Document:

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                                                                   EXHIBIT 10.45

                               SUBLEASE AGREEMENT

     This sublease agreement was entered into on October 30, 2006 between IP
Fibre Devices (UK) Limited, of 22 Buckingham Gate, London SW1, referred to as
"Lessee" and IPG Photonics (UK) Limited, referred to as "Sublessee."

                                    RECITALS

     The parties recite and declare:

     A. Lessee has leased space in an office building.

     B. Sublessee desires to obtain office space in the geographical area in
which the building is located.

     C. The parties desire to enter a sublease agreement defining all rights,
duties, and liabilities of the parties.

     In consideration of the mutual covenants contained in this sublease
agreement, the parties agree as follows:

                                   SECTION ONE

                             DESCRIPTION OF PREMISES

     D. Lessee has leased a building consisting of one (1) floor of office space
of approximately 1,200 square feet from Standard Life Investment Funds Limited
("Lessor"), located at 22 Buckingham Gate, London SW1 (the "demised premises").

     E. Lessee shall demise to Sublessee the demised premises, as more fully
described in Lease between Lessee and Lessor dated August 3, 2000. which is
attached to and made a part of this sublease agreement.

                                   SECTION TWO

                               PURPOSE OF SUBLEASE

     A. The premises demised under this sublease agreement are to be used by
Sublessee in the conduct of the business of sales of fiber lasers and
amplifiers, and all tasks related to that business.

     B. Sublessee shall not use the demised premises for any illegal, immoral,
or ultra-hazardous activity, whether within or outside the scope of the business
of Sublessee.

                                  SECTION THREE

                                TERM OF SUBLEASE

     The term of this sublease agreement shall be for a period, commencing on
the date hereof and terminating on June 23, 2010, unless earlier terminated by
breach of the terms and conditions of this sublease agreement or as provided in
Sections Seven or Sixteen.

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                                  SECTION FOUR

                                      RENT

     Sublessee shall pay to Lessee as basic rent [Pound Sterling]37,000 per
annum, and [Pound Sterling]3,000 for service charges and [Pound Sterling]2,000
for taxes payable quarterly, subject to increases as provided for in the Lease,
plus the other rent and charges as set forth in Section 3.1 of the Lease, but
not greater than the amount paid by Lessee under the Lease and continuing each
quarter thereafter during the term of this sublease agreement. Sublessee shall
pay all other sums due as additional rental under the provisions of this
sublease agreement on the basic rental payment due date first occurring after
the additional rental payment arises.

                                  SECTION FIVE

                             SERVICES AND UTILITIES

     Lessee shall furnish all water and sewer services to Sublessee at the
expense of Lessee. All other utilities required by Sublessee on the demised
premises, including gas, electricity, and telephone services shall be obtained
by and at the expense of Sublessee. Sublessee shall also obtain and pay the
expense of all janitorial services required on the demised premises.

                                   SECTION SIX

                           ACCIDENTAL DAMAGE OR INJURY

     Lessor and Lessee shall not be liable for any damage to property or any
injury to persons, sustained by Sublessee or others, caused by conditions or
activities on the demised premises. Sublessee shall indemnify Lessor and Lessee
against all claims arising from such damages or injuries and shall carry
liability insurance insuring Lessee, Sublessee, and Lessor against any claims in
amounts to he approved by Lessor.

                                  SECTION SEVEN

                            CASUALTY DAMAGE OR INJURY

     If the demised premises shall be destroyed or damaged by any acts of war,
the elements, including earthquake, or fire, to such an extent as to render the
demised premises untenantable in whole or in substantial part, Lessor has the
option of rebuilding or repairing the demised premises as set forth in the
Lease. If Lessor elects to rebuild or repair the demised premises and does so
without unnecessary delay, Sublessee shall be bound by this sublease agreement,
except that during the period of repair the rent of the demised premises shall
he abated in the same proportion that the part of the demised premises rendered
unfit for occupancy by Sublessee shall bear to the whole of the subleased
premises. If Lessor fails to give notice of the intent to repair, Sublessee
shall have the right to declare this sublease agreement terminated.

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                                  SECTION EIGHT

                     COMPLIANCE WITH ORIGINAL LEASE AND LAWS

     A. Sublessee shall not cause or allow any undue waste on the demised
premises and shall comply with all applicable laws and ordinances respecting the
use and occupancy of the demised premises relating to matters not covered
elsewhere in this sublease agreement, provided that Sublessee shall not be
required to make any alterations, additions, or improvements to the demised
premises in order to conform with this sublease agreement.

     B. Sublessee shall perform and observe the terms and conditions to be
performed on the part of Lessee under the provisions of the Lease between Lessee
and Lessor, excepting the covenant for the payment of rent reserved thereby, and
to indemnify Lessee against any and all claims, damages, costs, and expenses in
respect to the nonperformance or nonobservance of any such terms or conditions.

                                  SECTION NINE

                                     REPAIRS

     Subject to the obligations of Lessor under Section 4 of the Lease, Lessee,
unless specified to the contrary in this sublease agreement, shall maintain the
demised premises in good repair and tenantable condition during the continuance
of this sublease agreement, except in case of damage arising from acts or
negligence of Sublessee or the agents of Sublessee.

                                   SECTION TEN

                     ALTERATIONS, ADDITIONS, OR IMPROVEMENTS

     A. Sublessee shall not make any alterations, additions, or improvements on
or to the demised premises without first obtaining the written consent of
Lessee. All alterations, additions, and improvements that shall be made shall be
at the sole expense of Sublessee and shall become the property of Lessee and
shall remain on and be surrendered with the demised premises as a part of them
at the termination of this sublease agreement without disturbance, molestation,
or injury.

     B. Nothing contained in this section shall prevent Sublessee from removing
all office machines, equipment, and trade fixtures customarily used in the
business of Sublessee.

                                 SECTION ELEVEN

                                      LIENS

     Sublessee shall keep the demised premises free and clear of all liens
arising out of any work performed. materials furnished, or obligations incurred
by Sublessee.

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                                 SECTION TWELVE

                               ACCESS TO PREMISES

     Sublessee shall allow Lessor or Lessee or the agents or employees of either
the free access to the demised premises at all reasonable times for the purpose
of inspecting or of making repairs, additions, or alterations to the demised
premises or any property owned by or under the control of either party.

                                SECTION THIRTEEN

                                 ADVERTISEMENTS

     All signs or symbols placed in the windows or doors of the demised
premises, or on any exterior part of the building by Sublessee, shall be subject
to the approval of Lessee. If Sublessee shall place signs or symbols on the
exterior of the building or in the windows or doors where they are visible from
the street that are not satisfactory to Lessee, Lessee may immediately demand
the removal of the signs or symbols.

                                SECTION FOURTEEN

                        SALES, ASSIGNMENTS, AND SUBLEASES

     Sublessee shall not assign this sublease agreement, or sell or sublet the
premises subleased, or any part of or interest in them, without the prior,
express, and written consent of Lessee. This sublease agreement shall not he
assigned by operation of law.

                                 SECTION FIFTEEN

                                 QUIET ENJOYMENT

     If Sublessee performs the terms of this sublease agreement, Lessee will
warrant and defend Sublessee in the enjoyment and peaceful possession of the
demised premises during the term of this sublease agreement without any
interruption by Lessee or Lessor or either of them or any person rightfully
claiming under either of them.

                                 SECTION SIXTEEN

                                  CONDEMNATION

     A. If the demised premises or any part of the demised premises are
appropriated or taken for any public use by virtue of eminent domain or
condemnation proceedings, or if by reason of law, ordinance, or court decree,
whether by consent or otherwise, the use of the demised premises by Sublessee
for any of the specific purposes referred to in this sublease agreement shall be
prohibited, Sublessee shall have the right to terminate this sublease on written
notice to Lessee, and rental shall he paid only to the time when Sublessee
surrenders possession of the demised premises.

     B. In the event of partial appropriation, Sublessee may elect to continue
in possession of that part of the demised premises not so appropriated under the
same terms and conditions of this sublease agreement, except that in those cases
Sublessee shall be entitled to an equitable reduction of the rental payment
under this sublease agreement.

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     C. Any rental paid in advance beyond the time that the property has been
taken from Sublessee shall be returned by Lessee to Sublessee on demand.

     D. Sublessee does not waive any right to recover from the condemnation
authority for any damage that may be suffered by Sublessee by reason of any
condemnation.

                                SECTION SEVENTEEN

                           DEFAULT BY LESSOR OR LESSEE

     If Lessor or Lessee fails or neglects to perform under the provisions of
this sublease agreement or of the original lease between them, then Sublessee
may, after reasonable notice in writing of not less than thirty (30) days,
terminate this sublease agreement.

                                SECTION EIGHTEEN

                              DEFAULT OF SUBLESSEE

     A. If any rents reserved, or any part of them, shall be and remain unpaid
when they shall become due, or if Sublessee violates or defaults in any of the
provisions of this sublease agreement, then Lessee may cancel this sublease
agreement by giving the required notice, and reenter the demised premises.

     B. In spite of any reentry, the liability of Sublessee for the rent shall
not be extinguished for the balance of the term of this sublease agreement, and
Sublessee shall make good to Lessee any deficiency arising from a reentry and
reletting of the demised premises at a reduced rental.

     C. Sublessee shall pay any deficiency on the first day of each month
immediately following the month in which the amount of deficiency is ascertained
by Lessee.

                                SECTION NINETEEN

                            INSOLVENCY OR BANKRUPTCY

     If Sublessee becomes insolvent, voluntarily or involuntarily bankrupt, or
if a receiver, assignee, or other liquidating officer is appointed for the
business of Sublessee, then Lessee may terminate this sublease agreement at the
option of Lessee.

                                 SECTION TWENTY

                            TERMINATION AND SURRENDER

     A. Sublessee shall surrender the demised premises within thirty (30) days
from receipt of notice of termination of this sublease agreement, or on the last
day of the term of this sublease agreement.

     B. Lessee shall have the right to place and maintain on the demised
premises "For Rent" or "For Sale" signs during the last ninety (90) days of the
term of this sublease agreement.

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     C. Sublessee shall, at the expiration of this sublease agreement, surrender
the keys to the demised premises to Lessee.

     D. If Sublessee shall surrender the demised premises at the election of
Sublessee, the liability for all duties and obligations required of Sublessee
shall continue until the surrender has been accepted by Lessee in writing.

                               SECTION TWENTY-ONE

                          REMOVAL OF PERSONAL PROPERTY

     Sublessee shall have the right to remove all personal property, trade
fixtures, and office equipment, whether attached to the demised premises or not,
provided that these items can be removed without serious damage to the building
or the demised premises.

                               SECTION TWENTY-TWO

                             INTEREST OF SUCCESSORS

     The covenants and agreements of this sublease agreement shall be binding on
the successors and assigns of Lessee and on the successors and assigns of
Sublessee but only to the extent specified in this sublease agreement.

                              SECTION TWENTY-THREE

                                     NOTICES

     Except where otherwise required by statute, all notices given pursuant to
the provisions of this sublease agreement may be sent by certified mail, postage
prepaid, to the last known mailing address of the party for whom the notice is
intended.

                               SECTION TWENTY-FOUR

                                      VENUE

     At the option of either party, venue of any action may be established in
London, England. Personal service either within or without London shall be
sufficient to give that court jurisdiction.

                               SECTION TWENTY-FIVE

                                  GOVERNING LAW

     It is agreed that this sublease agreement shall he governed by, construed,
and enforced in accordance with the laws of Great Britain.

     In witness, each party to this sublease agreement has caused it to he
executed on the date indicated below.

                                                IP FIBRE DEVICES (UK) LIMITED

                                                By: /s/ Valentin P. Gapontsev
                                                   -----------------------------
                                                   Name: Valentin P. Gapontsev
                                                   Date: October 31, 2006

                                       6

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                                                IPG PHOTONICS (UK) LIMITED

                                                By: /s/ Timothy P.V. Mammen
                                                   -----------------------------
                                                   Name: Timothy P.V. Mammen
                                                   Date: October 31, 2006

                                       7<PAGE>

                                                                   EXHIBIT 10.46

                         RIGHT OF FIRST OFFER AGREEMENT

     THIS RIGHT OF FIRST OFFER AGREEMENT (this "Agreement") is made and entered
into as of November 1, 2006 by and among IPG Laser GmbH, a limited liability
company organized under the laws of Germany ("IPG Laser"), Scientific and
Technical Association IRE Polus, a limited liability company organized under the
laws of the Russian Federation (the "Company") and Valentin P. Gapontsev, Ph.D.
(the "Participant") who holds a voting equity interest in the Company.

                                    RECITALS

     A. WHEREAS, the Participant owns 26.7% of the voting equity interest in the
Company (said voting equity interest, together with any voting equity interest
now owned or subsequently acquired by Participant, his permitted transferees or
assigns, is hereinafter referred to as the "Interest");

     B. WHEREAS, IPG Laser owns 51% of the voting equity interest in the
Company;

     C. WHEREAS, IPG Photonics Corporation, a Delaware corporation ("IPG"),
intends to enter into an Underwriting Agreement (the "Underwriting Agreement")
by and between it, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Lehman Brothers Inc. and each of the other Underwriters named in
Schedule A thereto (collectively, the "Underwriters"), pursuant to which IPG
intends to consummate an initial public offering of shares of its common stock;

     D. WHEREAS, IPG Laser is a wholly-owned subsidiary of IPG;

     E. WHEREAS, simultaneous with the execution hereof, the Participant is
granting IPG Laser the power to exercise the Participant's voting interest with
respect to the Interest pursuant to an Irrevocable Proxy Coupled with Interest
substantially in the form attached hereto as Exhibit A (the "Proxy");

     F. WHEREAS, the Participant is also a substantial stockholder of IPG and
will draw a substantial benefit from the initial public offering of IPG; and

     G. WHEREAS, as a material inducement to the Underwriters to enter into the
Underwriting Agreement, the Participant has agreed to grant (i) to IPG Laser the
power to exercise the Participant's voting interest with respect to the Interest
pursuant to the Proxy and (ii) to IPG Laser a right of first offer with respect
to any proposed transfer of the Interest, or any portion thereof, pursuant to
this Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:

<PAGE>

     1. Right of First Offer.

     (a) The Participant hereby agrees that he shall not assign, sell, offer to
sell, pledge, mortgage, hypothecate, encumber, dispose of or enter into any
other like transaction involving the transfer or encumbrance of the Interest, in
whole or in part (each a "Transfer"), to any participant of the Company other
than IPG Laser without first offering such interest to IPG Laser at a price
equal to the lesser of (x) the proportionate interest in the net asset value of
the Company as of June 30, 2006 represented by the interest to be transferred,
(y) the fair value of the interest to be transferred as determined in good faith
and approved by the Audit Committee of the Board of Directors of IPG as of a
date within three months of the proposed transfer or (z) the bona fide purchase
price proposed to be paid by any participant of the Company, if any, for the
interest to be transferred. Prior to any Transfer of the Interest, in whole or
in part, to any participant of the Company, the Participant must deliver a
written notice (the "Notice") to IPG Laser, which Notice must include (i) a
statement of the intent to Transfer the Interest (or some portion thereof) , the
material terms and conditions of the proposed Transfer and the identity of the
proposed transferee, (ii) a copy of any written offer, term sheet or purchase
agreement from any participant of the Company setting forth all material terms,
including the bona fide consideration to be paid, and (iii) an offer to sell the
Interest (or such portion thereof in question) to IPG Laser on the terms set
forth in this Agreement. IPG Laser may elect to purchase all or part of the
Interest (or such portion thereof being offered) by sending written notice to
the Participant accepting the offer to purchase the Interest (or such portion
thereof being offered) at a price equal to the lesser of clauses (x), (y) or (z)
above within thirty (30) days following receipt of the Notice. The closing will
take place on a mutually agreeable date to be not more than thirty (30) days
following the exercise of the right of first offer hereunder by IPG Laser.

     (b) If IPG Laser does not exercise the right of first offer by the end of
the thirty (30) day period referred to above, the Participant, subject to
Section 1(a) hereof, will be free to sell the membership interest described in
the Notice to such participant of the Company on terms not worse to the
Participant than those set forth in the Notice, at any time within ninety (90)
days thereafter. Regardless of whether such sale is completed, the right of
first offer set forth in this Section 1 will remain in full force and effect.

     (c) Any Transfer of the Interest (or any portion thereof) by the
Participant not made in compliance with the requirements of this Agreement shall
be void ab initio and shall not be recognized by the Company.

     (d) If the Participant becomes obligated to Transfer the Interest (or any
portion thereof) to IPG Laser pursuant to this Agreement and fails to deliver
the Notice in accordance with the terms of this Agreement, IPG Laser may, at its
option, in addition to all other remedies it may have, send to the Participant
the purchase price for the Interest (or portion thereof) as is herein specified
and the Company shall take such steps as are required under the laws of the
Russian Federation to effect the transfer of the Participant's shares to IPG
Laser.

                                       2

<PAGE>

     2. Representations, Warranties and Covenants of the Participant. The
Participant represents, warrants and covenants to IPG Laser as follows:

     (a) The Participant is the sole beneficial and record owner, and has good
and marketable title to, the Interest, and, except as provided for in the Proxy,
has sole and full power to vote or direct the voting of the Interest with no
limitations, qualifications or restrictions on such rights, and no other person
has any interest in the Interest (or any portion thereof).

     (b) As of the date hereof the Interest is, and at all times up until a
Transfer of all of the Interest in compliance with the terms hereof, the
Interest will be, free and clear of any rights of first offer, co-sale rights or
other similar rights, other than those rights described herein and in the
charter documents of the Company.

     (c) The Participant has the legal capacity and full power and authority to
make, enter into and carry out the terms of this Agreement and to perform his
obligations hereunder. This Agreement has been duly and validly executed and
delivered by the Participant and constitutes a valid and binding agreement of
the Participant, enforceable against the Participant in accordance with the
terms of this Agreement.

     (d) Except for the Proxy, none of the Interest is subject to any voting
trust, proxy, or other agreement, arrangement or restriction with respect to
voting.

     (e) The Participant agrees that, except for the Proxy, he shall not enter
into any voting arrangement, whether by proxy, power-of-attorney, voting
agreement, voting trust or otherwise, directly or indirectly, with respect to
the Interest.

     (f) The execution and delivery of this Agreement by the Participant does
not, and the performance of this Agreement by the Participant will not, (i)
conflict with or violate any law applicable to the Participant or by which the
Participant or any of the Participant's assets is bound or affected, or (ii)
result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, acceleration, or cancellation of, or result in the
creation of a lien or encumbrance on any assets of the Participant, including,
without limitation, the Interest, pursuant to, any notice, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise, or other
instrument or obligations to which the Participant is a party or by which the
Participant or any of the Participant's assets is bound or affected.

     3. Additional Documents. Upon request of the other party, the Participant
and IPG Laser hereby covenant and agree to execute and deliver all such other
and additional instruments and documents and do all such other acts and things
as may be necessary to more fully effectuate this Agreement or the Proxy.

     4. No Impairment. The Participant shall not take, or fail to take, any
action or avoid or seek to avoid the observance or performance of any of the
terms of this Agreement to be observed or performed hereunder or the Proxy, but
will at all times in good faith assist in the carrying out of all

                                       3

<PAGE>

the provisions of this Agreement and the Proxy and in the taking of all action
as may be necessary or appropriate in order to protect the rights of IPG Laser
hereunder and thereunder.

     5. Term. This Agreement shall terminate and shall have no further force or
effect at such time as the Interest shall have been transferred in its entirety
in compliance with the terms of this Agreement.

     6. Miscellaneous.

     (a) Severability. If any term, provision, covenant, representation,
warranty or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, then the remainder of the
terms, provisions, covenants, representations, warranties and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties agree to negotiate, in good
faith, a legal and enforceable substitute provision which most nearly effects
the parties' intent in entering into this Agreement.

     (b) Binding Effect and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but, except as otherwise
specifically provided herein, neither this Agreement nor any of the rights,
interests or obligations of any party hereunder may be assigned without the
prior written consent of the other parties hereto.

     (c) Amendments and Modification. This Agreement may not be modified,
amended, altered or supplemented except by the execution and delivery of a
written agreement executed by each of the parties hereto.

     (d) Waiver. No waiver by any party hereto of any condition or of any breach
of any provision of this Agreement shall be effective unless in writing,
executed on behalf of the party or parties against whom enforcement is sought.
No failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

     (e) Specific Performance; Injunctive Relief. The Participant acknowledges
that IPG Laser will be irreparably harmed and that there will be no adequate
remedy at law for a violation of any of the covenants, representations,
warranties or agreements of the Participant set forth herein. Therefore, the
Participant hereby unconditionally and irrevocably agrees that IPG Laser shall
be entitled to seek protective orders, injunctive relief and other remedies
available at law or in equity (including, without limitation, seeking specific
performance or the rescission of any Transfer of the Interest (or any portion
thereof) not made in strict compliance with this Agreement).

     (f) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
messenger or courier service, or mailed by registered or certified mail (return
receipt requested) or sent via facsimile (with acknowledgement of complete
transmission) to the parties at the following addresses (or at such

                                       4

<PAGE>

other address for a party as shall be specified by like notice), provided,
however, that notices sent by mail will not be deemed given until received:

                  If to IPG Laser, to:

                        IPG Laser GmbH
                        Siemensstrasse 7
                        D-57299 Burbach, Germany
                        Attn: Valentin P. Gapontsev
                        Fax: 49-27-3644-342

                  With a copy to:

                        IPG Photonics Corporation
                        50 Old Webster Road
                        Oxford, Massachusetts 01540
                        Attn: Angelo P. Lopresti
                        Fax: 508-373-1134

                  If to the Participant:

                        IPG Photonics Corporation
                        50 Old Webster Road
                        Oxford, Massachusetts 01540
                        Fax: (508) 373-1101

     (g) Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the Russian Federation, without giving
effect to any choice or conflict of law provision or rule (whether of the laws
of the Russian Federation or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the Russian Federation.

     (h) Entire Agreement. This Agreement contains the entire understanding of
the parties in respect of the subject matter hereof, and supersedes all prior
negotiations and understandings between the parties with respect to such subject
matter.

     (i) Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same instrument.

     (j) Effect of Headings. The section headings herein are for convenience
only and shall not affect the construction or interpretation of this Agreement.

     IN WITNESS WHEREOF, the undersigned have executed this Right of First Offer
Agreement on the date first above written.

                                             IPG LASER GMBH

                                             By: /s/ Eugene Shcherbakov
                                                --------------------------------
                                             Name:  Eugene Shcherbakov
                                             Title: Managing Director

                                       5
<PAGE>

                                             Valentin P. Gapontsev

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

                                             Scientific and Technical
                                             Association IRE Polus

                                             By: /s/ Igor Samartsev
                                                --------------------------------
                                             Name:  Igor Samartsev
                                             Title: Acting General Manager

                                       6
<PAGE>

                                    EXHIBIT A

                     Irrevocable Proxy Coupled with Interest

<PAGE>

                     IRREVOCABLE PROXY COUPLED WITH INTEREST

     Valentin P. Gapontsev (the "Participant") hereby irrevocably appoints IPG
Laser GmbH, a limited liability company organized under the laws of Germany
("IPG Laser"), as his sole and exclusive attorney-in-fact and proxy, with full
power of substitution and resubstitution, to vote and exercise all voting and
related rights (to the fullest extent that the Participant is entitled to do so
under applicable law) with respect to all of the Participant's voting or equity
interests in Scientific and Technical Association IRE Polus, a limited liability
company organized under the laws of the Russian Federation (the "Company"), that
now are or hereafter may be beneficially owned by the Participant, and any and
all other voting or equity interests in the Company issued or issuable in
respect thereof on or after the date hereof (collectively, the "Interest"), in
accordance with the terms of this Irrevocable Proxy Coupled With Interest (the
"Proxy"). The Interest beneficially owned by the Participant as of the date of
this Proxy is listed on the final page of this Proxy. Upon the Participant's
execution of this Proxy, any and all prior proxies given by the Participant with
respect to any portion of the Interest are hereby revoked and the Participant
agrees not to grant any subsequent proxies with respect to the Interest, or any
portion thereof.

     IPG Laser is hereby authorized and empowered by the Participant, at any
time, to act as the Participant's true and lawful attorney-in-fact and proxy to
vote the Interest, and to exercise all voting, consent and similar rights of the
Participant with respect to the Interest, including, without limitation, the
power to execute and deliver in the Participant's name any consent, certificate
or other document that may be required by law.

     For a period of three years from the date hereof, the Participant agrees
not to transfer, sell, exchange, pledge or otherwise dispose of or encumber the
Interest, or any portion thereof, or to make any offer or agreement relating
thereto except pursuant to and in compliance with the terms of that certain
Right of First Offer Agreement, dated as of November __, 2006, by and among IPG
Laser, the Company and the Participant. All authority herein conferred shall
survive the death or incapacity of the Participant and any obligation of the
Participant shall be binding upon the heirs, personal representatives,
executors, administrators successors and assigns of the Participant.

     IPG Photonics Corporation, a Delaware corporation ("IPG"), intends to enter
into an Underwriting Agreement (the "Underwriting Agreement") by and between it,
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman
Brothers Inc. and each of the other Underwriters named in Schedule A thereto
(collectively, the "Underwriters"), pursuant to which IPG intends to consummate
an initial public offering of shares of its common stock from which the
Participant will recognize a substantial benefit. This Proxy is being granted as
a material inducement to the Underwriters to enter into the Underwriting
Agreement and to consummate the transactions described therein, and is therefore
coupled with an interest and is irrevocable.

     This Proxy shall be governed by, construed and enforced in accordance with
the laws of the Russian Federation, without giving effect to any choice or
conflict of law provision or rule (whether of the laws of the

                                       8
<PAGE>

Russian Federation or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the Russian Federation.

     If any term, provision, covenant, representation, warranty or restriction
of this Proxy is held by a court of competent jurisdiction to be invalid, void
or unenforceable, then the remainder of the terms, provisions, covenants,
representations, warranties and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the Participant and IPG Laser agree to negotiate, in good faith, a legal and
enforceable substitute provision which most nearly effects the parties' intent
in entering into this Agreement.

Dated: November 1, 2006

                                                Valentin P. Gapontsev

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

                                                Interest beneficially owned:
                                                26.7% of the total voting equity
                                                interest in the Company
                                                Place of residence:
                                                Home address:
                                                Passport number and country of
                                                issuance:

Registered Address of IPG Laser:

Siemensstrasse 7
D-57299 Burbach, Germany

                                       9

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