Document:

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                                                                   EXHIBIT 10.24

                          NON-RECOURSE PROMISSORY NOTE

$6,528,248                                                         April 1, 2003

     FOR VALUE RECEIVED, Dr. Valentin P. Gapontsev ("Maker") promises to pay to
IPG Photonics Corporation, a Delaware corporation (the "Company"), or order, the
principal sum of SIX MILLION FIVE HUNDRED AND TWENTY EIGHT THOUSAND TWO HUNDRED
AND FORTY EIGHT DOLLARS ($6,528,248), together with interest (compounded
annually) on the unpaid principal hereof from the date hereof at an annual rate
of 1.46%.

     Interest and principal shall be due and payable on December 31, 2004 or
nine months following an initial public offering by the Company, whichever is
earlier. Payments of principal and interest shall be made in lawful money of the
United States of America. The Maker may at any time prepay all or any portion of
the principal or interest owing hereunder without penalty.

     This Note is secured pursuant to the terms of a Pledge Agreement between
the Maker and the Company, dated as of March 5, 2001, as amended from time to
time (the "Pledge Agreement"). Notwithstanding anything contained herein to the
contrary, this Note (including all interest and principal) is a non-recourse
obligation of Maker and such Note shall be enforced against Maker only to the
extent of Maker's interest in the collateral pledged under the Pledge Agreement
in the event of default hereunder, provided that IP Fibre Devices (UK) Ltd.
("IPFD") shall not have defaulted in its obligations under the Loan and Security
Agreement, dated as of August 23, 2002, between the Company and IPFD, as amended
from time to time, and such default shall have continued for a period of five
business days after receipt of written notice of the default.

     Maker shall immediately repay to the holder of this Note any tax refunds
received by Maker or his successors or assigns from the German Government in
respect of income taxes paid by Maker for the reorganization of the corporate
structure and holdings of the Company and its affiliates.

     In the event the Maker shall cease to be an employee of the Company for the
following reasons:

          A. The Company reasonably determines in its discretion that Maker has
been materially negligent in the performance of, or materially fails to perform,
Maker's duties, or has failed to comply with the reasonable and material
directions of the Company, provided that the Company has given Maker written
notice of the deficiencies in performance or failure to comply and Maker has
failed within thirty (30) days after service of such notice to cure such
deficiencies to the Company's satisfaction;

          B. The determination by the Company in the exercise of its reasonable
judgment that Maker has committed an act or acts constituting fraud with respect
to the Company, or the Maker has been convicted of, or

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admits to, or enters a plea of nolo contendere to a felony or any crime
involving moral turpitude; or

          C. In the event of the Maker's termination of employment with the
Company for any reason, other than for the following:

               i.   The assignment to Maker of any duties materially
                    inconsistent (except in the nature of a promotion) with
                    Maker's position in the Company or a substantial adverse
                    alteration in the nature of Maker's position or
                    responsibilities or in the conditions of employment;

               ii.  A reduction by the Company in Maker's then-current salary or
                    a material reduction in benefits; or

               iii. A termination of employment with the Company without cause;
                    or

          D. The declaration of or filing for bankruptcy or insolvency by the
Maker,

then, this Note shall, at the option of the Company, be accelerated, and the
whole unpaid balance on this Note of principal and accrued interest shall be
immediately due and payable. After default in the required payment of principal
or interest, or the acceleration of this Note, then interest shall thereafter
accrue at rate of the stated interest above plus 2% per annum.

     Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
Maker, subject to the non-recourse limitations of this Note.

     This Note shall be governed by the laws of the Commonwealth of
Massachusetts, without giving effect to its choice of law principles thereof.

     This Note supersedes and replaces in its entirety the Promissory Note,
dated March 5, 2001, having a maturity date of March 5, 2002, and the Amended
and Restated Promissory Note, effective March 5, 2001 and having a maturity date
of December 31, 2004.

                                        /s/ Valentin P. Gapontsev
                                        ---------------------------------------
                                        Dr. Valentin P. Gapontsev

                                        Executed and Delivered

                                        As of this 1st day of April, 2003<PAGE>

                                                                   EXHIBIT 10.25

                AMENDED AND RESTATED NON-RECOURSE PROMISSORY NOTE

$150,000                                                          April 13, 2001

     FOR VALUE RECEIVED, John H. Dalton ("Maker") promises to pay to IPG
Photonics Corporation, a Delaware corporation (the "Company"), or order, the
principal sum of One Hundred and Fifty Thousand Dollars ($150,000), together
with interest (compounded annually) on the unpaid principal hereof from the date
hereof at an annual rate of 5.86%.

     Interest and principal shall be due and payable on December 31, 2004 or
nine months following an initial public offering by the Company, whichever is
earlier. Payments of principal and interest shall be made in lawful money of the
United States of America. The Maker may at any time prepay all or any portion of
the principal or interest owing hereunder without penalty.

     This Note is secured pursuant to the terms of a Pledge Agreement between
the Maker and the Company of even date herewith, as amended from time to time.
The holder shall have no recourse against the undersigned, and shall be required
to proceed only against the collateral securing this Note in the event of
default.

     The holder of this Note shall have full recourse against the undersigned,
and shall not be required to proceed against collateral securing this Note in
the event of default.

     In the event the Maker shall cease to be an employee of the Company for the
following reasons:

          A. The Company reasonably determines in its discretion that Maker has
been materially negligent in the performance of, or materially fails to perform,
Maker's duties, or has failed to comply with the reasonable and material
directions of the Company, provided that the Company has given Maker written
notice of the deficiencies in performance or failure to comply and Maker has
failed within thirty (30) days after service of such notice to cure such
deficiencies to the Company's satisfaction;

          B. The determination by the Company in the exercise of its reasonable
judgment that Maker has committed an act or acts constituting fraud with respect
to the Company, or the Maker has been convicted of, or admits to, or enters a
plea of nolo contendere to a felony or any crime involving moral turpitude; or

          C. In the event of the Maker's termination of employment with the
Company for any reason, other than for the following:

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               i.   The assignment to Maker of any duties materially
                    inconsistent (except in the nature of a promotion) with
                    Maker's position in the Company or a substantial adverse
                    alteration in the nature of Maker's position or
                    responsibilities or in the conditions of employment;

               ii.  A reduction by the Company in Maker's then-current salary or
                    a material reduction in benefits; or

               iii. A termination of employment with the Company without cause;
                    or

          D. The declaration of or filing for bankruptcy or insolvency by the
Maker,

then, this Note shall, at the option of the Company, be accelerated, and the
whole unpaid balance on this Note of principal and accrued interest shall be
immediately due and payable. After default in the required payment of principal
or interest, or the acceleration of this Note, then interest shall thereafter
accrue at rate of 7.86% per annum.

     Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
Maker. This Note shall be governed by the laws of the State of Massachusetts,
without giving effect to its choice of law principles thereof. This Note amends,
restates and supersedes in its entirety the Promissory Note, dated April 13,
2001, having a maturity date of April 13, 2002, and the Amended and Restated
Promissory Note, dated April 2001, having a maturity date of December 4, 2004

                                        /S/ John H. Dalton
                                        ----------------------------------------
                                        John H. Dalton

                                        2<PAGE>

                                                                   EXHIBIT 10.26

                            STOCK PURCHASE AGREEMENT

                                 Pursuant to the
                                  IPG PHOTONICS
                        2000 INCENTIVE COMPENSATION PLAN

     THIS STOCK PURCHASE AGREEMENT ("Agreement") is made this 14th day of
December, 2004, by and between IPG Photonics Corporation, a Delaware corporation
(the "Company"), and John H. Dalton ("Optionee") under the IPG Photonics 2000
Incentive Compensation Plan, as amended from time to time (as amended, the
"Plan"). All capitalized terms used in this Agreement that are not otherwise
defined shall have the meanings ascribed to them in the Plan.

     WHEREAS, the Company has granted to the Optionee pursuant to the Plan and
the related Stock Option Agreement, with respect to options granted on April 28,
2003 between the Company and Optionee, Options to acquire certain shares of
voting common stock ("Shares"), par value $0.0001 of the Company; and

     WHEREAS, the Optionee has delivered to the Company on December 14, 2004 a
notice of exercise of such Options (the "Notice"); and

     WHEREAS, the Company and the Optionee now desire to set forth the terms and
conditions under which the Shares that are the subject of the Notice shall be
acquired, held and transferred, subject to certain restrictions.

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:

1.   Exercise of Option

     a.   Exercise. Optionee hereby purchases 100,000 Shares (the "Purchased
          Shares") pursuant to the Notices of Grant and the Stock Option
          Agreements, with respect to options granted on April 28, 2003 (the
          "Grant Date"), under the Plan at the exercise price of $1.00 per Share
          (the "Exercise Price").

     b.   Payment. Concurrently with the delivery of this Agreement to the
          Company, Optionee shall pay the Exercise Price for the Purchased
          Shares in accordance with the provisions of the Stock Option Agreement
          and shall deliver such additional documents as may be required by the
          Stock Option Agreement as a condition for exercise, together with a
          duly-executed blank Assignment Separate from Certificate (in the form
          attached to this Agreement as Exhibit I) with respect to the Purchased
          Shares.

     c.   Stockholder Rights. Until such time as the Company exercises the Call
          Right (as defined below) or the First Refusal Right (as defined
          below), Optionee shall have all the rights of a holder of voting stock
          (including dividend and liquidation rights) with respect to the
          Purchased Shares, subject, however, to the transfer restrictions of
          Sections 2 and 3.

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2.   Securities Law Compliance

     a.   Securities Matters.

          i.   The Purchased Shares have not been registered under the
               Securities Act and are being issued to Optionee in reliance upon
               the exemption from such registration provided by SEC Rule 701 for
               stock issuances under compensatory benefit plans such as the
               Plan. Optionee hereby confirms that Optionee has been informed
               that the Purchased Shares are restricted securities under the
               Securities Act and may not be resold or transferred unless the
               Purchased Shares are first registered under the Federal
               securities laws and applicable state securities laws or unless an
               exemption from such registration is available. Accordingly,
               Optionee hereby acknowledges and agrees that Optionee is prepared
               to hold the Purchased Shares for an indefinite period and that
               Optionee is aware that SEC Rule 144 issued under the Securities
               Act which exempts certain resales of unrestricted securities is
               not presently available to exempt the resale of the Purchased
               Shares from the registration requirements of the Securities Act.

          ii.  Optionee hereby represents and warrants to the Company that
               Optionee is acquiring the Purchased Shares for Optionee's own
               account, for investment purposes, and not with a view to, or for
               resale in connection with, the distribution of such Purchased
               Shares.

     b.   Restrictions on Disposition of Purchased Shares. Optionee shall make
          no disposition of the Purchased Shares unless and until there is
          compliance with all of the following requirements:

          (i)  Optionee shall have provided the Company with a written summary
               of the terms and conditions of the proposed disposition.

          (ii) Optionee shall have complied with all requirements of this
               Agreement applicable to the disposition of the Purchased Shares.

          (iii) Optionee shall have provided the Company with written
               assurances, including an opinion of counsel, in form and
               substance satisfactory to the Company, that (a) the proposed
               disposition does not require registration of the Purchased Shares
               under the Securities Act or applicable state securities laws or
               (b) all appropriate action necessary for compliance with the
               registration requirements of the Securities Act and applicable
               state securities laws or any exemption from registration
               available under the Securities Act (including Rule 144) and
               applicable state securities laws has been taken.

          The Company shall not be required (i) to transfer on its books any
          Purchased Shares which have been sold or transferred in violation of
          the provisions of this Agreement or (ii) to treat as the owner or
          holder of the Purchased Shares, or otherwise to

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          accord voting, dividend or liquidation rights to any transferee to
          whom the Purchased Shares have been transferred in contravention of
          this Agreement.

     c.   Restrictive Legends. The stock certificates for the Purchased Shares
          shall be endorsed with restrictive legends substantially as follows:

               "The shares represented by this certificate are subject to
               certain repurchase rights and rights of first refusal granted to
               the Company and accordingly may not be sold, assigned,
               transferred, encumbered, or in any manner disposed of except in
               conformity with the terms of the Stock Purchase Agreement dated
               December 14, 2004 between the Company and the registered holder
               of the shares. A copy of such agreement is maintained at the
               Company's principal corporate offices."

          In addition, if shares are awarded prior to an IPO, the certificates
          shall also be inscribed with the following:

               "The shares of stock evidenced by this certificate have not been
               registered under the Securities Act of 1933 (the "Securities
               Act") or the securities laws of any state. These shares may not
               be sold or transferred unless the transaction is registered under
               the Securities Act and applicable state law or exempt from
               registration thereunder.

3.   Further Transfer Restrictions

     a.   Restriction on Transfer. Subject to the other provisions of this
          Agreement, prior to an IPO, and for the first 6 months following the
          date of grant, Optionee may not sell, exchange, or transfer the Shares
          received pursuant to an exercise of Options under the Plan to anyone,
          including the Company, without the prior written consent of the
          Company, which consent may be withheld in its sole and absolute
          discretion.

     b.   Transferee Obligations. Each person (other than the Company) to whom
          the Purchased Shares are transferred by means of a transfer expressly
          permitted under this Agreement must, as a condition precedent to the
          validity of such transfer, acknowledge in writing to the Company that
          such person is bound by the provisions of this Agreement and that the
          transferred shares are subject to (i) the Call Right, (ii) the First
          Refusal Right and (iii) the Lock-Up, to the same extent such shares
          would be so subject if retained by Optionee.

c.   Lock-Up.

     (i)  In connection with any underwritten public offering by the Company of
          its equity securities pursuant to an effective registration statement
          filed under the Securities Act, including the Company's initial public
          offering, Optionee shall not sell, make any short sale of, loan,
          hypothecate, pledge, grant any option for the purchase of, or
          otherwise dispose or transfer for value or otherwise agree to engage
          in any of the foregoing transactions with respect to any Purchased
          Shares without the prior written consent of the

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          Company or its underwriters. Such restriction (the "Lock-Up") shall be
          in effect for such period of time from and after the effective date of
          the final prospectus for the offering as may be requested by the
          Company or such underwriters, and as may be determined by the
          Committee in its discretion. Such Lock-Up shall be subject to such
          other restrictions, conditions and limitations as the Committee may
          impose in its discretion.

     (ii) Optionee shall be subject to the Lock-Up provided and only if the
          officers and directors of the Company are also subject to similar
          restrictions.

4.   Call Right

     a.   Grant. Prior to the completion of an IPO, except as otherwise provided
          by the Committee at or after grant, and on and after the date Optionee
          terminates employment or other service provider relationship with the
          Company, an Affiliate or Group Company for any reason, the Company
          shall have the right to purchase, and the Optionee shall have the
          corresponding obligation to sell, upon delivery of written notice to
          Optionee, any or all of the Shares then owned by Optionee, ownership
          of which Shares was acquired through exercise of an Option (such
          repurchase rights of the Company, together with the repurchase rights
          set forth in Section 4.b, being referred to hereinafter as the "Call
          Rights"). In the case of termination of Optionee other than for Cause,
          the purchase price of the Shares shall be the Fair Market Value of
          such Shares as of the date the Company mails or otherwise delivers
          such written notice to the Optionee. If Optionee is terminated for
          Cause and holds Shares subject to Call Rights or First Refusal Rights,
          Optionee shall not have the right to receive Fair Market Value for the
          Shares, but shall receive an amount equal to the exercise price of the
          Option.

     b.   Certain Fundamental Changes. Without regard to the completion of an
          IPO, the Shares may be subject to a right of call by the Committee in
          the event of termination of the Plan due to merger or acquisition of
          the Company, or prior to an IPO, upon the occurrence of a Change in
          Control in the Company, whether or not the Plan is terminated. If the
          right to call the Shares is exercised by the Committee, such Shares
          must be returned to the Company within seven (7) days of the call
          notice. In such event:

          (i)  Optionee shall, unless otherwise determined by the Committee
               pursuant to paragraph (ii) below, be entitled to receive from the
               Company an amount equal to the Fair Market Value of the returned
               Shares.

          (ii) The Committee shall have the right to defer payment of the
               proceeds under this Section 4.b pursuant to the terms and
               conditions set forth in the Plan and Section 6 hereto.

5.   Right of First Refusal

     a.   Grant. Prior to an IPO, the Company shall have a right of first
          refusal (the "First Refusal Right"), exercisable in connection with
          any proposed transfer of the Purchased Shares, except with respect to
          any Permitted Transfer (as defined below).

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     b.   Notice of Intended Disposition. In the event Optionee desires to
          accept a bona fide third-party offer for the transfer of any or all of
          the Purchased Shares (the Purchased Shares subject to such offer to be
          hereinafter referred to as the "Target Shares"), Optionee shall
          promptly (i) deliver to the Company written notice (the "Disposition
          Notice") of the terms of the offer, including the purchase price and
          the identity of the third-party offeror, and (ii) provide satisfactory
          proof that the disposition of the Target Shares to such third-party
          offeror would not be in contravention of the provisions set forth in
          Sections 2 and 3.

     c.   Exercise of the First Refusal Right. The Company shall, for a period
          of twenty-five (25) days following receipt of the Disposition Notice,
          have the right to repurchase any or all of the Target Shares subject
          to the Disposition Notice upon the same terms as those specified
          therein or upon such other terms (not materially different from those
          specified in the Disposition Notice) to which Optionee consents. Such
          right shall be exercised by delivery of written notice (the "Exercise
          Notice") to Optionee prior to the expiration of the twenty-five
          (25)-day exercise period. If such right is exercised with respect to
          all the Target Shares, then the Company shall effect the repurchase of
          such shares, including payment of the purchase price, not more than
          five (5) business days after delivery of the Exercise Notice; and at
          such time the certificates representing the Target Shares shall be
          delivered to the Company.

          Should the purchase price specified in the Disposition Notice be
          payable in property other than cash or evidences of indebtedness, the
          Company shall have the right to pay the purchase price in the form of
          cash equal in amount to the value of such property. If Optionee and
          the Company cannot agree on such cash value within ten (10) days after
          the Company's receipt of the Disposition Notice, the valuation shall
          be made by an appraiser of recognized standing selected by Optionee
          and the Company or, if they cannot agree on an appraiser within twenty
          (20) days after the Company's receipt of the Disposition Notice, each
          shall select an appraiser of recognized standing and the two (2)
          appraisers shall designate a third appraiser of recognized standing,
          whose appraisal shall be determinative of such value. The cost of such
          appraisal shall be shared equally by Optionee and the Company. The
          closing shall then be held on the later of (i) the fifth (5th)
          business day following delivery of the Exercise Notice or (ii) the
          fifth (5th) business day after such valuation shall have been made.

     d.   Non-Exercise of the First Refusal Right. In the event the Exercise
          Notice is not given to Optionee prior to the expiration of the
          twenty-five (25)-day exercise period, Optionee shall have a period of
          thirty (30) days thereafter in which to sell or otherwise dispose of
          the Target Shares to the third-party offeror identified in the
          Disposition Notice upon terms (including the purchase price) no more
          favorable to such third-party offeror than those specified in the
          Disposition Notice; provided, however, that any such sale or
          disposition must not be effected in contravention of the provisions of
          Sections 2 and 3. The third-party offeror shall acquire the Target
          Shares subject to the provisions of this Agreement as set forth in
          Section 3.b. In the event Optionee does not effect such sale or
          disposition of the Target Shares within the specified thirty (30)-day
          period, the First Refusal Right shall continue to be applicable to any
          subsequent disposition of the Target Shares by Optionee until such
          right lapses.

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<PAGE>

     e.   Partial Exercise of the First Refusal Right. In the event the Company
          makes a timely exercise of the First Refusal Right with respect to a
          portion, but not all, of the Target Shares specified in the
          Disposition Notice, Optionee shall have the option, exercisable by
          written notice to the Company delivered within five (5) business days
          after Optionee's receipt of the Exercise Notice, to effect the sale of
          the Target Shares pursuant to either of the following alternatives:

          (i)  sale or other disposition of all the Target Shares to the
               third-party offeror identified in the Disposition Notice, but in
               full compliance with the requirements of Section 5.d, as if the
               Company did not exercise the First Refusal Right; or

          (ii) sale to the Company of the portion of the Target Shares which the
               Company has elected to purchase, such sale to be effected in
               substantial conformity with the provisions of Paragraph 5.c. The
               First Refusal Right shall continue to be applicable to any
               subsequent disposition of the remaining Target Shares until such
               right lapses.

          Optionee's failure to deliver timely notification to the Company shall
          be deemed to be an election by Optionee to sell the Target Shares
          pursuant to alternative (i) above.

     f.   Recapitalization/Reorganization.

          (i)  Any new, substituted or additional securities or other property
               which is by reason of any Recapitalization distributed with
               respect to the Purchased Shares shall be immediately subject to
               the First Refusal Right, but only to the extent the Purchased
               Shares are at the time covered by such right.

          (ii) In the event of a Reorganization, the First Refusal Right shall
               remain in full force and effect and shall apply to the new
               capital stock or other property received in exchange for the
               Purchased Shares in consummation of the Reorganization, but only
               to the extent the Purchased Shares are at the time covered by
               such right.

     g.   Lapse. The First Refusal Right shall lapse upon an IPO. However, the
          Lock-Up shall continue to remain in full force and effect following
          the lapse of the First Refusal Right.

     h.   Permitted Transfer. For the purpose of Section 5(a), the term
          "Permitted Transfer" shall mean, with respect to the Purchased Shares,
          any sale conveyance, exchange, assignment, pledge, encumbrance, gift,
          bequest, hypothecation or other transfer or disposition by any other
          means, whether for value or no value and whether voluntary or
          involuntary (including, without limitation, by merger or operation of
          law), or any agreement to do any of the foregoing, by Optionee to
          Optionee's Immediate Family. The term "Immediate Family" means, and is
          limited to, Optionee's current spouse, parents, parents-in-law,
          grandparents, children, siblings (and their lineal descendents), and
          grandchildren. A trust, estate, family partnership, limited liability
          company or corporation entitled to federal income tax treatment
          pursuant to subchapter S of the Internal Revenue Code, all of the
          beneficiaries, partners, members or shareholders of which consist

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<PAGE>

          of Optionee or members of Optionee's Immediate Family, shall be
          considered such Optionee's Immediate Family for the purposes of this
          Agreement.

6.   Right to Defer Payment

     a.   At the discretion of the Committee, payments to Optionee may be made
          by the Company in the form of a single lump sum or installments.
          Installment payments shall be made in full no later than two (2) years
          from the date of disposition and will, if not paid in full
          immediately, be credited annually with interest using an interest rate
          equal to the annual rate of interest on 30-year Treasury securities as
          of the beginning of each such annual crediting period (as determined
          by the Committee).

     b.   If Optionee engages in conduct that constitutes a breach of Optionee's
          non-disclosure agreement and covenant not to compete, or other
          employment agreement with the Company, or engages in conduct otherwise
          determined by the Committee to be injurious to the Company, Optionee
          shall not be entitled to receive any remaining installments from a
          deferred payment and, in addition to any other rights the Company may
          have at law or in equity, the right to any remaining payments or
          installments shall immediately be forfeited and any such payments or
          installments shall immediately cease.

7.   General Provisions

     a.   Transfer; Assignment. The Optionee shall not sell, transfer, pledge,
          assign or otherwise dispose of or encumber the Purchased Shares other
          than as set forth in this Agreement and the Plan. Any attempted sale,
          transfer, pledge, assignment or other disposition or encumbrance of
          such Purchased Shares, or of Optionee's rights and obligations under
          this Agreement, contrary to the provisions of this Agreement shall be
          null and void. The Company may assign the Call Right and/or the First
          Refusal Right to any person or entity selected by the Board, including
          (without limitation) one or more stockholders of the Company.

     b.   Notices. Any notice which either party hereto may be required or
          permitted to give to the other shall be in writing, and may be
          delivered personally or by mail, postage prepaid, if to the Company,
          addressed to the Company at the following address:

                    IPG Photonics Corporation
                    50 Old Webster Road
                    Oxford, MA 01540
                    Attention: Secretary

          or at any other address as the Company, by notice to the Optionee, may
          designate in writing from time to time; and, if to the Optionee,
          addressed to the Optionee at the Optionee's address as set forth next
          to the Optionee's signature below, or at any other address as the
          Optionee by notice to the Company, may designate in writing from time
          to time.

     c.   No Waiver. No waiver by either party of the application of any term,
          provision or condition of this Agreement, or a breach thereof by the
          other party, shall constitute a waiver of any succeeding breach of the
          same or any other provision hereof. No

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          such waiver shall be valid unless executed in writing by the party
          making the waiver.

     d.   Cancellation of Shares. If the Company shall make available, at the
          time and place and in the amount and form provided in this Agreement,
          the consideration for the Purchased Shares to be repurchased in
          accordance with the provisions of this Agreement, then from and after
          such time, the person from whom such shares are to be repurchased
          shall no longer have any rights as a holder of such shares (other than
          the right to receive payment of such consideration in accordance with
          this Agreement). Such shares shall be deemed purchased in accordance
          with the applicable provisions hereof, and the Company shall be deemed
          the Optionee and holder of such shares, whether or not the
          certificates therefor have been delivered as required by this
          Agreement.

     e.   Optionee Undertaking. Optionee hereby agrees to take whatever
          additional action and execute whatever additional documents the
          Company may deem necessary or advisable in order to carry out or
          effect one or more of the obligations or restrictions imposed on
          either Optionee or the Purchased Shares pursuant to the provisions of
          this Agreement.

     f.   Agreement Subject to Plan. The terms and conditions of the Plan as it
          now exists and as it may be amended from time to time are hereby
          incorporated by reference into this Agreement. The Purchased Shares
          are being issued and purchased pursuant to and subject to the Plan. In
          the event of any conflict between the terms of this Agreement and the
          terms of the Plan, the terms of the Plan shall control. Terms used
          herein that are not otherwise defined shall have the meanings ascribed
          to them in the Plan.

     g.   Entire Agreement. This Agreement constitutes and contains the entire
          agreement and understanding between the parties with respect to the
          subject matter hereof and supersedes any and all prior agreements, if
          any, understandings and negotiations relating thereto. No promise,
          understanding, representation, inducement, condition or warranty not
          set forth herein has been made or relied upon by any party hereto.

     h.   Governing Law. This Agreement shall be construed by, enforced in
          accordance with and governed by the substantive laws of the State of
          Delaware without giving effect to the conflict of laws provisions
          thereof.

     i.   Counterparts. This Agreement may be executed in one or more
          counterparts, each of which shall be deemed to be an original, but all
          of which together shall constitute one and the same instrument.

     j.   Successors and Assigns. Subject to the other terms hereof, this
          Agreement shall be binding upon and inure to the benefit of the heirs,
          beneficiaries, legal representatives and successors of the parties.

                                       8

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first indicated above.

                                        IPG PHOTONICS CORPORATION

                                        By: /s/ Angelo P. Lopresti
                                            ------------------------------------
                                        Title: Vice President

                                        OPTIONEE

                                        By: /s/ John H. Dalton
                                            ------------------------------------
                                        Name: John H. Dalton
                                        Address: 3710 University Ave.
                                                 NW Washington, DC 20016

                                       9

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