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                                                                   EXHIBIT 10.31

                             SUBSCRIPTION AGREEMENT

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

Gentlemen:

     1. Subscription JDS Uniphase Corporation, a Delaware corporation (the
"Purchaser"), intending to be legally bound, hereby irrevocably agrees to
purchase from IPG Photonics Corporation, a Delaware corporation (the "Company"),
(a) 2,684,211 shares of Series D Preferred Stock, par value $.0001 per share, of
the Company (the "Shares"), at a purchase price of $1.90 per Share and (b) a
Convertible Promissory Note in the principal amount of $5,100,000 (the
"Convertible Note"). The number of Shares and the Convertible Note subscribed
for pursuant to this Subscription Agreement equal the number of Shares and the
principal amount of the Convertible Note intended to be issued and purchased
pursuant to that certain Settlement Agreement, dated as of June 25, 2003, by and
between the Company and the Purchaser (the "Settlement Agreement"). Together
with this Subscription Agreement, the Purchaser is delivering completed and
executed signature pages to the Series D Preferred Stockholders Agreement
between the Company and the Purchaser (the "Series D Preferred Stockholders
Agreement"), and the Registration Rights Agreement between the Company and the
Purchaser (the "Registration Rights Agreement").

     2. Payment. The Purchaser and the Company agree that the consideration for
the Shares and the Convertible Note subscribed for pursuant to this Agreement
shall solely consist of the release and settlement of claims by the Purchaser as
described in the Settlement Agreement and that no other consideration shall be
due or owing with respect to the purchase price for the Shares and the
Convertible Note.

     3. Purchaser Representations and Warranties. The Purchaser hereby
represents and warrants to the Company, acknowledges and agrees as follows:

          (a) The Purchaser is purchasing the Shares and the Convertible Note
     for its own account, for investment only and not with a view to, or any
     present intention of, effecting a distribution of such securities or any
     part thereof except pursuant to a registration or an available exemption
     under applicable law. The Purchaser acknowledges that the Shares and the
     Note have not been, the shares of Series D Convertible Preferred Stock of
     the Company issuable upon conversion of the Convertible Note (the
     "Conversion Shares"), and shares of Common Stock, par value $.0001 per
     share, of the Company (the "Common Shares"), issuable upon conversion of
     the Shares or the Conversion Shares (the Shares, the Note, the Conversion
     Shares together with the Common Stock, the "Securities"), will not be,
     registered under the Securities Act of 1933, as amended (the "Securities
     Act"), or the securities laws of any state or other jurisdiction and cannot
     be disposed of unless they are subsequently registered under the Securities
     Act and any applicable state laws or an exemption from such registration is
     available.

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          (b) Neither the Securities and Exchange Commission, any state
     securities commission nor any other regulatory authority has approved the
     Securities or passed upon or endorsed the merits of the sale of the Shares
     or the Convertible Note or confirmed the accuracy or determined the
     adequacy of any materials of the Company submitted to you. Any
     representation to the contrary is unlawful.

          (c) The Purchaser is unaware of, is in no way relying on, and did not
     become aware of the offering of the Shares or the Convertible Note through
     or as a result of, any form of general solicitation or general advertising
     including, without limitation, any article, notice, advertisement or other
     communication published in any newspaper, magazine or similar media or
     broadcast over television or radio, in connection with the sale of the
     Shares or the Convertible Note and is not subscribing for Shares or the
     Convertible Note and did not become aware of the sale of the Shares or the
     Convertible Note through or as a result of any seminar or meeting to which
     the Purchaser was invited by, or any solicitation of a subscription by, a
     person not previously known to the Purchaser in connection with investments
     in securities generally.

          (d) The Purchaser understands that the exemption from registration
     afforded by Rule 144 (the provisions of which are known to the Purchaser)
     promulgated under the Securities Act depends on the satisfaction of various
     conditions and that, if applicable, Rule 144 may only afford the basis for
     sales under certain circumstances and only in limited amounts.

          (e) The Purchaser is an "accredited investor," as such term is defined
     in Rule 501 (the provisions of which are known to the Purchaser)
     promulgated under the Securities Act. The Purchaser has such knowledge and
     experience in financial, tax and business matters so as to enable the
     Purchaser to utilize the information made available to it in connection
     with the investment in the Shares and the Convertible Note, to evaluate the
     merits and risks of an investment in the Shares and the Convertible Note,
     and to make an informed investment decision with respect thereto.

          (f) The Purchaser hereby acknowledges and agrees that the purchase and
     sale of the Shares and the Convertible Note is intended to be exempt from
     registration under the Securities Act by virtue of Section 4(2) of the
     Securities Act, and, if applicable, in the sole judgment of the Company,
     the provisions of Regulation D thereunder, which exemption is dependent
     upon the truth, completeness and accuracy of the statements made by the
     Purchaser herein and in any other documents furnished by the Purchaser to
     the Company. The Purchaser acknowledges and agrees that it will not sell or
     transfer all or any part of the Shares or the Convertible Note or the
     Convertible Note except in accordance with the terms of the Series D
     Preferred Stockholders Agreement.

          (g) The Purchaser has full right, authority and power under its
     charter and by-laws to enter into this Subscription Agreement, the Series D
     Preferred Stockholders Agreement, the Registration Rights Agreement, the
     Note, and the Amendment to Stockholders Agreement by and among the Company,
     the Purchaser, the Founders and the holders of


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     Series B Preferred Stock of the Company, and all agreements, documents and
     instruments contemplated hereby and thereby (the "Transaction Documents")
     executed by the Purchaser pursuant thereto and to carry out the
     transactions contemplated hereby and thereby. This Transaction Documents
     executed by the Purchaser pursuant thereto are valid and binding
     obligations of the Purchaser enforceable in accordance with their
     respective terms, subject, in each case, to bankruptcy, insolvency,
     reorganization, moratorium and similar laws of general application relating
     to or affecting creditors' rights and to general principles of equity,
     including principles of commercial reasonableness, good faith and fair
     dealing. The execution, delivery and performance of the Transaction
     Documents have been duly authorized by all necessary action under the
     Purchaser's charter or by-laws. The execution, delivery and performance by
     the Purchaser of the Transaction Documents do not and will not: (i) violate
     or result in a violation of, conflict with or constitute or result in a
     default (whether after the giving of notice, lapse or time or both) under,
     accelerate any obligation under, or give rise to a right of termination of,
     any material contract, agreement, lease, obligation, permit, license or
     authorization to which the Purchaser is a party or by which the Purchaser
     or its assets is bound, or any provision of such Purchaser's organizational
     documents; (ii) violate or result in a violation of, or constitute a
     default (whether after the giving of notice, lapse of time or both) under,
     any provision of any law, regulation or rule, or any order of, or any
     restriction imposed by, any court or governmental agency applicable to the
     Purchaser; or (iii) require from the Purchaser any notice to, declaration
     or filing with, or consent or approval of, any governmental authority or
     other third party.

          (h) The Purchaser is not relying on the Company or any of its
     respective employees, attorneys or agents with respect to the legal, tax,
     economic and related considerations of an investment in the Shares or the
     Convertible Note, and the Purchaser has relied on the advice of, or has
     consulted with, only its own attorney, accountant, purchaser representative
     and/or tax advisor.

     4. Company Representations and Warranties. The Company hereby represents
and warrants to the Purchaser as follows:

          (a) The Company is a corporation duly organized, validly existing and
     in good standing under the laws of the State of Delaware, has all requisite
     power and authority to own, lease and operate its properties, to carry on
     its business as currently being conducted, to enter into the Transaction
     Documents and to perform its obligations thereunder.

          (b) The execution, delivery and performance by the Company of the
     Transaction Documents, and the consummation of the transactions
     contemplated thereby have been duly authorized by all necessary action on
     the part of the Company. Except for those approvals and consents from the
     Board of Directors and its shareholders which have been obtained already,
     and no other corporate or stockholder proceedings on the part of the
     Company, or its Board of Directors or stockholders, are necessary to
     authorize or approve the Transaction Documents or to consummate the
     transactions contemplated thereby.


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          (c) The Transaction Documents, upon their execution and delivery by
     the Company, will be, valid and binding obligations of the Company,
     enforceable against the Company in accordance with their respective terms,
     subject, in each case, to bankruptcy, insolvency, reorganization,
     moratorium and similar laws of general application relating to or affecting
     creditors' rights and to general principles of equity, including principles
     of commercial reasonableness, good faith and fair dealing.

          (d) The execution, delivery and performance by the Company of the
     Transaction Documents do not and will not: (i) violate or result in a
     violation of, conflict with or constitute or result in a default (whether
     after the giving of notice, lapse or time or both) under, accelerate any
     obligation under, or give rise to a right of termination of, any material
     contract, agreement, lease, obligation, permit, license or authorization to
     which the Company is a party or by which the Company or its assets is
     bound, or any provision of such Purchaser's certificate of incorporation or
     by-laws; (ii) violate or result in a violation of, or constitute a default
     (whether after the giving of notice, lapse of time or both) under, any
     provision of any law, regulation or rule, or any order of, or any
     restriction imposed by, any court or governmental agency applicable to the
     Company; or (iii) require from the Company any notice to, declaration or
     filing with, or consent or approval of, any governmental authority or other
     third party.

          (e) No filing with, and no permit, authorization, consent or approval
     of, any person (governmental or private) is necessary for the consummation
     by the Company of the transactions contemplated by the Transaction
     Documents.

          (f) The authorized capital stock of the Company immediately prior to
     the delivery of the Shares shall consist of (i) 70,000,000 shares of Common
     Stock, $.0001 par value per share, of which 38,441,668 shares are
     outstanding and; (ii) 15,000,000 shares of blank check preferred stock, (A)
     500,000 of which have been designated as Series A Preferred Stock, $.0001
     par value per share (the "Series A Preferred Stock"), of which 500,000
     shares are outstanding, (B) 3,800,000 of which have been designated as
     Series B Convertible Participating Preferred Stock, $.0001 par value per
     share (the "Series B Preferred Stock"), of which 3,800,000 shares are
     outstanding, (C) 2,000,000 of which have been designated as Series C
     Convertible Preferred Stock, $.0001 par value per share, of which none are
     outstanding, and (D) 5,400,000 of which have been designated as Series D
     Convertible Preferred Stock, $.0001 par value per share, of which none are
     outstanding. Immediately after the issuance of the Shares, (I) the
     outstanding shares of Series A Preferred Stock shall be convertible into
     549,451 shares of Common Stock and (II) the outstanding shares of Series B
     Preferred Stock shall be convertible into 4,335,920 shares of Common Stock.
     Except for (X) the warrants to purchase an aggregate of $23,750,000 of
     Common Stock at an equivalent per share price of 50% of an initial public
     offering or sale of the Company (copies of which have been provided to the
     Purchaser) which warrants were issued in connection with the Series B
     Preferred Stock of the Company, (Y) 7,500,000 shares of Common Stock
     reserved for issuance to employees, consultants and directors under the
     Company's 2000 Incentive Compensation Plan (the "Plan"), of which (i)
     1,060,974 shares of Common


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     Stock have been issued pursuant to option exercises, (ii) 4,955,353 shares
     are subject to outstanding, unexercised options and (iii) 1,483,673 shares
     are available for issuance thereunder and (Z) the shares of outstanding
     Series A Preferred Stock and Series B Preferred Stock, the Shares and the
     Convertible Note, there are, immediately after delivery of the Shares, no
     options, warrants, calls, convertible notes, agreements, commitments or
     other rights presently outstanding that would obligate the Company to
     issue, deliver or sell shares of its capital stock, or to grant, extend or
     enter into any such option, warrant, call, convertible note, agreement,
     commitment or other right. In addition to the foregoing, as of the date
     hereof, the Company has no bonds, debentures, notes or other indebtedness
     issued or outstanding that have voting rights in the Company. The Company
     has reserved for issuance 2,684,211 Conversion Shares and 5,368,422 Common
     Shares with respect to the Shares and the Conversion Shares. The Conversion
     Shares and the Common Shares are duly authorized and, when issued upon
     conversion in accordance with the terms of the Company's certificate of
     incorporation, will be duly authorized, validly issued, fully paid and
     non-assessable Series D Preferred Stock and Common Stock, respectively, and
     free and clear of all restrictions, other than restrictions imposed on
     transfer by the Securities Act, or applicable U.S. state laws and as set
     forth in this Agreement or the Series D Stockholders Agreement.

          (g) When delivered to the Purchaser in accordance with the terms
     hereof, the Shares shall be (i) duly authorized, fully paid and
     non-assessable, and (ii) free and clear of all liens other than
     restrictions imposed by federal and state securities laws.

     5. Deliveries by the Company to the Purchaser. The Company shall have
delivered, or shall have caused to be delivered, to the Purchaser, all in form
and substance reasonably satisfactory to the Purchaser, the following:

          (a) A stock certificate registered in the name of the Purchaser
     evidencing the Shares acquired from the Company hereunder;

          (b) The Convertible Note executed by the Company;

          (c) The Series D Preferred Stockholders Agreement executed by the
     Company;

          (d) The Registration Rights Agreement executed by the Company;

          (e) The Amendment to Stockholders Agreement, executed by the Company,
     the founders of the Company and holders of at least a majority of the
     Series B Preferred Stock of the Company;

          (f) A certificate issued by the Secretary of State of the State of
     Delaware certifying that the Company has legal existence and is in good
     standing;

          (g) A certificate issued by the Secretary of State of the State of
     Delaware certifying the copy of the certificate of incorporation for the
     Company, as amended, including the certificate of designations containing
     rights, privileged and limitations of the Series D Preferred Stock in form
     and substance satisfactory to the Purchaser;


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          (h) An opinion of counsel of the Company in form and substance
     reasonably satisfactory to the Purchaser as to the matters contained
     therein;

          (i) An agreement or consents from sufficient holders to waive any
     right to purchase additional securities of the Company which right is
     triggered by the issuance of the Shares; and

          (j) Such other supporting documents and certificates as the Purchaser
     may reasonably request and as may be required pursuant to this Subscription
     Agreement.

     6. Deliveries by the Purchaser to the Company. The Purchaser shall have
delivered, or shall have caused to be delivered, to the Purchaser, all in form
and substance satisfactory to the Company, the following:

          (a) The Series D Preferred Stockholders Agreement executed by the
     Purchaser;

          (b) The Registration Rights Agreement executed by the Purchaser;

          (c) The Convertible Note executed by the Purchaser; and

          (d) Such other supporting documents and certificates as the Company
     may reasonably request and as may be required pursuant to this Subscription
     Agreement.

     7. Modification. This Subscription Agreement shall not be modified or
waived except by an instrument in writing signed by the party against whom any
such modification or waiver is sought.

     8. Notices All notices, consents, waivers, and other communications under
this Subscription Agreement must be in writing and will be deemed to have been
duly given when (i) delivered by hand (with written confirmation of receipt), or
(ii) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the appropriate
addresses and facsimile numbers set forth below (or to such other addresses and
facsimile numbers as a party may designate by written notice to the other
parties):

     To the Purchaser: JDS Uniphase Corporation
                       1768 Automation Parkway
                       San Jose, California 95131
                       Attention: General Counsel
                       Facsimile No.: (408) 546-4350

     To the Company:   IPG Photonics Corporation
                       50 Old Webster Road
                       Oxford, Massachusetts 01540
                       Attention: General Counsel
                       Facsimile No.: (508) 373-1101

     9. Assignability. This Subscription Agreement and the rights, interests and
obligations hereunder are not transferable or assignable by the Purchaser.


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     10. Applicable Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware relating to
contracts entered into and to be performed wholly within such state. THE
PURCHASER AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS SUBSCRIPTION AGREEMENT OR ANY DOCUMENT
OR AGREEMENT CONTEMPLATED HEREBY.

     11. Use of Pronouns. All pronouns and any variations thereof used herein
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or persons referred to may require.

     12. Miscellaneous

          (a) This Subscription Agreement, together with the Convertible Note,
     the Series D Preferred Stockholders Agreement, the Registration Rights
     Agreement, the Settlement Agreement and the other agreements and
     instruments being executed and delivered in connection with the Settlement
     Agreement, constitute the entire agreement between the Purchaser and the
     Company with respect to the subject matter hereof and supersede all prior
     oral or written agreements and understandings. The terms and provisions of
     this Subscription Agreement may be waived, or consent for the departure
     therefrom granted, only by a written document executed by the party
     entitled to the benefits of such terms or provisions.

          (b) The Purchaser's and the Company's representations, warranties and
     covenants made in this Subscription Agreement shall survive the execution
     and delivery hereof and delivery of the Shares.

          (c) Each of the parties hereto shall pay its own fees and expenses
     (including the fees of any attorneys, accountants, appraisers or others
     engaged by such party) in connection with this Subscription Agreement and
     the transactions contemplated hereby whether or not the transactions
     contemplated hereby are consummated.

          (d) This Subscription Agreement may be executed in one or more
     counterparts each of which shall be deemed an original, but all of which
     shall together constitute one and the same instrument.

          (e) Each provision of this Subscription Agreement shall be considered
     separable and if for any reason any provision or provisions hereof are
     determined to be invalid or contrary to applicable law, such invalidity or
     illegality shall not impair the operation of or affect the remaining
     portions of this Subscription Agreement.

          (f) Paragraph titles are for descriptive purposes only and shall not
     control or alter the meaning of this Subscription Agreement as set forth in
     the text.

                          [The signature page follows]


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     IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 13th day of August, 2003.

                                        JDS UNIPHASE CORPORATION


                                        By: /s/ Christopher Dewees
                                            ------------------------------------
                                        Name: Christopher Dewees
                                        Title: Vice President

                                        1768 Automation Parkway
                                        San Jose, California 95131
                                        Attention: General Counsel
                                        Facsimile No.: (408) 546-4350

     SUBSCRIPTION AGREED TO this 13th day of August, 2003.

                                        IPG PHOTONICS CORPORATION


                                        By: /s/ Valentin P. Gapontsev
                                            ------------------------------------
                                        Name: Valentin P. Gapontsev
                                        Title: CEO and Chairman


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