Contribution And Exchange Agreement

Exhibit 10.11


CONTRIBUTION AND EXCHANGE AGREEMENT
-----------------------------------


THIS AGREEMENT (this "Agreement") is by and between IPG PHOTONICS CORPORATION, a corporation organized under the laws of the State of Delaware ("Purchaser") and Dr. Valentin P. Gapontsev ("Seller"), the owner of 46% of the outstanding common stock of IPG Laser GmbH, a corporation organized under the laws of the Republic of Germany (the "Company").


RECITALS
--------


A. Purchaser owns 54% of the issued and outstanding equity interests in the Company and desires to purchase all of the issued and outstanding equity interests owned by Seller in the Company.


B. Seller owns 46% of the issued and outstanding equity interests in the Company.


C. Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, all of Seller's equity interests in and to the Company, all on the terms and conditions, and subject to the limitations and exclusions, set forth herein.


NOW, THEREFORE, in consideration of the purchase price described below, the representations, warranties, and mutual agreements contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:


Section 1


DEFINITIONS


1.1 The following capitalized terms used in this Agreement shall have the meanings (such definitions to be equally applicable to both the singular and plural forms of the terms defined) set forth in this Section 1. Except as
--------- otherwise indicated, all agreements or instruments herein defined shall mean such agreements or instruments as from time to time assigned, supplemented or amended or as the terms thereof may be waived or modified.


"Company" shall have the meaning set forth in the introductory paragraph
------- to this Agreement.


"Closing Date" shall mean any date before January 8, 2002 that Purchaser
------------ designates for the completion of the transactions contemplated herein or which is otherwise designated as a Closing Date pursuant to Section 2.1 hereof.


"Laser Shares" shall mean all of Seller's capital stock of or other equity
------------ interests in the Company.


"Lien" shall mean any liens, mortgages, security interests, encumbrances,
---- pledges, charges, adverse claims, options, buy-sell agreements, right of first refusal agreements, rights or restrictions of any character whatsoever.


"Material Adverse Effect" shall mean a material adverse effect on the
----------------------- business, assets, results of operations, financial condition or prospects of a Person, taken as a whole.


"Person" shall mean any individual, corporation, partnership, joint
------ venture, association, joint-stock company, trust, unincorporated organization or other legal entity or any government or any agency or political subdivision thereof.


"Purchaser Shares" shall mean 1,403,000 shares of the common stock, par
---------------- value $.0001 per share, of Purchaser (as adjusted to reflect stock splits, stock dividends and the like) which have an agreed value of $ US 20.00 per share.


"Sale Event" shall mean the occurrence of any of the following events: (a)
---------- any merger or consolidation of the Purchaser into or with another corporation; (b) any sale of all or substantially all of the assets of the Purchaser; or (c) any other transaction by or as a result of which any Person acquires or holds stock representing a majority of Purchaser's outstanding voting power.


"Sale Price" shall mean the Purchaser Shares.
----------


Section 2


ACQUISITION OF SHARES


2.1 Acquisition. On the terms and subject to the conditions hereof, and in
----------- reliance on the representations and warranties of Seller (in the case of Purchaser) and of Purchaser (in the case of Seller) on the Closing Date, Seller shall sell, transfer, assign, convey and deliver to Purchaser, and Purchaser shall purchase and accept from Seller, the Laser Shares, in consideration of the delivery to Seller of the Sale Price. The Closing Date shall be a date designated by Purchaser upon written notice to Seller (which notice shall be given no less than five (5) days before the Closing Date). Seller shall sell the Laser Shares to the Purchaser in accordance with this Section 2.1 if (a) reasonably requested by any Person acting as underwriter of the Purchaser in connection with any initial public soliciting of Purchaser's common stock or (b) a Sale Event occurs. The Closing Date shall be the day of acceptance of the Offer for Sale and Transfer.


2.2 Approvals. Purchaser and Seller agree to use their best efforts to
--------- obtain expeditiously any and all governmental and other consents and approvals required to be obtained in connection with this Agreement and the closing of the transactions contemplated hereby.


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2.3 Withholding Taxes. The Sale Price to be paid on the Closing Date shall
----------------- be reduced by any applicable withholding taxes required under applicable law to be withheld and paid by Purchaser to U.S. or other taxing authorities with respect to the cash portion of the Sale Price. Such withholding shall be at the applicable statutory rate unless Seller provides Purchaser with an opinion of counsel (the "Tax Opinion") that no such withholding is required or that withholding is required at a lower rate. On the Closing Date, Purchaser shall withhold such amounts as calculated in the immediately preceding sentence and confirmation to Purchaser's independent auditors of the amounts of taxes required to be withheld and paid by Purchaser. Any balance of the amount so withheld shall be remitted promptly to Seller.


Section 3


CLOSING


3.1 Closing. The closing of the transactions contemplated herein (the
------- "Closing") will take place at the offices of Schleifenbaum, Adler & Partner GbR, Hindenburgstrasse 1, 57072 Siegen, Germany (or at such other location as the parties hereto may agree) on the Closing Date.


3.2 Seller is not limited to exercise all company rights which are related with the Shareholdings offered for sale until acceptance is provided for the offer. This shall also applied to the right to draw profits. The Purchaser is not entitled to the profits from the operation in the period between the offer and its acceptance.


Section 4


CONDITIONS TO CLOSING


4.1 Conditions Precedent to the Obligations of Purchaser. The obligations
---------------------------------------------------- of Purchaser hereunder are subject to the fulfillment (or waiver by Purchaser) on or prior to the Closing Date of each of the following conditions precedent:


(a) Approvals. The Company and Seller shall have taken all such actions
--------- required to be taken by either of them with respect to this Agreement.


(b) No Liens. The Laser Shares shall have been transferred to Purchaser
-------- free and clear of all Liens.


(c) Representations and Warranties. All of Seller's representations and
------------------------------ warranties in this Agreement must be accurate in all material respects as of the date of this Agreement and as of the Closing Date.


4.2 Conditions Precedent to the Obligations of Seller. The obligations of
------------------------------------------------- Seller hereunder are subject to the fulfillment (or waiver by Seller) on or prior to the Closing Date of the following condition precedent:


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(a) Approvals. Purchaser shall have taken all such actions required to be
--------- taken by it with respect to this Agreement.


Section 5


REPRESENTATIONS AND WARRANTIES


5.1 Representations and Warranties of Seller. Seller represents and
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