuspected, arising from
any omissions, acts or facts that have occurred up until and including the date
the Executive executes this Agreement which have been or could be asserted
against the Releasees, including but not limited to:

    

    (a)           causes
of action or liabilities relating to Executive’s employment with the Corporation
or the termination thereof arising under Title VII of the Civil Rights Act, the
Age Discrimination in Employment Act (the "ADEA"), the Employee Retirement
Income Security Act, the Worker Adjustment and Retraining Notification Act, the
American with Disabilities Act, the Equal Pay Act, the Family and Medical Leave
Act, the Illinois Human Rights Act, and the Delaware General Corporations Act as
such Acts have been amended, and/or any other foreign, federal, state,
municipal, or local employment discrimination statutes (including, but not
limited to, claims based on age, sex, attainment of benefit plan rights, race,
religion, national origin, marital status, sexual orientation, ancestry,
harassment, parental status, handicap, disability, retaliation, and veteran
status); and/or

    

    (b)           causes
of action or liabilities related to Executive’s employment with the Corporation
or the termination thereof arising under any other federal, state, municipal, or
local statute, law, ordinance or regulation; and/or

    

    (c)           causes
of action or liabilities relating to rights to or claims for pension,
profit-sharing, wages, bonuses or other compensation or benefits;
and/or

    

    (d)           any
other cause of action relating to Executive’s employment with the Corporation or
the termination thereof including, but not limited to, actions seeking severance
pay, except as provided herein, actions based upon breach of contract, wrongful
termination, defamation, intentional infliction of emotional distress, tort,
personal injury, invasion of privacy, defamation, discrimination, retaliation,
promissory estoppel, fraud, violation of public policy, negligence and/or any
other common law, or other cause of action whatsoever arising out of or relating
to employment with and/or separation from employment with the Corporation and/or
any of the other Releasees.

    

    Nothing
herein shall limit or impede Executive's right to file or pursue an
administrative charge with, or participate in, any investigation before the
Equal Employment Opportunity Commission ("EEOC"), or any other local, state or
federal agency, and/or any causes of action which by law Executive may not
legally waive.  Executive agrees, however, that if Executive or anyone
acting on Executive's behalf, brings any action concerning or related to any
cause of action or liability released in this Agreement, Executive waives any
right to, and will not accept, any payments, monies, damages, or other relief,
awarded in connection therewith.

    

    Nothing
herein shall constitute a waiver or release of any of Executive’s rights under
this Agreement, any other applicable plans, programs or arrangements of the
Corporation including, without limitation, the Corporation’s certificate of
incorporation or By-laws, the Corporation’s 2006 Incentive Compensation Plan and
any agreements thereunder, or under the Indemnification Agreement.

    

    Executive
expressly waives the benefits of any statute or rule of law that, if applied to
this Agreement, would otherwise exclude from its binding effect any claims
against the Corporation not now known by Executive to exist.

    

    3.           Nondisparagement.  Executive
agrees that he will not directly or indirectly, individually or in concert with
others, engage in any conduct or make any statement (whether oral or written)
calculated or likely to have the effect of undermining, disparaging or otherwise
reflecting poorly upon the Corporation or its good will, products or business
opportunities, or in any manner detrimental to the Corporation.  In
addition, Executive agrees not to make any disparaging remarks regarding any
related, affiliated or subsidiary organizations of the
Corporation.  The Corporation agrees to use its reasonable best
efforts to cause its officers and directors not to, directly or indirectly,
individually or in concert with others, engage in any conduct or make any
statement (whether oral or written) calculated or likely to have the effect of
undermining, disparaging or otherwise reflecting poorly upon Executive or in any
manner detrimental to Executive.

    

    4.           Cause of Action. As
used in this Agreement, the phrase "cause of action" includes all claims,
covenants, warranties, promises, agreements, undertakings, actions, suits,
counterclaims, causes of action, complaints, charges, obligations, duties,
demands, debts, accounts, judgments, costs, expenses, losses, damages and
liabilities, of whatsoever kind or nature, in law, equity or
otherwise.

    

    5.           No Assignment of Causes of
Action.  Executive represents and warrants that he has not
filed or caused to be filed against the Releasees any claims, actions or
lawsuits.  Executive further represents and warrants that he has not
sold, assigned, transferred, conveyed or otherwise disposed of to any third
party, by operation of law or otherwise, any claim of any nature whatsoever
relating to any matter covered by this Agreement.

    

    6.           Representations of the
Corporation.  The Corporation represents that it is not
presently aware of any cause of action that it or any of the other Releasees
have against Executive as of the date hereof.  The Corporation
acknowledges that the release granted by the Executive in Paragraph 2 above will
be null and void in the event the Corporation subsequently seeks to treat
Executive’s termination of employment as “for Cause” under the last sentence of
Section 6(ii) of the Employment Agreement.

    

    7.           Notice to Seek Counsel,
Consideration Period, Revocation Period.  Executive
acknowledges that Executive has been advised in writing hereby to consult with
an attorney before signing this document and that Executive has had at least
twenty-one (21) days after receipt of this document to consider whether to
accept or reject this Agreement.  Executive understands that Executive
may sign this Agreement prior to the end of such twenty-one (21) day period, but
is not required to do so.  Under ADEA, Executive has seven (7) days
after Executive signs this Agreement to revoke it.  Such revocation
must be in writing and delivered either by hand or mailed and postmarked within
the seven (7) day period.  If sent by mail, it is requested that it be
sent by certified mail, return receipt requested to the Corporation's General
Counsel Office at
50 Old Webster Road, Oxford, MA 01540.  If Executive revokes this
Agreement as provided herein, it shall be null and void and Executive shall not
be entitled to receive the payments as described in the first sentence of
Paragraph 1 herein.  If Executive does not revoke this Agreement
within seven (7) days of signing it, this Agreement shall become enforceable and
effective on the seventh (7th) day after the Executive signs this Agreement
("Effective Date").

    

    8.           Governing Law;
Disputes.  Except as provided in Section 23 of the Employment
Agreement, or as provided below, jurisdiction and venue over disputes with
regard to this Agreement shall be exclusively in the courts of the State of
Massachusetts or the United States District Court for the District of
Massachusetts.  This Agreement shall be construed and interpreted in
accordance with and governed by the laws of the State of Massachusetts, without
regard to the choice of laws provisions of such laws.  The parties
agree that any action brought by a party to enforce or interpret this Agreement
shall be brought in a State or Federal Court sitting in Boston, Massachusetts;
except that an action by the Corporation to enforce its rights under Section 12
the Employment Agreement may also be brought in Executive's state of residency
or any other forum in which the Executive is subject to personal
jurisdiction.  In addition, Executive and the Corporation specifically
consent to personal jurisdiction in the State of Massachusetts for purposes of
this Agreement.

    

    9.           Amendment;
Waiver.  No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by Executive and the Corporation.  This Agreement shall
be enforced in accordance with its terms and shall not be construed against
either party.

    

    10.           Severability.  The
parties agree that if any provision, section, subsection or other portion of
this Agreement shall be determined by any court of competent jurisdiction to be
invalid, illegal or unenforceable in whole or in part and such determination
shall become final, such provision or portion shall be deemed to be severed or
limited, but only to the extent required to render the remaining provisions and
portion of this Agreement enforceable.  This Agreement as thus amended
will remain in full force and effect and will be binding on the parties and will
be enforced so as to give effect to the intention of the parties insofar as that
is possible.  In addition, the parties hereby expressly empower a
court of competent jurisdiction to modify any term or provision of this
Agreement to the extent necessary to comply with existing law and to enforce
this Agreement as modified.

    

    11.           Enforcement.  This
Agreement may be pleaded as a full and complete defense and may be used as the
basis for an injunction against any action at law or proceeding at equity, or
any private or public judicial or non-judicial proceeding instituted,
prosecuted, maintained or continued in breach hereof.

    

    12.           No Enlargement of Employee
Rights. Executive acknowledges that, except as expressly provided in this
Agreement, any employment or contractual relationship between him and the
Corporation is terminated, and that he has no future employment or contractual
relationship with the Corporation other than the contractual relationship
created by this Agreement, the Employment Agreement, any other applicable plans,
programs or arrangements of the Corporation including, without limitation, the
Corporation’s certificate of incorporation or By-laws, the Corporation’s 2006
Incentive Compensation Plan and any agreements thereunder, and the
Indemnification Agreement.  The Corporation has no obligation,
contractual or otherwise, to employ or reemploy, hire or rehire, or recall or
reinstate Executive in the future with the Corporation.

    

    13.           No
Representations.  Executive represents that he has carefully
read and understands the scope and effect of the provisions of this
Agreement.  Executive has not relied upon any representations or
statements made by the Corporation that are not specifically set forth in this
Agreement.

    

    14.           Counterparts.  This
Agreement may be executed in two counterparts, each of which shall be deemed to
be an original but both of which together will constitute one and the same
instrument.

    

    15.           Withholding.  The
Corporation shall withhold from any payments otherwise due or payable hereunder
any amounts required to be withheld in order to comply with any federal, state,
local or other income or other tax laws requiring withholding with respect to
compensation and benefits provided to Executive pursuant to this
Agreement.

    

    16.           Successors and
Assigns.  This Agreement binds and inures to the benefit of
Executive's heirs, administrators, representatives, executors, successors and
assigns, and the Corporation’s successors and assigns.

    

    17.           Entire Agreement -
Termination of Prior Agreements.  This Agreement contains the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes any previous oral and written agreements or
representations relating to the subject matters herein, except for the
Employment Agreement, any other applicable plans, programs or arrangements of
the Corporation including, without limitation, the Corporation’s certificate of
incorporation or By-laws, the Corporation’s 2006 Incentive Compensation Plan and
any agreements thereunder, and the Indemnification Agreement.

    

    The
undersigned hereby acknowledge and agree that Executive has carefully read and
fully understands all the provisions of this Agreement, has had an opportunity
to seek counsel regarding it and have voluntarily entered into this Agreement by
signing below as of the date(s) set forth below.

    

    IN
WITNESS WHEREOF, the parties have executed this Agreement on the date indicated
above.

    

    
      	
              IPG
      PHOTONICS CORPORATION

               

              By:     _________________________________                                                           

              Its:     _________________________________                                                  

            	
              EXECUTIVE

               

              ___________________________

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