CONFIDENTIAL SETTLEMENT AGREEMENT



          This CONFIDENTIAL SETTLEMENT AGREEMENT (this "Settlement"), dated as

of June 25, 2003, by and among JDS UNIPHASE CORPORATION, a Delaware corporation

("JDSU" or "Claimant"), and IPG PHOTONICS CORPORATION, a Delaware corporation

("IPG" or "Respondent");



                                   WITNESSETH:



          A. IPG and JDSU's predecessor in interest, SDL Inc., a Delaware

corporation ("SDL"), entered into a purchase and sale agreement entitled IPG

Photonics Corporation Purchase and Sale Agreement No. 1-99, dated May 11, 1999,

which was subsequently amended by the parties on or about May 18, 2000 and

amended a second time on or about November 15, 2000 (collectively, the

"Agreement"); and



          B. a dispute arose between IPG and SDL's successor in interest, JDSU,

concerning the parties' performance, rights, and obligations under the

Agreement; and



          C. JDSU has commenced an arbitration proceeding against IPG before the

American Arbitration Association, entitled JDS Uniphase Corporation against IPG

Photonics Corporation, AAA Number 74 181 01636 02, now pending before the AAA

San Jose Regional Office (the "Arbitration"), alleging that IPG has breached the

Agreement and now owes JDSU in excess of $10 million;



          D. JDSU also commenced a proceeding against IPG in Massachusetts state

court, entitled JDSU Uniphase Corp. v. IPG Photonics Corp., No. 02-1780, now

pending before the Superior Court of the Commonwealth of Massachusetts

requesting, among other things, equitable relief in the form of an attachment of

IPG's assets in Massachusetts (the "State Court Action").



          E. IPG has asserted counterclaims against JDSU and SDL in the

Arbitration and the State Court Action sounding in breach of contract, unfair

competition and violation of federal and state laws governing anti-trust and

unfair competition;



          F. Both parties have denied the others' operative allegations

contained in the Arbitration claim filed by JDSU and the counterclaims filed by

IPG; and



          G. IPG and JDSU each believes that it will be best served by ending

the disputes reflected in the Arbitration and the State Court Action and that

the continued prosecution of the Arbitration and the State Court Action will

entail the expenditure of substantial legal fees and management time for both

IPG and JDSU over the course of several years, resources that each of them

believes would be better spent in pursuit of such business interest; and



          H. Subject to the terms of this Settlement and the other instruments

and documents to be entered into by it pursuant hereto, JDSU is therefore

willing to dismiss the claims it has asserted against IPG in the Arbitration and

the State Court Action, and IPG is willing to dismiss the counterclaims that it

has asserted against JDSU in the Arbitration and the State Court Action; and



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          I. Accordingly, the parties hereto desire to settle their disputes

reflected in the Arbitration and the State Court Action on the terms and

conditions set forth herein;



     NOW, THEREFORE, in consideration of the mutual representations, warranties

and covenants set forth herein, the parties hereto hereby agree as follows:



1.   Representations and Warranties.



     Both IPG and JDSU hereby represent and warrant to the other that:



     A.   It has the corporate power and authority to enter into this Settlement

          and the other instruments and documents to be entered into by it

          pursuant hereto and to observe and perform its obligations hereunder

          and thereunder;



     B.   The execution and delivery of this Settlement and the other

          instruments and documents to be executed and delivered by it pursuant

          hereto, and the consummation of the transactions contemplated hereby

          and thereby, have been duly authorized by all necessary corporate

          action;



     C.   This Settlement and each other instrument and document to be executed

          and delivered by it pursuant hereto has been or, when executed and

          delivered, will have been, duly executed and delivered, and this

          Settlement and each such other instrument and document constitutes or,

          when executed and delivered by it, will constitute, a valid and

          binding agreement, enforceable against it in accordance with its terms

          (except insofar as enforceability may be limited by applicable

          bankruptcy, insolvency, reorganization, moratorium or similar laws

          affecting creditors' rights generally, or by principles governing the

          availability of equitable remedies);



     D.   None of the execution, delivery or performance of this Settlement and

          the other instruments and documents to be executed and delivered by it

          pursuant hereto, nor the consummation of the transactions contemplated

          hereby and thereby, nor compliance by it with the terms hereof and

          thereof, will: (i) conflict with or result in a breach of any of the

          provisions of its charter, by-laws, or equivalent governing documents;

          (ii) require any filing by it with, or any permit, authorization or

          consent from, any court, administrative agency, or other governmental

          or regulatory authority, foreign or domestic, or from any third party,

          except any filings or reports required to be made under and pursuant

          to applicable securities laws or the rules and regulations of any

          applicable stock exchange or market quotation system; (iii) result in

          a violation or breach of, or constitute (with or without due notice or

          lapse of time or both) a default under, any note, bond, mortgage,

          indenture, lease, license, franchise, permit or other instrument or

          agreement to which it is a party or by which it is bound or any of its

          assets is affected; or (iv) violate any order, writ, injunction,

          decree, statute or ordinance applicable to it; and,



     E.   It has not relied on any representation or warranty, written or oral,

          that is not set forth herein or in any of the instruments or documents

          executed pursuant hereto in entering into this Settlement and each

          other instrument and document to be executed and delivered by it

          pursuant hereto; it has entered into this Settlement and such other

          instruments and documents voluntarily and without duress, threat or

          undue influence;





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          it has been represented in negotiations relating to and in the

          preparation of this Settlement by independent counsel of its own

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