T-3/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1 to

FORM T-3

FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES

UNDER THE TRUST INDENTURE ACT OF 1939

GSI GROUP CORPORATION

(Issuer)

GSI GROUP INC.

EXCEL TECHNOLOGY, INC.

CAMBRIDGE TECHNOLOGY, INC.

CONTINUUM ELECTRO-OPTICS, INC.

CONTROL LASER CORPORATION

THE OPTICAL CORPORATION

PHOTO RESEARCH, INC.

QUANTRONIX CORPORATION

SYNRAD, INC.

MICROE SYSTEMS CORP.

MES INTERNATIONAL INC.

(Guarantors)

(Names of Applicants)

125 Middlesex Turnpike

Bedford, Massachusetts 01730

(Address of Principal Executive Office)

SECURITIES TO BE ISSUED UNDER THE

INDENTURE TO BE QUALIFIED

Title of Class	Amount
12.25% Senior Secured PIK Election Notes due 2014	$107,040,000 Aggregate Original Principal Amount

Approximate date of proposed public offering:

As soon as practicable after the date of this Application for Qualification.

Michael Katzenstein

Chief Restructuring Officer

GSI Group Corporation

125 Middlesex Turnpike

Bedford, Massachusetts 01730

(781) 266-5700

(Name and address of Agent for Service)

With copies to:

Robert D. Sanchez, Esq.

Wilson Sonsini Goodrich & Rosati LLP

1301 Avenue of the Americas, 40^th Floor

New York, New York 10019

and

William R. Baldiga, Esq.

Brown Rudnick LLP

One Financial Center

Boston, Massachusetts 02111

The obligor hereby amends this application for qualification on such date or dates as may be necessary to delay its effectiveness until (i) the 20th day after the filing of an amendment which specifically states that it shall supersede this application, or (ii) such date as the Commission, acting pursuant to Section 307(c) of the Trust Indenture Act of 1939, as amended, may determine upon the written request of the obligor.

EXPLANATORY NOTE

This Amendment No. 1 to Form T-3 is being filed to amend and restate in its entirety the Application for Qualification of Indentures on Form T-3 (File No. 022-28929) filed by GSI Group Corporation, a Michigan corporation, with the Securities and Exchange Commission on January 14, 2010 (the “Application”), to include certain updated information since the original filing date of the Application.

GENERAL

1. General Information

(a) Form of organization.

Applicant	Form of Organization	Jurisdiction of Organization
GSI Group Corporation (the “Company”)	Corporation	Michigan
GSI Group Inc.	Corporation	New Brunswick, Canada
Excel Technology, Inc.	Corporation	Delaware
Cambridge Technology, Inc.	Corporation	Massachusetts
Continuum Electro-Optics, Inc.	Corporation	Delaware
Control Laser Corporation	Corporation	Florida
The Optical Corporation	Corporation	California
Photo Research, Inc.	Corporation	Delaware
Quantronix Corporation	Corporation	Delaware
Synrad, Inc.	Corporation	Washington
MicroE Systems Corp.	Corporation	Delaware
MES International Inc.	Corporation	Delaware

Except for the Company, each of the foregoing entities shall be referred to herein collectively as the “Guarantors”. The Company and the Guarantors shall be referred to herein collectively as the “Applicants”.

(b) State or other sovereign power under the laws of which organized.

See the information provided in response to Item 1(a).

2. Securities Act Exemption Applicable

The Company will issue, pursuant to the terms and conditions of the Final Fourth Modified Joint Chapter 11 Plan of Reorganization for MES International Inc., GSI Group Inc. and GSI Group Corporation (the “Debtors”), as filed on May 24, 2010 and as supplemented and confirmed by the United States Bankruptcy Court for the District of Delaware on May 27, 2010 (the “Plan”) (Case No. 09-14109-PJW), under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”), $107,040,000 aggregate principal amount of 12.25% Senior Secured PIK Election Notes due 2014 (the “Notes”) under the indenture to be qualified by this Application for Qualification, the form of which is filed as Exhibit T3C (the “Indenture”), on a pro rata basis to each holder of an allowed Class 5 Note Claim (as defined in the Plan), on the date upon which the Plan becomes effective, which is expected to be on or before July 23, 2010 (the “Effective Date”). Additional information regarding the Debtors and the Plan is set forth in that certain Disclosure Statement relating to the Plan, dated November 20, 2009, of the Debtors.

The Company is relying upon the exemption from the registration requirement of the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 1145 under the Bankruptcy Code. Section 1145(a)(1) of the Bankruptcy Code exempts an offer and sale of securities under a plan of reorganization from registration under the Securities Act and state securities laws if three principal requirements are satisfied: (i) the securities must be offered and sold under a plan of reorganization and must be securities of the debtor, an affiliate participating in a joint plan with the debtor or a successor to the debtor under the plan; (ii) the recipients of the securities must hold a prepetition or administrative expense claim against the debtor or an interest in the debtor; and (iii) the securities must be issued entirely in exchange for the recipient’s claim against or interest in the debtor, or principally in such exchange and partly for cash or property. The applicants believe that the issuance of the Notes to the holders of allowed Class 5 Notes Claims (as defined in the Plan) will satisfy the aforementioned requirements.

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AFFILIATIONS

3. Affiliates

The following is a list of affiliates of the Applicants as of the date hereof and upon consummation of the Plan.

Affiliate	Jurisdiction of Formation	Owner	Percentage of Voting Securities or Other Bases of Control of Owner
GSI Group Inc.	Canada	Public shareholders	100.0	%
GSI Group Corporation	Michigan	GSI Group Inc.	100.0	%
GSI Group Japan	Japan	GSI Group Inc.	100.0	%
GSI Group Singapore Pte. Ltd.	Singapore	GSI Group Inc.	100.0	%
GSI Group Limited	United Kingdom	GSI Group Inc.	100.0	%
GSI Group GmbH	Germany	GSI Group Inc.	100.0	%
General Scanning Securities Corporation	Massachusetts	GSI Group Corporation	100.0	%
GSI Lumonics Asia Pacific Ltd.	Hong Kong	GSI Group Corporation	100.0	%
Excel Technology, Inc.	Delaware	GSI Group Corporation	100.0	%
MicroE Systems Corp.	Delaware	GSI Group Corporation	100.0	%
MES International Inc.	Delaware	MicroE Systems Corp.	100.0	%
GSI Group Precision Technologies (Suzhou) Co., Ltd.	China	GSI Group Limited	100.0	%
GSI Lumonics SARL	France	GSI Group Limited	100.0	%
Westwind Air Bearings Limited	United Kingdom	GSI Group Limited	100.0	%
Cambridge Technology, Inc.	Massachusetts	Excel Technology, Inc.	100.0	%
The Optical Corporation	California	Excel Technology, Inc.	100.0	%
Control Laser Corporation (d/b/a Baublys Control Laser)	Florida	Excel Technology, Inc.	100.0	%
Continuum Electro-Optics, Inc.	Delaware	Excel Technology, Inc.	100.0	%
Synrad, Inc.	Washington	Excel Technology, Inc.	100.0	%
Photo Research, Inc.	Delaware	Excel Technology, Inc.	100.0	%
Quantronix Corporation	Delaware	Excel Technology, Inc.	100.0	%
Excel Technology Asia Sdn. Bhd.	Malaysia	Excel Technology, Inc.	99.99	%
Excel Technology Europe GmbH	Germany	Excel Technology, Inc.	100.0	%
Excel Technology Lanka (Private) Ltd.	Sri Lanka	Excel Technology, Inc.	99.99	%
D Green (Electronics) Ltd.	United Kingdom	Excel Technology, Inc.	100.0	%
Excel Technology Japan Holding Co., Ltd.	Japan	Excel Technology, Inc.	100.0	%
Excel Technology Japan K.K.	Japan	Excel Technology Japan Holding Co., Ltd.	100.0	%
Excel Technology Italy Srl	Italy	Excel Technology Europe GmbH	100.0	%
Baublys Control Laser GmbH	Germany	Excel Technology Europe GmbH	100.0	%
Excel Technology France S.A.S.	France	Excel Technology Europe GmbH	100.0	%
Excel Laser Technology Private Limited	India	Excel Technology, Inc.	50.0	%

Certain directors and executive officers of the Applicants listed in Item 4 below may also be deemed affiliates of the Applicants by virtue of their respective positions with the Applicants. Certain persons listed in Item 5 may be deemed to be affiliates of the Applicants by virtue of their current and/or anticipated holdings of voting securities of the Applicants.

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MANAGEMENT AND CONTROL

4. Directors and Executive Officers

The following tables list the names and offices held by all directors and executive officers of the Applicants as of the date hereof, which are expected to remain the same as of the Effective Date of the Plan unless otherwise noted.

(a) The Company

Pursuant to the Company’s Articles of Incorporation and Bylaws, the Company does not have a board of directors. Rather, the usual powers, authorities and obligations ordinarily delegated to a board of directors have been assumed by the Company’s sole shareholder, GSI Group Inc. From and after the Effective Date, the sole shareholder shall continue to be authorized to take actions required to be taken by the board of directors of the Company, as reorganized. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of the Company, as reorganized, shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of the Company. The mailing address of each executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Michael Katzenstein	Chief Restructuring Officer
Anthony J. Bellantuoni	Vice President and Secretary

(b) The Guarantors

(1) GSI Group Inc.

The current directors and officers of GSI Group Inc. are the individuals included in the following table. The mailing address of each director and executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Richard B. Black	Chairman of the Board of Directors
Garrett A. Garrettson, Ph.D.	Director
Phillip A. Griffiths, Ph.D.	Director
Marina Hatsopoulos	Director
Byron O. Pond	Director
Benjamin J. Virgilio	Director
Michael Katzenstein	Chief Restructuring Officer
Glenn E. Davis	Principal Financial Officer and Principal Accounting Officer
Anthony J. Bellantuoni	Vice President of Corporate Resources
Philippe Brak	President and General Manager
Stephen Webb	Managing Director

On the Effective Date, the board of directors of GSI Group Inc. shall be set at seven members, to include two directors selected by the certain holders (the “Required Noteholders”) of the Company’s currently outstanding 11% Senior Notes due 2013 in the principal amount of $210 million (“Senior Notes”), two directors with industry expertise selected by the Official Committee of Equity Holders in the Debtors’ cases under the Bankruptcy Code (the “Equity Committee”), one director selected by mutual agreement between the Required Noteholders and the Equity Committee, one director to be selected from the Company’s current board of directors and the principal executive officer of GSI Group Inc., as reorganized (“Reorganized Holdings”). The following six persons have been selected to serve on board of directors of Reorganized Holdings as of the Effective Date: Byron O. Pond, K. Peter Heiland, Stephen W. Bershad, Eugene I. Davis, Ira J. Lamel and Michael Katzenstein. In addition to these six persons, one additional person selected by mutual agreement between the Required Noteholders and the Equity Committee (the “Consensual Board Member”) will serve on the Board of Directors of Reorganized Holdings. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of GSI Group Inc., as reorganized, shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of GSI Group Inc.

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(2) Excel Technology, Inc.

The current director and officers of Excel Technology, Inc. are the individuals included in the following table. From and after the Effective Date, the members of the board of directors of Excel Technology, Inc. shall be selected and determined in accordance with the provisions of the Confirmation Order for the Plan (the “Confirmation Order”), the constituent documents of Excel Technology, Inc. and applicable law. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of Excel Technology, Inc. shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of Excel Technology, Inc. The mailing address of each director and executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Michael Katzenstein	President
Anthony J. Bellantuoni	Director and Secretary

(3) Cambridge Technology, Inc.

The current directors and officers of Cambridge Technology, Inc. are the individuals included in the following table. From and after the Effective Date, the members of the board of directors of Cambridge Technology, Inc. shall be selected and determined in accordance with the provisions of the Confirmation Order, the constituent documents of Cambridge Technology, Inc. and applicable law. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of Cambridge Technology, Inc. shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of Cambridge Technology, Inc. The mailing address of each director and executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Redmond P. Aylward	Director, President, Treasurer and Secretary
Anthony J. Bellantuoni	Director, Assistant Secretary

(4) Continuum Electro-Optics, Inc.

The current directors and officers of Continuum Electro-Optics, Inc. are the individuals included in the following table. From and after the Effective Date, the members of the board of directors of Continuum Electro-Optics, Inc. shall be selected and determined in accordance with the provisions of the Confirmation Order, the constituent documents of Continuum Electro-Optics, Inc. and applicable law. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of Continuum Electro-Optics, Inc. shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of Continuum Electro-Optics, Inc. The mailing address of each director and executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Anthony J. Bellantuoni	Director, Assistant Secretary
Laurence Cramer	President
Kurt Fredrickson	Vice President - Marketing
Frank Romero	Controller

(5) Control Laser Corporation

The current directors and officers of Control Laser Corporation are the individuals included in the following table. From and after the Effective Date, the members of the board of directors of Control Laser Corporation shall be selected and determined in accordance with the provisions of the Confirmation Order, the constituent documents of Control Laser Corporation and applicable law. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of Control Laser Corporation shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of Control Laser Corporation. The mailing address of each director and executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Anthony J. Bellantuoni	Director, Assistant Secretary
Greg Anderson	President
Carmela Dimaio	Treasurer/Controller

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(6) The Optical Corporation

The current directors and officers of The Optical Corporation are the individuals included in the following table. From and after the Effective Date, the members of the board of directors of The Optical Corporation shall be selected and determined in accordance with the provisions of the Confirmation Order, the constituent documents of The Optical Corporation and applicable law. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of The Optical Corporation shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of The Optical Corporation. The mailing address of each director and executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Anthony J. Bellantuoni	Director, Assistant Secretary
Francis Dominic	President
Gary Keene	Vice President - Operations

(7) Photo Research, Inc.

The current directors and officers of Photo Research, Inc. are the individuals included in the following table. From and after the Effective Date, the members of the board of directors of Photo Research, Inc. shall be selected and determined in accordance with the provisions of the Confirmation Order, the constituent documents of Photo Research, Inc. and applicable law. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of Photo Research, Inc. shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of Photo Research, Inc. The mailing address of each director and executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Anthony J. Bellantuoni	Director, Assistant Secretary
Francis Dominic	President
Gary Keene	Vice President - Operations

(8) Quantronix Corporation

The current directors and officers of Quantronix Corporation are the individuals included in the following table. From and after the Effective Date, the members of the board of directors of Quantronix Corporation shall be selected and determined in accordance with the provisions of the Confirmation Order, the constituent documents of Quantronix Corporation and applicable law. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of Quantronix Corporation shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of Quantronix Corporation. The mailing address of each director and executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Anthony J. Bellantuoni	Director, Assistant Secretary
Scott Benenati	Vice President
Carmela Dimaio	Treasurer/Controller

(9) Synrad, Inc.

The current directors and officers of Synrad, Inc. are the individuals included in the following table. From and after the Effective Date, the members of the board of directors of Synrad, Inc. shall be selected and determined in accordance with the provisions of the Confirmation Order, the constituent documents of Synrad, Inc. and applicable law. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of Synrad, Inc. shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of Synrad, Inc. The mailing address of each director and executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Anthony J. Bellantuoni	Director, Assistant Secretary
Richard B. Black	Director

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(10) MicroE Systems Corp.

The current directors and officers of MicroE Systems Corp. are the individuals included in the following table. From and after the Effective Date, the members of the board of directors of MicroE Systems Corp. shall be selected and determined in accordance with the provisions of the Confirmation Order, the constituent documents of MicroE Systems Corp. and applicable law. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of MicroE Systems Corp. shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of MicroE Systems Corp. The mailing address of each director and executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Anthony J. Bellantuoni	Director and Secretary

(11) MES International Inc.

The current directors and officers of MES International Inc. are the individuals included in the following table. From and after the Effective Date, the Consensual Board Member shall be the sole member of the initial board of directors of MES International Inc., as reorganized. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of MES International Inc. shall be selected and appointed by the board of directors in accordance with, and pursuant to, the provisions of applicable law and the constituent documents of MES International Inc. The mailing address of each director and executive officer is: c/o GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730.

Name	Office
Anthony J. Bellantuoni	Director, Vice President and Secretary

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5. Principal Owners of Voting Securities

The following tables set forth, as of the date hereof and as of the Effective Date of the Plan, certain information regarding each person known by the Applicants to beneficially own ten percent or more of the respective voting securities of the Applicants.

(a) The Company (as of date hereof):

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
GSI Group Inc. 125 Middlesex Turnpike Bedford, Massachusetts 01730	Common Shares, no par value	1,000,000 shares	100%

As of the Effective Date of the Plan and pursuant to the terms and conditions thereof, the Company, as reorganized (the “Reorganized Company”), shall issue an additional 2,939,650 shares of its common stock to GSI Group Inc., as reorganized (“Reorganized Holdings”). After such issuance Reorganized Holdings shall be the holder of a total of 3,939,650 shares of the common stock of the Reorganized Company.

(b) The Guarantors:

(1) GSI Group Inc.

As of December 3, 2009¹:

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
Stephen W. Bershad c/o Christopher J. Hewitt, Esq. Jones Day 901 Lakeside Avenue Cleveland, Ohio 44114	Common Shares, no par value	6,251,806 shares	13.1%

As of the Effective Date of the Plan and pursuant to the terms and conditions therein, Reorganized Holdings shall issue new common shares (“New Common Shares”) of Reorganized Holdings to its existing shareholders and to existing holders of the Senior Notes. In addition, as of the Effective Date of the Plan and pursuant to the terms and conditions therein, Reorganized Holdings shall issue New Common Shares to certain shareholders that elected to subscribe for additional New Common Shares in the rights offering contemplated under the Plan (the “Rights Offering”) and shall also issue New Common Shares to certain holders of Senior Notes that agreed to backstop the Rights Offering. The purchase price per New Common Share in the Rights Offering was $1.80. Except for certain limited exceptions for vested shares not yet issued, only record holders of common shares of GSI Group Inc. as of July 7, 2010, the expiration date of the Rights Offering, were eligible to participate in the Rights Offering.

(2) Excel Technology, Inc. (as of the date hereof and as of the Effective Date of the Plan):

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
GSI Group Corporation 125 Middlesex Turnpike Bedford, Massachusetts 01730	Common Stock, $.001 par value per share	1,000 shares	100%

(3) Cambridge Technology, Inc. (as of the date hereof and as of the Effective Date of the Plan):

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
Excel Technology, Inc. 125 Middlesex Turnpike Bedford, Massachusetts 01730	Common Stock, no par value	1 share	100%

(4) Continuum Electro-Optics, Inc. (as of the date hereof and as of the Effective Date of the Plan):

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
Excel Technology, Inc. 125 Middlesex Turnpike Bedford, Massachusetts 01730	Common Stock, $.001 par value per share	10 shares	100%

¹ Information obtained from Schedule 13D filed by Mr. Bershad with the SEC on December 3, 2009.

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(5) Control Laser Corporation (as of the date hereof and as of the Effective Date of the Plan):

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
Excel Technology, Inc. 125 Middlesex Turnpike Bedford, Massachusetts 01730	Common Stock, $.01 par value per share	1 share	100%

(6) The Optical Corporation (as of the date hereof and as of the Effective Date of the Plan):

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
Excel Technology, Inc. 125 Middlesex Turnpike Bedford, Massachusetts 01730	Common Stock, no par value	1 share	100%

(7) Photo Research, Inc. (as of the date hereof and as of the Effective Date of the Plan):

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
Excel Technology, Inc. 125 Middlesex Turnpike Bedford, Massachusetts 01730	Common Stock, no par value	1 share	100%

(8) Quantronix Corporation (as of the date hereof and as of the Effective Date of the Plan):

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
Excel Technology, Inc. 125 Middlesex Turnpike Bedford, Massachusetts 01730	Common Stock, $.01 par value per share	1 share	100%

(9) Synrad, Inc. (as of the date hereof and as of the Effective Date of the Plan):

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
Excel Technology, Inc. 125 Middlesex Turnpike Bedford, Massachusetts 01730	Common Stock, no par value	1 share	100%

(10) MicroE Systems Corp. (as of the date hereof and as of the Effective Date of the Plan):

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
GSI Group Corporation 125 Middlesex Turnpike Bedford, Massachusetts 01730	Common Stock, $.01 par value per share	100 shares	100%

(11) MES International Inc. (as of the date hereof and as of the Effective Date of the Plan):

Name and Complete Mailing Address	Title of Class Owned	Amount Owned	Percentage of Voting Securities Owned
MicroE Systems Corp. 125 Middlesex Turnpike Bedford, Massachusetts 01730	Common Stock, $.001 par value per share	10,000 shares	100%

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UNDERWRITERS

6. Underwriters

(a) The name and complete mailing address of each person who, within three years to the date of filing this application, acted as an underwriter of any securities of the Applicants which were outstanding on the date of filing the application is listed below, along with the title of each class of securities underwritten by the underwriter:

Name	Address
None

(b) There is no proposed principal underwriter for the Notes that are proposed to be offered in connection with the Indenture that is to be qualified under this application.

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CAPITAL SECURITIES

7. Capitalization

(a) The following tables set forth certain information with respect to each authorized class of securities of the Applicants to be outstanding as of the Effective Date of the Plan. Each of the Applicants (other than the Company) is a guarantor of the Notes.

(i) The Company:

Title of Class	Amount Authorized			Amount Outstanding
Common shares		6,000,000 shares			3,939,650 shares
12.25% Senior Secured PIK Election Notes due 2014	$	107,040,000	*	$	107,040,000

* Plus accrued and unpaid interest

(ii) The Guarantors:

Title of Class	Amount Authorized	Amount Outstanding
GSI Group Inc.
Common shares	Unlimited	N/A	**
Excel Technology, Inc.
Common stock	20,000,000 shares	1,000 shares
Preferred stock	2,000,000 shares	0 shares
Cambridge Technology, Inc.
Common stock	100,000 shares	1 share
Continuum Electro-Optics, Inc.
Common stock	1,500 shares	10 shares
Control Laser Corporation
Common stock	2,000,000 shares	1 share
The Optical Corporation
Common stock	1,000,000 shares	1 share
Photo Research, Inc.
Common stock	100 shares	1 share
Quantronix Corporation
Common stock	3,000,000 shares	1 share
Preferred stock	500,000 shares	0 shares
Synrad, Inc.
Common stock	200 shares	1 share
MicroE Systems Corp.
Common stock	100 shares	100 shares
MES International Inc.
Common stock	10,000 shares	10,000 shares

** See the description under Item 5(b)(1) herein.

(b) According to the Articles of Incorporation of the Company, as amended, the designations and the powers, preferences and rights, and the qualifications, limitations or restrictions of the Company’s common stock, no par value, are as provided under Michigan law. Each holder of common shares or common stock of each Guarantor is entitled to one vote for each such security held on all matters submitted to a vote of security holders.

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INDENTURE SECURITIES

8. Analysis of Indenture Provisions

The following analysis is not a complete description of the Indenture provisions discussed and is qualified in its entirety by reference to the terms of the Indenture, a form of which is attached as Exhibit T3C hereto and incorporated by reference herein. The Company has not entered into the Indenture as of the date of this filing, and the terms of the Indenture are subject to change prior to its execution. Capitalized terms used but not defined in Section 8 have the meanings assigned to them in the Indenture.

(a) Events of Default

Each of the following is an “Event of Default”:

(1) failure by the Issuer to pay interest (whether in cash or in the form of PIK Notes or an increase in the principal amount of Notes as a result of a PIK Payment or otherwise) on any of the Notes when it becomes due and payable and the continuance of any such failure for 30 days;

(2) failure by the Issuer to pay to Holders the principal on or any other amount (other than interest) in respect of any of the Notes when it becomes due and payable, whether at stated maturity, upon redemption, upon purchase, upon acceleration or otherwise, including pursuant to any offer to purchase in connection with an Asset Sale or Section 4.07 of the Indenture;

(3) failure by the Issuer to comply with Section 5.01 of the Indenture, or an offer to redeem or repurchase the Notes, if required, upon an Asset Sale or pursuant to Section 4.07 of the Indenture;

(4) failure by Parent or the Issuer to comply with any other agreement or covenant in the Indenture or Security Documents and continuance of such failure for 45 days (other than Section 4.02 of the Indenture, which shall be 60 days) after notice of the failure has been given to the Issuer by the Trustee, by the Holders of at least 25% of the aggregate principal amount of the Notes then outstanding or by the beneficial owners of at least 25% of the aggregate principal amount of the Notes then outstanding; provided, however, that notice from the beneficial owners pursuant to Section 6.01(4) of the Indenture shall be deemed proper only if, and as of such date, the Issuer has received such information and certifications (including from the Holder of the Note or any Agent Member) reasonably necessary to determine that the person(s) providing such notice are beneficial owners of such Notes (for purposes of Section 6.01(4) of the Indenture, the term “beneficial owner” has the meaning given such term in Rules 13d-3 and 13d-5 under the Exchange Act); or

(5) default under any mortgage, indenture or other instrument or agreement under which there may be issued or by which there may be secured or evidenced Indebtedness of the Parent or any Restricted Subsidiary, whether such Indebtedness now exists or is incurred after the Initial Issue Date, which default:

(a) is caused by a failure to pay at final maturity principal on such Indebtedness within the applicable express grace period and any extensions thereof, or

(b) that has resulted in the acceleration of such Indebtedness prior to its express final maturity, and

in each case, the principal amount of such Indebtedness, together with any other Indebtedness with respect to which an event described in clause (a) or (b) has occurred and is continuing, aggregates $10.0 million or more;

(6) one or more judgments or orders that exceed $10.0 million in the aggregate (net of amounts covered by insurance or bonded) for the payment of money have been entered by a court or courts of competent jurisdiction against the Parent or any Restricted Subsidiary and such judgment or judgments have not been satisfied, discharged, bonded (by providing insurance, letters of credit or other financial assurance), stayed or stayed pending appeal, annulled or rescinded within 60 days of being entered;

(7) the Issuer, the Parent or any Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

(a) commences a voluntary case,

(b) consents to the entry of an order for relief against it in an involuntary case,

(c) consents to the appointment of a Custodian of it or for all or substantially all of its assets, or

(d) makes a general assignment for the benefit of its creditors;

(8) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(a) is for relief against the Issuer, the Parent or any Significant Subsidiary as debtor in an involuntary case,

(b) appoints a Custodian of the Issuer, the Parent or any Significant Subsidiary or a Custodian for all or substantially all of the assets of the Parent or any Significant Subsidiary, or

(c) orders the liquidation of the Issuer, the Parent or any Significant Subsidiary,

and the order or decree remains unstayed and in effect for 60 days;

(9) any Note Guarantee of any Significant Subsidiary or the Parent ceases to be in full force and effect (other than in accordance with the terms of such Note Guarantee and the Indenture) or is declared null and void and unenforceable or found to be invalid or any Guarantor denies its liability under its Note Guarantee (other than by reason of release of a Guarantor from its Note Guarantee in accordance with the terms of the Indenture and the Note Guarantee); or

(10)

(a) the repudiation or disaffirmation by the Issuer or any Guarantor of its obligations under any of the Security Documents;

(b) the determination in a judicial proceeding that any of the Security Documents is unenforceable or invalid against the Issuer or any Guarantor for any reason with respect to any material portion of the Collateral; or

(c) any Security Document shall cease to be in full force and effect (other than in accordance with the terms of the applicable Security Document and the Indenture), or cease to be effective to grant the Collateral Agent a perfected Lien on the Collateral to the extent required thereby and with the priority purported to be created thereby, in each case under this clause (10)(c), with respect to any material portion of the Collateral.

If any Event of Default (other than of a type specified in clause (7) or (8) above) shall have occurred and be continuing, the Trustee, by written notice to the Issuer, or the Holders of at least 25% in the aggregate principal amount of the then outstanding Notes, by written notice to the Issuer and the Trustee, may declare all amounts owing under the Notes to be due and payable immediately.

Upon the effectiveness of such declaration, such principal and interest shall be due and payable immediately; provided, however, that after such acceleration, but before a judgment or decree based on such acceleration, the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind and annul such acceleration of the Notes if certain conditions set forth in Section 6.02 of the Indenture are met. In the case of an Event of Default arising under clause (7) or (8) above, all outstanding Notes will become due and payable immediately without further action or notice.

12

Subject to certain provisions of the Indenture, the Holders of a majority in aggregate principal amount of the then outstanding Notes may waive any existing Default or compliance with any provision of the Indenture or the Notes, other than (a) a Default or Event of Default in the payment of the principal of, or premium, if any, or interest or additional interest on, any Note, (b) a Default or Event of Default described in clause (7) or (8) above, or (c) any Default or Event of Default in respect of any provision of the Indenture or the Notes which, under Section 8.02 of the Indenture, cannot be modified or amended without the consent of the Holder of each outstanding Note affected.

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, or premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes, the Indenture or the Security Documents and may take any necessary action requested of it as Trustee to settle, compromise, adjust or otherwise conclude any proceedings to which it is a party.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. Any costs associated with actions taken by the Trustee under Section 6.03 of the Indenture shall be reimbursed to the Trustee by the Issuer.

The Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee by the Indenture or any Security Document. However, the Trustee may refuse to follow any direction that conflicts with law or the Indenture or any Security Document or that the Trustee determines may be unduly prejudicial to the rights of another Holder not taking part in such direction, and the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, determines that the action so directed may not lawfully be taken or if the Trustee in good faith shall, by a Responsible Officer, determine that the proceedings so directed may result in costs and expenses of the Trustee for which it has no source of payment or recovery or involve it in personal liability; provided that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

Under the Indenture, the Trustee will, within 30 days after the occurrence of any Default with respect to the Notes, give the Holders notice of all uncured Defaults thereunder known to it; provided, however, that, except in the case of an Event of Default in payment with respect to the Notes or a Default in complying with Section 5.01 of the Indenture, the Trustee shall be protected in withholding such notice if and so long as a committee of its responsible officers in good faith determines that the withholding of such notice is in the interests of the Holders.

(b) Authentication and Delivery of Notes; Use of Proceeds

Two Officers shall sign, or one Officer shall sign and one Officer (each of whom shall, in each case, have been duly authorized by all requisite corporate actions) shall attest to, the Notes for the Issuer by manual or facsimile signature.

No Note shall be entitled to any benefit under the Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for in the Indenture executed by the Trustee by manual signature of an authorized officer, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered under the Indenture. Notwithstanding the foregoing, if any Note shall have been authenticated and delivered under the Indenture but never issued and sold by the Issuer, and the Issuer shall deliver such Note to the Trustee for cancellation as provided in Section 2.12 of the Indenture, for all purposes of the Indenture such Note shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of the Indenture.

The Notes will be issued to holders of Allowed Class 5 Note Claims pursuant to the Plan. As a result, the Company will not realize any proceeds from such issuance.

(c) Release of Liens on Collateral

The Issuer’s obligations under the Indenture and the Notes, and each of the Guarantor’s obligations under the Indenture, will be secured by a first priority perfected security interest on all of the property and assets of each Grantor (as defined in the Security Agreement), subject to certain exclusions expressly set forth in the Security Agreement and Indenture.

Collateral may be released from the Lien and security interest created by the Security Documents at any time or from time to time in connection with a sale of Collateral in accordance with the terms of Section 4.09 of the Indenture (i) upon the request of the Parent or the Issuer pursuant to an Officers’ Certificate certifying that all terms for release and conditions precedent under the Indenture and under the applicable Security Document have been met and specifying (A) the identity of the Collateral to be released and (B) the provision of the Indenture that authorizes such release or (ii) on the terms set forth in the Security Documents and pursuant to or in connection with a transaction permitted under the Indenture. To the extent any action on the part of the Trustee is required to effectuate any release of any Lien on any Collateral, the Trustee will release, and will give any necessary consent, waiver or instruction to the Collateral Agent, to release (at the sole cost and expense of the Issuer) (i) all Collateral that is contributed, sold, leased conveyed, transferred or otherwise disposed of, provided such contribution, sale, lease conveyance, transfer or other disposition is or will be in accordance with the provisions of the Indenture, including without limitation, Section 4.09 of the Indenture and that no Default or Event of Default has occurred and is continuing or would occur immediately following such release; (ii) Collateral which may be released with the consent of Holders pursuant to Article 8 of the Indenture, (iii) all Collateral (except as provided in Article 9 of the Indenture) upon discharge or defeasance of the Indenture in accordance with Article 9 of the Indenture; (iv) all Collateral upon the payment in full of all obligations of the Issuer with respect to principal or interest on the Notes and any and all Obligations outstanding, due and payable under the Indenture at the time the Notes are prepaid in full; and (v) Collateral of a Guarantor whose Guarantee is released pursuant to Section 10.04 of the Indenture. Upon receipt of such Officers’ Certificate, an Opinion of Counsel and any other opinions or certificates required by the Indenture and the TIA, the Trustee will execute, deliver or acknowledge any necessary or proper instruments of termination, satisfaction or release to evidence the release of any Collateral permitted or required to be released pursuant to the Indenture and the Security Documents.

The Trustee may release Collateral from the Lien and security interest created by the Indenture and the Security Documents upon the sale or disposition of Collateral in accordance with the provisions of the Indenture, including without limitation, Section 4.09 of the Indenture or the subjecting of any Collateral to the Lien securing Indebtedness pursuant to the Trustee’s powers, rights and duties with respect to remedies provided under any of the Security Documents.

The release of any Collateral from the terms of the Indenture and the Security Documents will not be deemed to impair the security under the Indenture in contravention of the provisions thereof if and to the extent the Collateral is released pursuant to the terms thereof. To the extent applicable, the Parent or the Issuer will cause TIA Section 313(b), relating to reports, and TIA Section 314(d), relating to the release of property or securities from the Lien and security interest of the Security Documents and relating to the substitution therefor of any property or securities to be subjected to the Lien and security interest of the Security Documents, to be complied with. Any certificate or opinion required by TIA Section 314(d) may be made by an Officer except in cases where TIA Section 314(d) requires that such certificate or opinion be made by an independent Person, which Person will be an engineer, appraiser or other expert selected or approved by the Trustee in the exercise of reasonable care.

13

No collateral will be released from the Lien and security interest created by the Security Documents pursuant to the provisions of the Security Documents unless there shall have been delivered to the Trustee the certificates required by the Section 10.08 of the Indenture.

(d) Satisfaction and Discharge of the Indenture and Security Documents

The Issuer may terminate its obligations and the obligations of the Issuer and the Guarantors under the Notes, the Security Documents, the Note Guarantees and the Indenture, except the obligations referred to in the last paragraph of this subsection (d) below, if the Parent or the Issuer has paid or caused to be paid all sums payable by it under this Indenture, and

(1) all the Notes that have been authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has been deposited in trust or segregated and held in trust by the Parent or the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee for cancellation, or

(2) (a) all Notes not delivered to the Trustee for cancellation otherwise (i) have become due and payable, (ii) will become due and payable at the maturity date, within one year or (iii) have been or are to be called for redemption within one year pursuant to paragraph 7 of the Notes, and, in the case of (i), or (ii), or (iii), the Parent or the Issuer has irrevocably deposited or caused to be deposited with the Trustee as trust funds, in trust solely for the benefit of the Holders, U.S. legal tender, U.S. Government Obligations or a combination thereof, in such amounts as will be sufficient (without consideration of any reinvestment of interest) to pay and discharge the entire Indebtedness (including all principal and accrued interest) on the Notes not theretofore delivered to the Trustee for cancellation, or (b) the Parent or the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or on the date of redemption, as the case may be.

In addition, if required by the Trustee, the Parent or the Issuer must deliver an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent to the satisfaction and discharge of this Indenture have been complied with.

After such delivery, the Trustee shall acknowledge in writing the discharge of the Issuer’s, and the Guarantors’ obligations under the Notes, the Note Guarantees and this Indenture except for those surviving obligations specified below.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Issuer in Sections 7.07, 9.07 and 9.08 of the Indenture will survive such satisfaction and discharge.

(e) Evidence Required to be Furnished by the Issuer to the Trustee as to Compliance with the Conditions and Covenants Provided for in the Indenture

The Issuer or the Parent are required to deliver to the Trustee, within 90 days after the end of each fiscal year ended December 31st, an Officers’ Certificate stating that a review of the activities of the Parent and its Subsidiaries during such fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Issuer and the Guarantors have kept, observed, performed and fulfilled their obligations under the Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge, the Issuer and the Guarantors have kept, observed, performed and fulfilled each and every covenant contained in the Indenture and are not in default in the performance or observance of any of the terms, provisions and conditions thereof (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action they are taking or propose to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Issuer and the Guarantors are taking or propose to take with respect thereto. So long as any of the Notes are outstanding, the Issuer is required to deliver to the Trustee, forthwith upon any Officer becoming aware of any Default, an Officers’ Certificate specifying such Default and what action the Issuer and the Guarantors are taking or propose to take with respect thereto.

9. Other Obligors

Other than each of the Applicants, no other person is an obligor with respect to the Notes.

Contents of application for qualification. This application for qualification comprises:

(a) Pages numbered 1 to 17, consecutively (including an attached Exhibit Index).

(b) The statement of eligibility and qualification on Form T-1 of The Bank of New York Mellon Trust Company, N.A., the Trustee under the Indenture to be qualified.

(c) The following Exhibits in addition to those filed as part of the Form T-1 statement of eligibility and qualification of the Trustee:

Exhibit T3A.1*	Articles of Incorporation of GSI Group Corporation, in effect as of the date hereof.
Exhibit T3A.2	Certificate and Articles of Continuance of GSI Group Inc., in effect as of the date hereof, incorporated by reference to the Registration Statement on Form S-4/A (Amendment No. 2) of Lumonics Inc., filed February 11, 1999.
Exhibit T3A.3*	Restated Certificate of Incorporation of Excel Technology, Inc., in effect as of the date hereof.
Exhibit T3A.4*	Articles of Incorporation of Cambridge Technology, Inc., in effect as of the date hereof.
Exhibit T3A.5*	Certificate of Incorporation of Continuum Electro-Optics, Inc., in effect as of the date hereof.
Exhibit T3A.6*	Articles of Incorporation of Control Laser Corporation, in effect as of the date hereof.
Exhibit T3A.7*	Articles of Incorporation of The Optical Corporation, in effect as of the date hereof.
Exhibit T3A.8*	Certificate of Incorporation of Photo Research, Inc., in effect as of the date hereof.
Exhibit T3A.9*	Restated Certificate of Incorporation of Quantronix Corporation, in effect as of the date hereof.
Exhibit T3A.10*	Articles of Incorporation of Synrad, Inc., in effect as of the date hereof.

14

Exhibit T3A.11*	Certificate of Incorporation of MicroE Systems Corp., in effect as of the date hereof.
Exhibit T3A.12*	Certificate of Incorporation of MES International Inc., in effect as of the date hereof.
Exhibit T3B.1*	Bylaws of GSI Group Corporation, in effect as of the date hereof.
Exhibit T3B.2	By-Law No. 1 of GSI Group Inc., incorporated by reference to the Registration Statement on Form S-4/A (Amendment No. 2) of Lumonics Inc., filed February 11, 1999.
Exhibit T3B.3*	By-laws of Excel Technology, Inc., in effect as of the date hereof
Exhibit T3B.4*	By-laws of Cambridge Technology, Inc., in effect as of the date hereof.
Exhibit T3B.5*	By-laws of Continuum Electro-Optics, Inc., in effect as of the date hereof.
Exhibit T3B.6*	By-laws of Control Laser Corporation, in effect as of the date hereof.
Exhibit T3B.7*	By-laws of The Optical Corporation, in effect as of the date hereof.
Exhibit T3B.8*	By-laws of Photo Research, Inc., in effect as of the date hereof.
Exhibit T3B.9*	By-laws of Quantronix Corporation, in effect as of the date hereof.
Exhibit T3B.10*	By-laws of Synrad, Inc., in effect as of the date hereof.
Exhibit T3B.11*	Amended and Restated By-laws of MicroE Systems Corp., in effect as of the date hereof.
Exhibit T3B.12*	By-laws of MES International Inc., in effect as of the date hereof.
Exhibit T3C**	Form of Indenture among GSI Group Corporation, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A.
Exhibit T3D	Not applicable.
Exhibit T3E-1**	Disclosure Statement.
Exhibit T3E-2**	Ballots.
Exhibit T3E-3	Final Fourth Modified Joint Chapter 11 Plan of Reorganization for MES International Inc., GSI Group Inc. and GSI Group Corporation, incorporated by reference to Exhibit 99.2 of GSI Group Inc.’s Current Report on Form 8-K, filed May 28, 2010.
Exhibit T3F**	Cross-reference sheet showing the location in the Indenture of the provisions inserted therein pursuant to Sections 310 through 318(a), inclusive of the Trust Indenture Act of 1939 (included as part of Exhibit T3C herewith).
Exhibit 25.1**	Statement of eligibility and qualification on Form T-1 of The Bank of New York Mellon Trust Company, N.A., as trustee under the Indenture to be qualified.

* Previously filed with the Company’s Application for Qualification of Indentures on Form T-3 (File No. 022-28929) filed by the Company on January 14, 2010.

** Filed herewith.

15

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, each of the applicants listed below has duly caused this application to be signed on its behalf by the undersigned, thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the City of Bedford and Commonwealth of Massachusetts, on the 16th day of July 2010.

GSI GROUP CORPORATION
GSI GROUP INC.
MES INTERNATIONAL INC.
By:	/S/    MICHAEL KATZENSTEIN
Name:	Michael Katzenstein
Title:	In his capacity as Chief Restructuring Officer of the above-named companies
EXCEL TECHNOLOGY, INC.
CAMBRIDGE TECHNOLOGY, INC.
CONTINUUM ELECTRO-OPTICS, INC.
CONTROL LASER CORPORATION
THE OPTICAL CORPORATION
PHOTO RESEARCH, INC.
QUANTRONIX CORPORATION
SYNRAD, INC.
MICROE SYSTEMS CORP.
By:	/S/    ANTHONY BELLANTUONI
Name:	Anthony Bellantuoni
Title:	In his capacity as Secretary or Assistant Secretary of the above-named companies

ATTEST:	/S/    CHRISTOPHER LAUKAMG
Name:	Christopher Laukamg
Title:	Witness

16

EXHIBIT INDEX

Exhibit T3A.1*	Articles of Incorporation of GSI Group Corporation, in effect as of the date hereof.
Exhibit T3A.2	Certificate and Articles of Continuance of GSI Group Inc., in effect as of the date hereof, incorporated by reference to the Registration Statement on Form S-4/A (Amendment No. 2) of Lumonics Inc., filed February 11, 1999.
Exhibit T3A.3*	Restated Certificate of Incorporation of Excel Technology, Inc., in effect as of the date hereof.
Exhibit T3A.4*	Articles of Incorporation of Cambridge Technology, Inc., in effect as of the date hereof.
Exhibit T3A.5*	Certificate of Incorporation of Continuum Electro-Optics, Inc., in effect as of the date hereof.
Exhibit T3A.6*	Articles of Incorporation of Control Laser Corporation, in effect as of the date hereof.
Exhibit T3A.7*	Articles of Incorporation of The Optical Corporation, in effect as of the date hereof.
Exhibit T3A.8*	Certificate of Incorporation of Photo Research, Inc., in effect as of the date hereof.
Exhibit T3A.9*	Restated Certificate of Incorporation of Quantronix Corporation, in effect as of the date hereof.
Exhibit T3A.10*	Articles of Incorporation of Synrad, Inc., in effect as of the date hereof.
Exhibit T3A.11*	Certificate of Incorporation of MicroE Systems Corp., in effect as of the date hereof.
Exhibit T3A.12*	Certificate of Incorporation of MES International Inc., in effect as of the date hereof.
Exhibit T3B.1*	Bylaws of GSI Group Corporation, in effect as of the date hereof.
Exhibit T3B.2	By-Law No. 1 of GSI Group Inc., incorporated by reference to the Registration Statement on Form S-4/A (Amendment No. 2) of Lumonics Inc., filed February 11, 1999.
Exhibit T3B.3*	By-laws of Excel Technology, Inc., in effect as of the date hereof
Exhibit T3B.4*	By-laws of Cambridge Technology, Inc., in effect as of the date hereof.
Exhibit T3B.5*	By-laws of Continuum Electro-Optics, Inc., in effect as of the date hereof.
Exhibit T3B.6*	By-laws of Control Laser Corporation, in effect as of the date hereof.
Exhibit T3B.7*	By-laws of The Optical Corporation, in effect as of the date hereof.
Exhibit T3B.8*	By-laws of Photo Research, Inc., in effect as of the date hereof.
Exhibit T3B.9*	By-laws of Quantronix Corporation, in effect as of the date hereof.
Exhibit T3B.10*	By-laws of Synrad, Inc., in effect as of the date hereof.
Exhibit T3B.11*	Amended and Restated By-laws of MicroE Systems Corp., in effect as of the date hereof.
Exhibit T3B.12*	By-laws of MES International Inc., in effect as of the date hereof.
Exhibit T3C**	Form of Indenture among GSI Group Corporation, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A.
Exhibit T3D	Not applicable.
Exhibit T3E-1**	Disclosure Statement.
Exhibit T3E-2**	Ballots.
Exhibit T3E-3	Final Fourth Modified Joint Chapter 11 Plan of Reorganization for MES International Inc., GSI Group Inc. and GSI Group Corporation, incorporated by reference to Exhibit 99.2 of GSI Group Inc.’s Current Report on Form 8-K, filed May 28, 2010.
Exhibit T3F**	Cross-reference sheet showing the location in the Indenture of the provisions inserted therein pursuant to Sections 310 through 318(a), inclusive of the Trust Indenture Act of 1939 (included as part of Exhibit T3C herewith).
Exhibit 25.1**	Statement of eligibility and qualification on Form T-1 of The Bank of New York Mellon Trust Company, N.A., as trustee under the Indenture to be qualified.

* Previously filed with the Company’s Application for Qualification of Indentures on Form T-3 (File No. 022-28929) filed by the Company on January 14, 2010.

** Filed herewith.

17

EX-99.T3C

Exhibit T3C

GSI GROUP CORPORATION

THE GUARANTORS

named herein

and

The Bank of New York Mellon Trust Company, N.A., as Trustee

INDENTURE

Dated as of July     , 2010

12.25% Senior Secured PIK Election Notes due 2014

CROSS-REFERENCE TABLE

TIA Section	Indenture Section
310(a)(1)	7.10
(a)(2)	N.A.
(a)(3)	N.A.
(a)(4)	N.A.
(a)(5)	N.A.
(b)	7.10
(b)(1)	7.10
(c)	N.A.
311(a)	7.11
(b)	7.11
(c)	N.A.
312(a)	N.A.
(b)	11.03
(c)	11.03
313(a)	7.06
(b)	10.08
(b)(1)	N.A.
(b)(2)	7.06
(c)	7.06
(d)	7.06
314(a)	N.A.
(b)	10.07
(c)(1)	N.A.
(c)(2)	N.A.
(c)(3)	N.A.
(d)	10.08; 10.10
(e)	N.A.

(f)	N.A.
315(a)	7.01(b)
(b)	N.A.
(c)	N.A.
(d)	N.A.
(e)	N.A.
316(a) (last sentence)	N.A.
(a)(1)(A)	6.05
(a)(1)(B)	6.04.
(a)(2)	N.A.
(b)	N.A.
(c)	N.A.
317(a)(1)	N.A.
(a)(2)	N.A.
(b)	N.A.
318(a)	N.A.

N.A. means Not Applicable

Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture

2

TABLE OF CONTENTS

ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE		2
SECTION 1.01.	Definitions.	2
SECTION 1.02.	Other Definitions.	21
SECTION 1.03.	Incorporation by Reference of Trust Indenture Act.	22
SECTION 1.04.	Rules of Construction.	22
ARTICLE TWO THE NOTES		23
SECTION 2.01.	Amount of Notes.	23
SECTION 2.02.	Form and Dating.	23
SECTION 2.03.	Execution and Authentication.	23
SECTION 2.04.	Registrar and Paying Agent.	24
SECTION 2.05.	Paying Agent To Hold Money in Trust.	25
SECTION 2.06.	Holder Lists.	25
SECTION 2.07.	Transfer and Exchange.	25
SECTION 2.08.	Replacement Notes.	26
SECTION 2.09.	Outstanding Notes.	26
SECTION 2.10.	Treasury Notes.	26
SECTION 2.11.	Temporary Notes.	26
SECTION 2.12.	Cancellation.	27
SECTION 2.13.	Defaulted Interest.	27
SECTION 2.14.	CUSIP Number.	27
SECTION 2.15.	Deposit of Moneys.	27
SECTION 2.16.	Book-Entry Provisions for Global Notes.	27
SECTION 2.17.	Computation of Interest.	29
SECTION 2.18.	Conditions Precedent.	29
ARTICLE THREE REDEMPTION		29
SECTION 3.01.	Election To Redeem; Notices to Trustee.	29
SECTION 3.02.	Selection by Trustee of Notes To Be Redeemed.	30
SECTION 3.03.	Notice of Redemption.	30
SECTION 3.04.	Effect of Notice of Redemption.	30
SECTION 3.05.	Deposit of Redemption Price.	31
SECTION 3.06.	Notes Redeemed in Part.	31
ARTICLE FOUR COVENANTS		31
SECTION 4.01.	Payment of Notes.	31
SECTION 4.02.	Reports.	32
SECTION 4.03.	Waiver of Stay, Extension or Usury Laws.	32
SECTION 4.04.	Compliance Certificate; Notice of Default.	32
SECTION 4.05.	Taxes.	33
SECTION 4.06.	Limitations on Additional Indebtedness.	33
SECTION 4.07.	Excess Working Capital Proceeds Purchase Offer.	34
SECTION 4.08.	Limitations on Restricted Payments.	35
SECTION 4.09.	Limitations on Asset Sales.	36
SECTION 4.10.	Limitations on Transactions with Affiliates.	37
SECTION 4.11.	Limitations on Liens.	39
SECTION 4.12.	Conduct of Business.	39
SECTION 4.13.	Additional Note Guarantees.	39

i

SECTION 4.14.	Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries.	39
SECTION 4.15.	Limitations on Designation of Unrestricted Subsidiaries.	40
SECTION 4.16.	Limitations on Sale and Leaseback Transactions.	41
SECTION 4.17.	Maintenance of Properties; Compliance with Law.	41
SECTION 4.18.	Legal Existence.	42
SECTION 4.19.	After-Acquired Property.	42
SECTION 4.20.	Further Instruments and Acts.	42
SECTION 4.21.	Impairment of Security Interest.	42
SECTION 4.22.	Future Pledges of Collateral to Secure PIK Interest.	42
SECTION 4.23.	Massachusetts Securities Corporation.	43
ARTICLE FIVE SUCCESSOR CORPORATION		43
SECTION 5.01.	Limitations on Mergers, Amalgamations, Consolidations, Etc.	43
SECTION 5.02.	Successor Person Substituted.	44
ARTICLE SIX DEFAULTS AND REMEDIES		45
SECTION 6.01.	Events of Default.	45
SECTION 6.02.	Acceleration and Default Rate.	46
SECTION 6.03.	Other Remedies.	47
SECTION 6.04.	Waiver of Past Defaults and Events of Default.	47
SECTION 6.05.	Reporting Default.	47
SECTION 6.06.	Control by Majority.	48
SECTION 6.07.	Limitation on Suits.	48
SECTION 6.08.	No Personal Liability of Directors, Officers, Employees and Stockholders.	48
SECTION 6.09.	Rights of Holders To Receive Payment.	48
SECTION 6.10.	Collection Suit by Trustee.	48
SECTION 6.11.	Trustee May File Proofs of Claim.	49
SECTION 6.12.	Priorities.	49
SECTION 6.13.	Undertaking for Costs.	49
SECTION 6.14.	Restoration of Rights and Remedies.	49
ARTICLE SEVEN TRUSTEE		50
SECTION 7.01.	Duties of Trustee.	50
SECTION 7.02.	Rights of Trustee.	51
SECTION 7.03.	Individual Rights of Trustee.	52
SECTION 7.04.	Trustee’s Disclaimer.	52
SECTION 7.05.	Notice of Defaults.	52
SECTION 7.06.	Reports by Trustee to Holders.	52
SECTION 7.07.	Compensation and Indemnity.	53
SECTION 7.08.	Replacement of Trustee.	53
SECTION 7.09.	Successor Trustee by Consolidation, Merger, Etc.	54
SECTION 7.10.	Eligibility; Disqualification.	54
SECTION 7.11.	Preferential Collection of Claims Against Issuer.	54
SECTION 7.12.	Paying Agents.	54
ARTICLE EIGHT AMENDMENTS, SUPPLEMENTS AND WAIVERS		55
SECTION 8.01.	Without Consent of Holders.	55
SECTION 8.02.	With Consent of Holders.	55

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SECTION 8.03.	Compliance with Trust Indenture Act.	56
SECTION 8.04.	Revocation and Effect of Consents.	56
SECTION 8.05.	Notation on or Exchange of Notes.	57
SECTION 8.06.	Trustee To Sign Amendments, Etc.	57
ARTICLE NINE DISCHARGE OF INDENTURE; DEFEASANCE		57
SECTION 9.01.	Discharge of Indenture.	57
SECTION 9.02.	Legal Defeasance.	58
SECTION 9.03.	Covenant Defeasance.	58
SECTION 9.04.	Conditions to Legal Defeasance or Covenant Defeasance.	59
SECTION 9.05.	Deposited Money and U.S. Government Obligations To Be Held in Trust; Other Miscellaneous Provisions.	60
SECTION 9.06.	Reinstatement.	60
SECTION 9.07.	Moneys Held by Paying Agent.	60
SECTION 9.08.	Moneys Held by Trustee.	60
ARTICLE TEN GUARANTEE OF NOTES AND SECURITY DOCUMENTS		61
SECTION 10.01.	Guarantee.	61
SECTION 10.02.	Execution and Delivery of Guarantee.	62
SECTION 10.03.	Limitation of Guarantee.	62
SECTION 10.04.	Release of Guarantor.	62
SECTION 10.05.	Waiver of Subrogation.	63
SECTION 10.06.	Collateral and Security Documents.	63
SECTION 10.07.	Recordings and Opinions.	64
SECTION 10.08.	Release of Collateral.	65
SECTION 10.09.	Permitted Releases Not to Impair Lien.	65
SECTION 10.10.	Certificates of the Trustee.	66
SECTION 10.11.	Suits to Protect the Collateral.	66
SECTION 10.12.	Authorization of Receipt of Funds by the Trustee Under the Security Documents.	66
SECTION 10.13.	Purchaser Protected.	66
SECTION 10.14.	Powers Exercisable by Receiver or Trustee.	66
SECTION 10.15.	Trustee and Collateral Agent.	67
SECTION 10.16.	Interest Act (Canada) Compliance.	67
SECTION 10.17.	Judgment Currency.	67
ARTICLE ELEVEN MISCELLANEOUS		68
SECTION 11.01.	Trust Indenture Act Controls.	68
SECTION 11.02.	Notices.	68
SECTION 11.03.	Communications by Holders with Other Holders.	69
SECTION 11.04.	Certificate and Opinion as to Conditions Precedent.	69
SECTION 11.05.	Statements Required in Certificate and Opinion.	70
SECTION 11.06.	Rules by Trustee and Agents.	70
SECTION 11.07.	Business Days; Legal Holidays.	70
SECTION 11.08.	Governing Law and Submission to Jurisdiction.	70
SECTION 11.09.	No Adverse Interpretation of Other Agreements.	70
SECTION 11.10.	No Recourse Against Others.	71
SECTION 11.11.	Successors.	71
SECTION 11.12.	Multiple Counterparts.	71

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SECTION 11.13.	Table of Contents, Headings, Etc.	71
SECTION 11.14.	Separability.	71
SECTION 11.15.	Acts of Holders. Record Dates.	71
SECTION 11.16.	Failure or Indulgence Not Waiver.	72
SECTION 11.17.	Waiver of Jury Trial.	72
EXHIBIT A	FORM OF NOTE	A-1
EXHIBIT B	FORM OF LEGEND FOR GLOBAL NOTE	B-1
EXHIBIT C	NOTATION OF GUARANTEE	C-1
EXHIBIT D	SECURITY DOCUMENTS	D-1

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INDENTURE, dated as of July     , 2010, among GSI Group Corporation, a Michigan corporation, as issuer (the “Issuer”), GSI Group Inc., a company continued and existing under the laws of the Province of New Brunswick, Canada and the owner of all outstanding shares of voting capital stock of the Issuer (the “Parent”), Cambridge Technology, Inc., a Massachusetts corporation (“Cambridge”), Continuum Electro-Optics, Inc., a Delaware corporation (“Continuum”), Control Laser Corporation (d/b/a Baublys Control Laser), a Florida corporation (“Control”), Excel Technology, Inc., a Delaware corporation (“Excel Technology”), MES International Inc., a Delaware corporation (“MES”), MicroE Systems Corp., a Delaware corporation (“MicroE”), The Optical Corporation, a California corporation (“Optical”), Photo Research, Inc., a Delaware corporation (“Photo”), Quantronix Corporation, a Delaware corporation (“Quantronix”), and Synrad, Inc., a Washington corporation (“Synrad” and together with the Parent, Cambridge, Continuum, Control, Excel Technology, MES, MicroE, Optical, Photo, and Quantronix, each, a Guarantor (as hereinafter defined)), and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”).

WHEREAS, on November 20, 2009 (the “ Petition Date”), the Parent, and certain of its U.S. Subsidiaries (collectively, the “U.S. Debtors”) filed voluntary petitions under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Law”) with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) and continued in the possession of their assets and in the management of their businesses pursuant to Sections 1107 and 1108 of the Bankruptcy Law;

WHEREAS, on November 20, 2009, the Parent and the U.S. Debtors (collectively, the “Debtors”), filed the Reorganization Plan (as defined herein);

WHEREAS, on May 27, 2010, the Bankruptcy Court entered the Confirmation Order (as defined herein);

WHEREAS, the Confirmation Order is a Final Order (as defined in the Reorganization Plan);

WHEREAS, in connection with the confirmation and implementation of the Reorganization Plan, each in partial satisfaction of the Senior Note Claims and the GSI UK Note Claim (as each is defined in the Reorganization Plan), the Issuer is issuing the Notes (as defined herein) to holders of the Senior Note Claims and the holder of the GSI UK Note Claim;

WHEREAS, the Issuer and each Guarantor has duly authorized the execution and delivery of this Indenture to provide for the issuance of the Notes (as hereinafter defined) to be issued as this Indenture provides;

WHEREAS, the Guarantors have duly authorized the full and unconditional guarantee of the Notes, and to provide the general terms and conditions of the Notes and the guarantee of same, the Guarantors have duly authorized the execution and delivery of this Indenture; and

WHEREAS, each of the Issuer and the Guarantors jointly and severally represents that all acts and things necessary to make the Notes, when executed by the Issuer and authenticated and delivered by the Trustee as in this Indenture provided, and issued, the valid, binding and legal obligation of the Issuer, will, at the time of such execution, authentication and delivery, have been done and performed and the execution and delivery by the Issuer and each Guarantor of this Indenture and the issue hereunder of the Notes have in all respects been duly authorized; and the Issuer and each Guarantor, in the exercise of legal right and power in it vested, is executing and delivering this Indenture and proposes to make, execute, issue, and deliver the Notes.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders.

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ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions.

“Acquired Indebtedness” means (1) with respect to any Person that becomes a Restricted Subsidiary after the Initial Issue Date, Indebtedness of such Person and its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary that was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary and (2) with respect to the Parent or any Restricted Subsidiary, any Indebtedness of a Person (other than the Parent or a Restricted Subsidiary) existing at the time such Person is merged with or into the Parent or a Restricted Subsidiary, or Indebtedness expressly assumed by the Parent or any Restricted Subsidiary in connection with the acquisition of an asset or assets from another Person, which Indebtedness was not, in any case, incurred by such other Person in connection with, or in contemplation of, such merger or acquisition; provided, however, that Indebtedness of such acquired Person which is redeemed or otherwise repaid at the time of or substantially contemporaneously with the consummation of the transactions by which such acquired Person merges with or into or becomes a Restricted Subsidiary of such specified Person shall not be Acquired Indebtedness.

“Adjusted Net Assets” of the Issuer or of a Guarantor at any date shall mean the lesser of the amount by which (x) the fair value of the property of the Issuer or such Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities), but excluding liabilities under the Guarantee, of the Issuer or such Guarantor at such date and (y) the present fair salable value of the assets of the Issuer or such Guarantor at such date exceeds the amount that will be required to pay the probable liability of the Issuer or such Guarantor on its debts and all other fixed and contingent liabilities (after giving effect to all other fixed and contingent liabilities and after giving effect to any collection from any Subsidiary of the Issuer or such Guarantor in respect of the obligations of such Guarantor under the Guarantee), excluding Indebtedness in respect of the Guarantee, as they become absolute and matured.

“Affiliate” of any Person means any other Person which directly or indirectly controls or is controlled by, or is under direct or indirect common control with, the referent Person. For purposes of Section 4.10, Affiliates shall be deemed to include, with respect to any Person, any other Person (1) which beneficially owns or holds, directly or indirectly, 10% or more of any class of the Voting Stock of the referenced Person, (2) of which 10% or more of the Voting Stock is beneficially owned or held, directly or indirectly, by the referenced Person or (3) with respect to an individual, any immediate family member of such Person. For purposes of this definition, “control” of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

“Agent” means any Registrar, Paying Agent, Collateral Agent or agent for service or notices and demands.

“Amend” means to amend, supplement, restate, amend and restate or otherwise modify, including successively, and “amendment” shall have a correlative meaning.

“Ancillary Indenture Documents” shall have the meaning set forth in the Reorganization Plan.

“Annual Report” means an annual report on Form 10-K filed with the SEC under the Exchange Act.

“Asset” means any asset or property.

“Asset Sale” means any sale, issuance, conveyance, transfer, lease, assignment or other disposition by the Parent or any Restricted Subsidiary to any Person other than the Issuer or any Guarantor (including by means of a Sale and Leaseback Transaction or a merger or consolidation) (collectively, for purposes of this definition, a “transfer”), in one transaction or a series of related transactions, of any assets of the Parent or any

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of the Restricted Subsidiaries, that (i) have a Fair Market Value in excess of $1,000,000, or (ii) for aggregate consideration in excess of $1,000,000, other than in the ordinary course of business. For purposes of this definition, the term “Asset Sale” shall not include:

(1) transfers of cash or Cash Equivalents;

(2) transfers of assets (including Equity Interests) that are governed by and made in accordance with Section 5.01;

(3) Permitted Investments (other than Auction Rate Securities) and Restricted Payments permitted under Section 4.08;

(4) the creation of any Permitted Lien (but not the sale or other disposition of the property subject to such Permitted Lien);

(5) transfers of damaged, worn-out or obsolete equipment or assets that, in the Parent’s or the Issuer’s reasonable judgment, are no longer used or useful in the business of the Parent or the Restricted Subsidiaries;

(6) sales or grants of licenses or sublicenses, in either case on a non-exclusive basis, to use the patents, trade secrets, know-how and other intellectual property, and licenses, leases or subleases of other assets, of the Parent or any Restricted Subsidiary to the extent not materially interfering with the business of Parent and the Restricted Subsidiaries;

(7) the surrender or waiver of contract rights or the settlement, release or surrender of contract or tort claims to the extent not materially interfering with the business of the Parent and the Restricted Subsidiaries;

(9) transfers by the Parent or a Restricted Subsidiary expressly contemplated by the Reorganization Plan; and

(10) transfers of assets by any Restricted Subsidiary that is not the Issuer or a Guarantor to another Restricted Subsidiary that is not the Issuer or a Guarantor.

“Attributable Indebtedness,” when used with respect to any Sale and Leaseback Transaction, means, as at the time of determination, the present value (discounted at the interest rate borne by the Notes, compounded semiannually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended); provided, however, that if such Sale and Leaseback Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capitalized Lease Obligation”.

“Auction Rate Securities” means securities issued by State or local governments of the United States or political subdivisions thereof, the applicable interest rate on which is under normal circumstances subject to adjustments based on periodic remarketing or other auction process (commonly referred to as auction rate securities).

“Average Cash” means the average cash and Cash Equivalents of the Issuer and the Guarantors, on a consolidated basis, for the full fiscal quarter immediately preceding the fiscal quarter in which a Foreign Subsidiary Investment will be made; provided that no portion of such average cash shall be proceeds of debt for borrowed money excluding intercompany Indebtedness , but including, without limitation, proceeds of advances made pursuant to the Working Capital Facility.

“Bankruptcy Law” means Title 11 of the United States Code, as amended, or any similar federal or state law for the relief of debtors.

“Board of Directors” means, with respect to any Person, (i) in the case of any corporation, the Board of Directors of such Person (or any duly authorized committee thereof or any corporate constituency, that in accordance with the Person’s bylaws or charter documents performs the duties of the Board of Directors), (ii) in the case of any limited liability company, the board of managers of such Person (or any duly authorized committee thereof), (iii) in the case of any partnership, the board of directors of the general partner of such Person and (iv) in any other case, the functional equivalent of the foregoing or, in each case, any duly authorized committee of such body.

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“Board Resolution” means a copy of a resolution certified pursuant to an Officers’ Certificate to have been duly adopted by the Board of Directors of the Parent or the Issuer and to be in full force and effect, and delivered to the Trustee.

“Capital Expenditures” means, with respect to any Person for any period, the aggregate of all cash expenditures by such Person and its Subsidiaries during such period that in accordance with GAAP are or should be included in “property, plant and equipment” or in a similar fixed asset account on its balance sheet, and including all Capitalized Lease Obligations paid or payable during such period.

“Capitalized Lease” means a lease required to be capitalized for financial reporting purposes in accordance with GAAP.

“Capitalized Lease Obligations” of any Person means the Obligations of such Person to pay rent or other amounts under a Capitalized Lease, and the amount of such Obligations shall be the capitalized amount thereof determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. For purposes of Section 4.11, a Capital Lease Obligation will be deemed to be secured by a Lien on the property being leased.

“Cash Equivalents” means:

(1) marketable direct obligations issued or fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) maturing within 360 days of the date of acquisition thereof;

(2) demand and time deposits and certificates of deposit or acceptances, maturing within 360 days of the date of acquisition thereof, of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500 million and is rated “A” (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) or any money-market fund sponsored by a registered broker dealer or mutual fund distributor;

(3) commercial paper maturing no more than 270 days from the date of creation thereof issued by a corporation that is not the Issuer or an Affiliate of the Issuer, and is organized under the laws of any State of the United States of America or the District of Columbia and rated at least A-1 by S&P or at least P-1 by Moody’s;

(4) repurchase obligations with a term of not more than ten days for underlying securities of the types described in clause (1) above entered into with any commercial bank meeting the specifications of clause (2) above;

(5) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within 360 days from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s;

(6) in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by them from time to time; and

(7) money market or other mutual funds substantially all of whose assets comprise securities of the types described in clauses (1) through (5) above.

“Collateral” means all the collateral described in the Security Documents.

“Collateral Agent” means at any time the Person acting as the collateral agent for the Notes.

“Confirmation Order” shall have the meaning set forth in the Reorganization Plan.

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“Consolidated Amortization Expense” means, for any period-, the amortization expense of the Parent and the Restricted Subsidiaries for such period (excluding amortization expenses attributable to a prepaid item that was paid in cash in a prior period), determined on a consolidated basis in accordance with GAAP.

“Consolidated Depreciation Expense” means, for any period, the depreciation expense of the Parent and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“Consolidated EBITDA” means, for any period, Consolidated Net Income for such period plus, without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (a) Consolidated Depreciation Expense, (b) Consolidated Amortization Expense, (c) Consolidated Income Tax Expense and (d) Consolidated Interest Expense and minus, to the extent included in the statement of such Consolidated Net Income for such period, interest income, all as determined on a consolidated basis for the Parent and the Restricted Subsidiaries. In addition, “Consolidated EBITDA” for any period including the first four full fiscal quarters following the Effective Date shall be subject to any non-cash adjustment with respect to such quarters required to be made by the Issuer’s independent certified public accountants as a result of “fresh start” accounting, and with respect to the four fiscal quarters prior to the Effective Date “Consolidated EBITDA” shall be so adjusted on a pro forma basis as though the Reorganization Plan had become effective on the first day of such period.

“Consolidated Income Tax Expense” for any period means the provision for taxes of the Parent and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“Consolidated Interest Expense” for any period means the sum, without duplication, of the total interest expense of the Parent and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP and including, without duplication:

(1) imputed interest on Capitalized Lease Obligations and Attributable Indebtedness,

(2) commissions, discounts and other fees and charges owed with respect to letters of credit securing financial obligations, bankers’ acceptance financing and receivables financings,

(3) the net costs associated with Hedging Obligations related to interest rates,

(4) amortization of debt discount or premium, consent fees, fees paid or payable in connection with the Reorganization Plan and debt issuance costs, including commitment fees,

(5) the interest portion of any deferred payment obligations,

(6) capitalized interest,

(7) the product of (a) all dividend payments on any series of Disqualified Equity Interests of the Parent or any Preferred Stock of any Restricted Subsidiary (other than any such Disqualified Equity Interests or any Preferred Stock held by the Parent or a Wholly-Owned Restricted Subsidiary or to the extent paid in Qualified Equity Interests), multiplied by (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of the Parent and the Restricted Subsidiaries, expressed as a decimal,

(8) all interest payable with respect to discontinued operations,

(9) all interest on any Indebtedness described in clause (7) or (8) of the definition of Indebtedness,

(10) non cash interest expense, and

(11) cash contributions to any employee stock ownership plan or trust to pay interest or fees to any Person (other than the Parent) in connection with Indebtedness Incurred by such plan or trust.

“Consolidated Net Income” for any period means the net income (or loss) of the Parent and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein), without duplication:

(1) the net income (or loss) of any Person that is not a Restricted Subsidiary, (i) except to the extent that cash in an amount equal to any such income has actually been received by the Parent or, subject to clause (3) below, any Restricted Subsidiary during such period and (ii) except that the Parent’s equity in a net loss of any such Person for such period shall be included in determining Consolidated Net Income;

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(2) except to the extent includible in the consolidated net income of the Parent pursuant to the foregoing clause (1), the net income (or loss) of any Person that accrued prior to the date that (a) such Person becomes a Restricted Subsidiary or is merged into or consolidated with the Parent or any Restricted Subsidiary or (b) the assets of such Person are acquired by the Parent or any Restricted Subsidiary;

(3) the net income of any Restricted Subsidiary during such period to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of that income is not permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary during such period, except that the Parent’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining Consolidated Net Income;

(4) unrealized non-cash gains and losses with respect to Hedging Obligations (including those resulting from the application of SFAS No. 133);

(5) the cumulative effect of any change in accounting principles;

(6) any extraordinary or non-recurring gain (or extraordinary or non-recurring loss), together with any related provision for taxes on any such extraordinary or non-recurring gain (or the tax effect of any such extraordinary or non-recurring loss), realized by the Parent or any Restricted Subsidiary during such period; excluding any restructuring investigation costs, including but limited to severance, professional fees related to restructuring, investigation and restatement activities, etc. that may be classified as extraordinary;

(7) non-cash compensation expense;

(8) any non-cash gains or losses resulting from the Shareholder Claim, Asset Sales, discontinued operations, prior acquisitions, impairments or write offs outside the ordinary course, closures of businesses or plants or inventory write-ups following the Reorganization Plan; and

(9) any income recognized as a result of adjustments made in connection with the Parent’s pending accounting restatements.

In addition, any return of capital with respect to an Investment that decreased the amount of Investments outstanding pursuant to clause (11) of the definition of “Permitted Investments” shall be excluded from Consolidated Net Income for purposes of calculating the Restricted Payments Basket.

For purposes of this definition of “Consolidated Net Income,” “nonrecurring” means any gain or loss as of any date that is not reasonably likely to recur within the two years following such date; provided that if there was a gain or loss similar to such gain or loss within the two years preceding such date, such gain or loss shall not be deemed nonrecurring.

For the purposes of the definition of “Consolidated New Income,” any and all costs or expenses associated with the Reorganization Plan, the Parent’s pending accounting restatements and the Shareholder Claim, including, without limitation, any professional, consulting or advisory fees and the costs and expenses of any investigations or litigations shall not be considered extraordinary or non-recurring gain or losses.

“Consolidated Net Worth” means, with respect to any Person as of any date, the consolidated stockholders’ equity of such Person, determined on a consolidated basis in accordance with GAAP, less (without duplication) (1) any amounts thereof attributable to Disqualified Equity Interests of such Person or

6

its Subsidiaries or any amount attributable to Unrestricted Subsidiaries and (2) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of tangible assets of a going concern business made within twelve months after the acquisition of such business) subsequent to the Initial Issue Date in the book value of any asset owned by such Person or a Subsidiary of such Person.

“Corporate Trust Office” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at: The Bank of New York Mellon Trust Company, N.A., 525 William Penn Place, 38th Floor, Pittsburgh, PA 15259, Fax 412-234-7535, Attention: Corporate Trust Administration, or such other address as the Trustee may designate form time to time by notice to the Holders and the Issuer, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Issuer).

“Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

“Default” means (1) any Event of Default or (2) any event, act or condition that, after notice or the passage of time or both, would be an Event of Default.

“Default Rate” means, upon a declaration of acceleration in accordance with Section 6.02, an additional 2.0% over the interest rate on the principal of and an increase of 2.0% per annum above the amount of all accrued and unpaid interest on the Notes

“Depository” means, with respect to the Notes issued in the form of one or more Global Notes, The Depository Trust Company or another Person designated as Depository by the Issuer, which Person must be a clearing agency registered under the Exchange Act.

“Designation” has the meaning given to this term in Section 4.15.

“Designation Amount” has the meaning given to this term in Section 4.15.

“Disqualified Equity Interests” of any Person means any class of Equity Interests of such Person that, by its terms, or by the terms of any related agreement or of any security into which it is convertible, puttable or exchangeable, is, or upon the happening of any event or the passage of time would be, required to be redeemed by such Person, whether or not at the option of the holder thereof, or matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, is convertible or exchangeable at the option of the holders for Indebtedness or Disqualified Stock, in each case, on or prior to the date which is 91 days after the final maturity date of the Notes; provided, however, that any class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Equity Interests that are not Disqualified Equity Interests, and that is not convertible, puttable or exchangeable for Disqualified Equity Interests or Indebtedness, will not be deemed to be Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto solely by the delivery of Equity Interests that are not Disqualified Equity Interests; provided, further, however, that any Equity Interests that would not constitute Disqualified Equity Interests but for provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or exercisable) the right to require the Issuer to redeem such Equity Interests upon the occurrence of a change in control or an asset sale occurring prior to the 91st day after the final maturity date of the Notes shall not constitute Disqualified Equity Interests if the change of control or asset sale provisions applicable to such Equity Interests are no more favorable, taken as a whole, to such holders than the provisions of Section 4.09, and such Equity Interests specifically provide that the Issuer will not redeem any such Equity Interests pursuant to such provisions prior to the Parent’s or Issuer’s purchase of the Notes as required pursuant to the provisions of Section 4.09.

“Equity Interests” of any Person means (1) any and all shares or other equity interests (including common stock, Preferred Stock, limited liability company interests and partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such Person.

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“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Fair Market Value” means, with respect to any asset, the price (after taking into account any liabilities relating to such asset) that would be negotiated in an arm’s-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction. Fair Market Value (other than of any asset with a public trading market) in excess of $5 million shall be determined by the Board of Directors of the Issuer acting reasonably and in good faith and shall be evidenced by a board resolution delivered to the Trustee.

“Fixed Charge Coverage Ratio” means with respect to the Parent, on the last day of the prior full fiscal quarter period immediately preceding the date of the relevant Interest Payment Date (the “Transaction Date”) giving rise to the need to calculate the Fixed Charge Coverage Ratio (such one full fiscal quarter period being referred to herein as the “One Quarter Period”), the ratio of (a) the aggregate amount of Consolidated EBITDA for the One Quarter Period ending on such day to (b) the sum of (i) Consolidated Interest Expense for the One Quarter Period ending on such day, plus (ii) the aggregate amount of dividends paid on any class of the Parent’s Capital Stock during the One Quarter Period ending on such day, plus (iii) all scheduled principal payments of debt and any prepayments to the extent there is an equivalent reduction in the commitments thereunder, plus (iv) Consolidated Income Tax Expense for the One Quarter Period ending on such day, plus (v) Capital Expenditures made during the period, exclusive of any Capitalized Expenditures to the extent financed with the proceeds of borrowed money excluding intercompany Indebtedness (collectively, “Consolidated Fixed Charges”). In the event the Parent or any of the Restricted Subsidiaries Incurs or redeems any Indebtedness (other than in the case of revolving credit borrowings in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues or redeems Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence or redemption of Indebtedness, or such issuance or redemption of Preferred Stock, as if the same had occurred at the beginning of the applicable One Quarter Period.

For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations, as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes that the Issuer or any of its Restricted Subsidiaries has both determined to make and made after the Initial Issue Date and during the One Quarter Period or subsequent to such period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and discontinued operations (and the change of any Consolidated Fixed Charges and the change in Consolidated EBITDA resulting therefrom) had occurred on the first day of the One Quarter Period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, discontinued operation or operational change, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation, discontinued operation or operational change had occurred at the beginning of the applicable One Quarter Period.

For purposes of this definition, whenever pro forma effect is to be given to any transaction, the pro forma calculations (including of cost savings and synergies) shall be made in good faith by a responsible financial or accounting officer of the Issuer. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period. Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a

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revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.

“Foreign Subsidiary” means, with respect to any Person, any Subsidiary of such Person that is not organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof.

“Foreign Subsidiary Investments” means Investments by the Issuer or a Guarantor in a direct or indirect Foreign Subsidiary of the Parent, provided that no Issuer or Guarantor may make Foreign Subsidiary Investments unless:

(1) such Investment occurs at least 365 days following the Initial Issue Date;

(2) the aggregate amount of such Investments does not exceed $10 million in any fiscal year or $45 million over the term of the Indenture;

(3) in the fiscal quarter in which such Investments will be made, such Investments are less than or equal to the difference of (A) the sum of (i) Average Cash and (ii) Prepaid Notes, minus (B) $50 million;

(4) at least 65% of the Equity Interests of the Foreign Subsidiary or Foreign Subsidiaries receiving such Investments are pledged pursuant to the Security Documents;

(5) such Investments are made no more frequently than once a fiscal quarter; and

(6) the Parent or the Issuer delivers to the Trustee an officer’s certificate from the Chief Executive Officer or Chief Financial Officer of such Person certifying that such Investments comply with clauses (1) through (5) above.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect on the Initial Issue Date.

“Guarantee” means a direct or indirect guarantee by any Person of any Indebtedness of any other Person and includes any obligation, direct or indirect, contingent or otherwise, of such Person: (1) to purchase or pay (or advance or supply funds for the purchase or payment of) Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm’s-length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); “guarantee,” when used as a verb, and “guaranteed” have correlative meanings.

“Guarantors” means (i) the Parent and each Restricted Subsidiary which is a Subsidiary of the Parent (other than a Foreign Subsidiary) on the Initial Issue Date, and (ii) each other Person that is required to, or at the election of the Issuer does, become a Guarantor by the terms of this Indenture after the Initial Issue Date, in each case, until such Person is released from its Note Guarantee in accordance with the terms of this Indenture. General Scanning Securities Corp., shall not be required to be a Guarantor on the Initial Issue Date or thereafter.

“Hedging Obligations” of any Person means the obligations of such Person under swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates, currency exchange rates, commodities or commodity prices, either generally or under specific contingencies.

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“Holder” means any registered holder, from time to time, of the Notes.

“Incur” means, with respect to any Indebtedness or Obligation, incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to such Indebtedness or Obligation; provided that (1) the Indebtedness of a Person existing at the time such Person became a Restricted Subsidiary shall be deemed to have been incurred by such Restricted Subsidiary and (2) neither the accrual of interest nor the accretion of original issue discount or the accretion of principal or the payment of interest in the form of additional Indebtedness or accumulation of dividends on any Equity Interests shall be deemed to be an incurrence of Indebtedness.

“Indebtedness” of any Person at any date means, without duplication:

(1) all liabilities, contingent or otherwise, of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof);

(2) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments (other than letter of credit obligations entered into in the ordinary course of business, to the extent such letter of credit are not drawn upon, or if and to the extent drawn upon, such drawing is reimbursed no later than the fifth Business Day following the receipt by such Person of a demand or reimbursement following payment on the letter of credit);

(3) all reimbursement obligations of such Person in respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions (except to the extent such letter of credit or other transaction is not drawn upon, or if and to the extent drawn upon, such drawing is reimbursed no later than the fifth Business Day following the receipt by such Person of a demand for reimbursement following payment on such letter of credit or other transaction, or extends to a trade payable and is satisfied no later than the tenth Business Day after it is drawn upon);

(4) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred by such Person in the ordinary course of business in connection with obtaining goods, materials or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery or title thereto;

(5) the maximum fixed redemption or repurchase price of all Disqualified Equity Interests of such Person;

(6) all Capitalized Lease Obligations of such Person;

(7) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person;

(8) all Indebtedness of others guaranteed by such Person to the extent of such guarantee; provided that Indebtedness of the Parent or its Subsidiaries that is guaranteed by the Parent or the Parent’s Subsidiaries shall only be counted once in the calculation of the amount of Indebtedness of the Parent and its Subsidiaries on a consolidated basis;

(9) all Attributable Indebtedness;

(10) to the extent not otherwise included in this definition, Hedging Obligations of such Person; and

(11) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person.

The amount of any Indebtedness which is incurred at a discount to the principal amount at maturity thereof as of any date shall be deemed to have been incurred at the accreted value thereof as of such date. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above, the maximum liability of such Person for any such contingent obligations at such date and, in the case of clause (7), the lesser of (a) the Fair Market Value of any asset subject to a Lien securing the Indebtedness of others on the date that the Lien attaches and (b) the amount of the Indebtedness secured. The principal amount of the Indebtedness under any Hedging Obligations at any time shall be equal to the amount payable as a result of the termination of the arrangement or agreement for such Hedging Obligations at such time. For purposes of clause (5), the “maximum fixed redemption or

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repurchase price” of any Disqualified Equity Interests that do not have a fixed redemption or repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity Interests were redeemed or repurchased on any date on which an amount of Indebtedness outstanding shall be required to be determined pursuant to this Indenture.

“Indenture” means this Indenture as amended, restated or supplemented from time to time.

“Independent Director” means a director of the Parent or the Issuer who is independent with respect to the transaction at issue.

“Independent Financial Advisor” means an accounting, appraisal or investment banking firm of nationally recognized standing that is, in the reasonable judgment of the Parent’s or the Issuer’s Board of Directors, qualified to perform the task for which it has been engaged and disinterested and independent with respect to the Issuer and its Affiliates.

“Initial Issue Date” means July     , 2010, the date on which the Initial Notes are originally issued.

“Initial Notes” means $107,040,000 aggregate principal amount of Notes issued under this Indenture on the Initial Issue Date.

“Institutional Accredited Investor” means an institution that is an “accredited investor” as that term is defined in Rule 501(a)(1), (2), (3) or (7) promulgated under the Securities Act.

“Interest” means, with respect to the Notes, interest on the Notes (including Cash Interest (as defined in the Notes) and PIK Interest)

“Interest Payment Dates” means each February 15, May 15, August 15 and November 15, commencing August 15, 2010.

“Investments” of any Person means:

(1) all direct or indirect investments by such Person in any other Person in the form of loans, advances or capital contributions or other credit extensions constituting Indebtedness of such other Person, and any guarantee of Indebtedness of any other Person;

(2) all purchases (or other acquisitions for consideration) by such Person of Indebtedness, Equity Interests or other securities of any other Person (other than any such purchase that constitutes a Restricted Payment of the type described in clause (2) of the definition thereof);

(3) all other items that would be classified as investments on a balance sheet of such Person prepared in accordance with GAAP (including, if required by GAAP, purchases of assets outside the ordinary course of business); and

(4) the Designation of any Subsidiary as an Unrestricted Subsidiary.

Except as otherwise expressly specified in this definition, the amount of any Investment (other than an Investment made in cash) shall be the Fair Market Value thereof on the date such Investment is made. The amount of Investment pursuant to clause (4) shall be the Designation Amount determined in accordance with Section 4.15. If the Parent or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests of any Restricted Subsidiary, or any Restricted Subsidiary issues any Equity Interests, in either case, such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary, the Parent shall be deemed to have made an Investment on the date of any such sale or other disposition equal to the Fair Market Value of the Equity Interests of all other Investments in such Subsidiary retained by the Parent or any Restricted Subsidiary. Notwithstanding the foregoing, purchases or redemptions of Equity Interests or Indebtedness of the Parent by the Parent shall be deemed not to be Investments and (ii) purchases otherwise permitted under this Indenture or redemptions of Notes by the Issuer or Parent pursuant to the terms of the Indenture shall be deemed not to be Investments.

“Issuer” means the party named as such in the first paragraph of this Indenture until a successor replaces such party pursuant to Article Five and thereafter means the successor.

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“Issuer Request” means any written request signed in the name of the Issuer by the Chairman of the Board of Directors, any Vice Chairman, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer or the Treasurer of the Issuer or the Parent and attested to by the Secretary or any Assistant Secretary of the Issuer or the Parent.

“Lien” means, with respect to any asset, any mortgage, deed of trust, lien (statutory or other), pledge, lease, easement, restriction, covenant, charge, security interest or other encumbrance of any kind or nature in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement.

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

“Net Available Proceeds” means, with respect to any Asset Sale (other than a sale of Auction Rate Securities), the proceeds thereof in the form of cash or Cash Equivalents, calculated after the following items have been deducted from such proceeds:

(1) reasonable brokerage commissions and other reasonable fees and expenses (including reasonable fees, discounts and expenses of legal counsel, accountants and investment banks, consultants and placement agents) of such Asset Sale;

(2) provisions for Taxes payable as a result of such Asset Sale (after taking into account any available Tax credits or deductions and any Tax sharing arrangements);

(3) amounts required to be paid to any Person (other than the Issuer or any Guarantor) owning a beneficial interest in the assets subject to the Asset Sale or having a Lien thereon, except with respect to the Working Capital Facility which will be subject to the fourth paragraph of Section 4.09;

(4) the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the assets sold at the time of, or within 60 days after the date of, such Asset Sale; and

(5) appropriate amounts to be provided by the Parent or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any adjustment in the sale price of such asset or assets or liabilities associated with such Asset Sale and retained by the Parent or any Restricted Subsidiary, as the case may be, after such Asset Sale, including pensions and other postemployment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale; provided, however, that any amounts remaining after adjustments, revaluations or liquidations of such reserves shall constitute proceeds for purposes of making the above calculation.

“Non-Recourse Debt” means Indebtedness of an Unrestricted Subsidiary:

(1) as to which neither the Parent nor any Restricted Subsidiary (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender;

(2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than any Credit Facility or the Notes) of the Parent or any Restricted Subsidiary to declare a default on the other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and

(3) as to which the lenders have been notified in writing that they will not have any recourse to the Equity Interests or assets of the Parent or any Restricted Subsidiary.

“Note Guarantee” has the meaning given to this term in Section 10.01.

“Notes” means the 12.25% Senior Secured PIK Election Notes due January 15, 2014 issued by the Issuer, treated as a single class of securities, as amended from time to time in accordance with the terms hereof, that are issued pursuant to this Indenture, including, without limitation, any Related PIK Notes issued in respect of Notes and any increase in the principal amount of outstanding Notes as a result of a PIK Payment.

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“Obligation” means any principal, interest, penalties, fees, indemnification, reimbursements, costs, expenses, damages and other liabilities payable under the documentation governing any Indebtedness.

“Offer” has the meaning set forth in the definition of “Offer to Purchase.”

“Offer Expiration Date” has the meaning set forth in the definition of “Offer to Purchase.”

“Offer to Purchase” means a written offer (the “Offer”) sent by or on behalf of the Parent or the Issuer by first-class mail, postage prepaid, to each Holder at its address appearing in the register for the Notes on the date of the Offer offering to purchase up to the principal amount of Notes specified in such Offer at the purchase price specified in such Offer (as determined pursuant to this Indenture). Unless otherwise required by applicable law, the Offer shall specify an expiration date (the “Offer Expiration Date”) of the Offer to Purchase, which shall be not less than 30 days nor more than 60 days after the date of such Offer, and a settlement date (the “Purchase Date”) for purchase of Notes to occur no later than three Business Days after the Offer Expiration Date. The Offer shall contain all the information required by applicable law to be included therein. The Offer shall also contain information concerning the business of the Parent and its Subsidiaries which the Parent or the Issuer in good faith believes will enable such Holders to make an informed decision with respect to the Offer to Purchase. The Offer shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Offer to Purchase. The Offer shall also state:

(1) the Section of this Indenture pursuant to which the Offer to Purchase is being made;

(2) the Offer Expiration Date and the Purchase Date;

(3) the aggregate principal amount of the outstanding Notes offered to be purchased by the Parent or the Issuer pursuant to the Offer to Purchase (including, if less than 100%, the manner by which such amount has been determined pursuant to the Section of this Indenture requiring the Offer to Purchase) (the “Purchase Amount”);

(4) the purchase price to be paid by the Parent or the Issuer for each $1,000 aggregate principal amount of Notes accepted for payment (the “Purchase Price”);

(5) that the Holder may tender all or any portion of the Notes registered in the name of such Holder and that any portion of a Note tendered must be tendered in minimum denominations of $2,000 and integral multiples of $1,000 principal amount;

(6) the place or places where Notes are to be surrendered for tender pursuant to the Offer to Purchase;

(7) that interest on any Note not tendered or tendered but not purchased by the Parent or the Issuer pursuant to the Offer to Purchase will continue to accrue;

(8) that on the Purchase Date the Purchase Price will become due and payable upon each Note being accepted for payment pursuant to the Offer to Purchase and that interest thereon shall cease to accrue on and after the Purchase Date;

(9) that each Holder electing to tender all or any portion of a Note pursuant to the Offer to Purchase will be required to surrender such Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, at the place or places specified in the Offer prior to the close of business on the Offer Expiration Date (such Note being, if the Parent or the Issuer so requires, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Parent or the Issuer duly executed by, the Holder thereof or its attorney duly authorized in writing);

(10) that Holders will be entitled to withdraw all or any portion of Notes tendered if the Parent or the Issuer receives, not later than the close of business on the fifth Business Day preceding the Offer Expiration Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder tendered, the certificate number of the Note the Holder tendered and a statement that such Holder is withdrawing all or a portion of its tender;

(11) that (a) if Notes in an aggregate principal amount less than or equal to the Purchase Amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the Parent or the Issuer shall purchase all such Notes and (b) if Notes in an aggregate principal amount in excess of the Purchase Amount are tendered and not withdrawn pursuant to the Offer to Purchase, the Parent or the

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Issuer shall purchase Notes having an aggregate principal amount equal to the Purchase Amount on a pro rata basis (with such adjustments as may be deemed appropriate so that only Notes in an aggregate principal amount of $2,000 or greater and integral multiples of $1,000 shall be purchased); and

(12) that in the case of any Holder whose Note is purchased only in part, the Parent or the Issuer shall execute and deliver to the Holder of such Note without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unpurchased portion of the Note so tendered.

An Offer to Purchase shall be governed by and effected in accordance with the provisions above pertaining to any Offer.

On or before the Purchase Date, the Parent or the Issuer shall (i) accept for payment Notes or portions thereof tendered and not withdrawn pursuant to the Offer, (ii) deposit with the Trustee U.S. Dollars sufficient to pay the Purchase Price, plus accrued interest, if any, of all Notes to be purchased through and including the Purchase Date and (iii) deliver to the Trustee Notes so accepted together with an Officers’ Certificate stating the Notes or portions thereof being purchased by the Parent or the Issuer. The Trustee shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the Purchase Price, plus accrued interest, if any, thereon.

“Officer” means any of the following of the Parent or the Issuer: the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary.

“Officers’ Certificate” means a certificate signed on behalf of a Person by two Officers of such Person.

“Opinion of Counsel” means a written opinion reasonably satisfactory in form and substance to the Trustee from legal counsel stating the matters required by Section 11.05 and delivered to the Trustee.

“Original Notes” means the Notes (including any Related PIK Notes) issued on the Initial Issue Date to the initial Holders and owned by such initial Holders (or their Affiliates), but not any Notes owned by such initial Holders (or their Affiliates) if acquired by them after the Initial Issue Date.

“Parent” has the meaning set forth in the introductory paragraph to this Agreement.

“Permitted Business” means the businesses engaged in by the Parent and its Restricted Subsidiaries on the Initial Issue Date and businesses that are reasonably related thereto or reasonable extensions thereof.

“Permitted Investments” means (each of which shall be given independent effect in whole or in part):

(1) (i) Investments by the Parent or any Restricted Subsidiary in (a) the Issuer or any Guarantor, or (b) any Person that will become immediately after such Investment a Guarantor or that will merge or consolidate into the Issuer or any Guarantor; provided however, that the primary business of such Person is a Permitted Business; or (ii) any Investment by a Restricted Subsidiary that is not a Guarantor or the Issuer in (a) another Restricted Subsidiary that is not a Guarantor or the Issuer or (b) any Person that will become immediately after such Investment a Restricted Subsidiary that is not a Guarantor or that will merge or consolidate into a Restricted Subsidiary that is not a Guarantor or the Issuer;

(2) loans and advances to directors, employees and officers of the Parent and the Restricted Subsidiaries for bona fide business purposes and to purchase Equity Interests of the Parent not in excess of $2.5 million at any one time outstanding;

(3) Hedging Obligations entered into for bona fide hedging purposes of the Parent or any Restricted Subsidiary not for the purpose of speculation;

(4) cash and Cash Equivalents;

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(5) accounts and notes receivables owing to the Parent or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Parent or any such Restricted Subsidiary deems reasonable under the circumstances;

(6) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or any exchange of such investment with the issuer thereof or taken in settlement of or other resolution of claims or disputes;

(7) Investments received in connection with an Asset Sale that was made in compliance with Section 4.09;

(8) lease, utility and other similar deposits in the ordinary course of business;

(9) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Parent or any Restricted Subsidiary or in satisfaction of judgments;

(10) payroll, travel and similar advances to cover matters that are expected at the time of such advance ultimately to be treated as an expense;

(11) other Investments made after the Initial Issue Date in an aggregate amount not to exceed $5 million in any fiscal year (with each Investment being valued as of the date made and without regard to subsequent changes in value); provided that no Investment made in reliance on this clause (11) shall be made in any Person that is the direct or indirect holder of more than 25% of the outstanding Equity Interests of the Parent;

(12) Investments of the Parent and the Restricted Subsidiaries, to the extent outstanding on the Initial Issue Date;

(13) any assets, capital stock or other securities to the extent acquired for capital stock other than Disqualified Equity Interests; and

(14) Foreign Subsidiary Investments.

The amount of Investments outstanding at any time pursuant to clause (11) above shall be deemed to be reduced:

(a) upon the disposition or repayment of or return on any Investment made pursuant to clause (11), by an amount equal to the return of capital with respect to such Investment to the Parent or any Restricted Subsidiary (to the extent not included in the computation of Consolidated Net Income); and

(b) upon a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, by an amount equal to the lesser of (x) the Fair Market Value of the Parent’s proportionate interest in such Subsidiary immediately following such Redesignation, and (y) the aggregate amount of Investments in such Subsidiary that increased (and did not previously decrease) the amount of Investments outstanding pursuant to clause (11).

“Permitted Liens” means the following types of Liens:

(1) Liens for Taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as to which the Parent or the Restricted Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP;

(2) Liens of landlords, carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof and rights to offset and set-off;

(3) Liens incurred or deposits made in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory or regulatory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money), in each case incurred in the ordinary course of business;

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(4) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods, incurred in the ordinary course of business;

(5) judgment Liens not giving rise to an Event of Default so long as such Liens are adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which the proceedings may be initiated has not expired;

(6) easements, rights-of-way, zoning restrictions, title irregularities and other similar charges, restrictions or encumbrances in respect of real property which do not, in the aggregate, impair in any material respect the ordinary conduct of the business of the Parent and the Restricted Subsidiaries taken as a whole;

(7) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other assets relating to such letters of credit and products and proceeds thereof; provided, however, that such obligations do not constitute Indebtedness;

(8) Liens encumbering deposits made to secure obligations arising from contractual or warranty requirements of the Parent or any Restricted Subsidiary, including rights of offset and set-off, granted in the ordinary course of business;

(9) Liens, rights of set-off and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more of accounts maintained by the Parent or any Restricted Subsidiary, in each case granted in the ordinary course of business in favor of the financial institution with which such accounts are maintained, securing amounts owing to such financial institution with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;

(10) leases or subleases, and licenses or sublicenses, in either case on a non-exclusive basis, granted to others that do not materially interfere with the ordinary course of business of the Parent or any Restricted Subsidiary;

(11) Liens arising from filing precautionary Uniform Commercial Code financing statements regarding operating leases;

(12) Liens securing all of the Notes and Liens securing any Note Guarantee;

(13) Liens existing on the Initial Issue Date;

(14) Liens to secure the Working Capital Obligations;

(15) Liens securing Acquired Indebtedness permitted to be incurred under this Indenture; provided that the Liens do not extend to assets not subject to such Lien at the time of acquisition (other than improvements thereon and substitutions and replacements thereto) and are no more favorable to the lienholders than those securing such Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by the Parent or a Restricted Subsidiary;

(16) Liens to secure Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (12), (13), (14), and (15) ; provided that in the case of Liens securing Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (12), (13), (14), and (15), such Liens do not extend to any additional assets (other than improvements thereon and replacements thereof);

(17) Liens in favor of customs and revenue authorities arising as a matter of law and in the ordinary course of business to secure payment of customs duties in connection with the importation of goods;

(18) Liens securing Indebtedness incurred pursuant to clauses (3), (6) and (11) of Section 4.06; and

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(19) Liens arising in connection with the placement by the Parent or any Restricted Subsidiary of a reasonable amount of cash (as determined in good faith by the Parent’s or the Issuer’s Board of Directors) in escrow against any obligations permitted pursuant to clause (9) of Section 4.06 (other than with respect to obligations incurred or assumed in connection with the acquisition, disposition, issuance or redemption of Equity Interests of the Parent).

“Person” means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind.

“Physical Notes” means certificated Notes in registered form in substantially the form set forth in Exhibit A.

“Plan of Liquidation” with respect to any Person, means a plan that provides for, contemplates or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously, in phases or otherwise): (1) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person otherwise than as an entirety or substantially as an entirety; and (2) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the remaining assets of such Person to holders of Equity Interests of such Person.

“PIK Interest” means interest paid with respect to the Notes in the form of increasing the outstanding principal amount of the Notes or issuing PIK Notes.

“PIK Notes” means additional Notes issued under this Indenture on the same terms and conditions as the Notes in connection with a PIK Payment containing the same terms and conditions as the Notes (other than issue date and the interest rate). For purposes of this Indenture, all references to “PIK Notes” shall include the Related PIK Notes.

“PIK Payment” means an interest payment with respect to the Notes made by increasing the outstanding principal amount of the Notes or issuing PIK Notes.

“Prepaid Notes” means the aggregate principal amount of all Notes that have been voluntarily prepaid or redeemed since the Initial Issue Date, in an aggregate amount not to exceed $30 million.

“Preferred Stock” means, with respect to any Person, any and all preferred or preference stock or other equity interests (however designated) of such Person whether now outstanding or issued after the Initial Issue Date.

“Principal” means, with respect to the Notes, the principal of, and premium, if any, on the Notes including, without limitation, any increase in the principal amount of the outstanding Notes as a result of a PIK Payment.

“Purchase Amount” has the meaning set forth in the definition of “Offer to Purchase.”

“Purchase Date” has the meaning set forth in the definition of “Offer to Purchase.”

“Purchase Money Indebtedness” means Indebtedness, including Capitalized Lease Obligations, of the Parent, or any Restricted Subsidiary incurred for the purpose of financing all or any part of the purchase price or improvement of property, plant or equipment purchased, constructed or improved at any time after the Initial Issue Date and used in the business of the Parent or any Restricted Subsidiary or the cost of installation, construction or improvement thereof and fees and other obligations incurred in connection therewith, as amended or otherwise restructured (other than pursuant to a refinancing); provided, however, that (1) the amount of such Indebtedness shall not exceed such purchase price or cost and (2) such Indebtedness shall be incurred within 90 days after such acquisition of such asset by the Parent or such Restricted Subsidiary or such installation, construction or improvement.

“Purchase Price” has the meaning set forth in the definition of “Offer to Purchase.”

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“Qualified Equity Interests” of any Person means Equity Interests of such Person other than Disqualified Equity Interests; provided that such Equity Interests shall not be deemed Qualified Equity Interests to the extent sold or owed to a Subsidiary of such Person or financed, directly or indirectly, using funds (1) borrowed from such Person or any Subsidiary of such Person until and to the extent such borrowing is repaid or (2) contributed, extended, guaranteed or advanced by such Person or any Subsidiary of such Person (including, without limitation, in respect of any employee stock ownership or benefit plan). Unless otherwise specified, Qualified Equity Interests refer to Qualified Equity Interests of the Parent.

“Redeem” means to redeem, repurchase, purchase, defease (including a covenant defeasance), retire, discharge or otherwise acquire or retire for value; and “redemption” shall have a correlative meaning; provided that this definition shall not apply for purposes of Section 3.01.

“Redemption Date” when used with respect to any Note to be redeemed means the date fixed for such redemption pursuant to the terms of the Notes.

“Redemption Price” means the price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest thereon, if any, to, but not including, the Redemption Date.

“Refinance” means to refinance, repay, prepay, replace, renew or refund.

“Refinancing Indebtedness” means Indebtedness of the Parent or a Restricted Subsidiary incurred in exchange for, or the proceeds of which are used to redeem or refinance in whole or in part, any Indebtedness of the Parent or any Restricted Subsidiary (the “Refinanced Indebtedness”); provided that:

(1) the principal amount (and accreted value, in the case of Indebtedness issued at a discount) of the Refinancing Indebtedness does not exceed the principal amount (and accreted value, as the case may be) of the Refinanced Indebtedness (including any capitalized or paid-in-kind interest) plus the amount of accrued and unpaid interest on the Refinanced Indebtedness, any premium paid to the holders of the Refinanced Indebtedness and expenses incurred or to be paid in connection with the incurrence of the Refinancing Indebtedness;

(2) the obligor of Refinancing Indebtedness does not include any Person (other than (i) the Issuer or any Guarantor, in the case of Indebtedness subject to such redemption or refinancing having been incurred by the Issuer or any Guarantor or (ii) any Restricted Subsidiary that is not a Guarantor or the Issuer, in the case of Indebtedness subject to such redemption or refinancing having been Incurred by any Restricted Subsidiary that is not a Guarantor or the Issuer) that is not an obligor of the Refinanced Indebtedness;

(3) if the Refinanced Indebtedness was subordinated in right of payment to the Notes or the Note Guarantees, as the case may be, then such Refinancing Indebtedness, by its terms, is subordinate in right of payment to the Notes or the Note Guarantees, as the case may be, at least to the same extent as the Refinanced Indebtedness;

(4) the Refinancing Indebtedness has a final stated maturity either (a) no earlier than the Refinanced Indebtedness being repaid or amended or (b) 121 days after the maturity date of the Notes; and

(5) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the maturity date of the Notes has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to Maturity of the portion of the Refinanced Indebtedness being repaid that is scheduled to mature on or prior to the maturity date of the Notes.

“Related PIK Notes” means, with respect to a Note, (i) each PIK Note issued in connection with a PIK Payment on such Note and (ii) each additional PIK Note issued in connection with a PIK Payment on a Related PIK Note with respect to such Note.

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“Reorganization Plan” means the Joint Plan of Reorganization proposed by the Debtors as amended or modified from time to time (whether any such amendment or modification is effected through an amendment or modification to the Reorganization Plan itself or through the Confirmation Order).

“Responsible Officer” when used with respect to the Trustee, means an officer or assistant officer assigned to the corporate trust department of the Trustee (or any successor group of the Trustee) with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

“Restatement Date” means the date on which the Parent files with the SEC under the Exchange Act (i) a Form 10-K for the fiscal year ended December 31, 2009, and (ii) any other periodic filings required by the Exchange Act or the SEC in order for the Company to become current with its reporting obligations under the Exchange Act.

“Restricted Payment” means any of the following:

(1) the declaration or payment of any dividend or any other distribution on Equity Interests of the Parent or any Restricted Subsidiary or any payment made to the direct or indirect holders (in their capacities as such) of Equity Interests of the Parent or any Restricted Subsidiary, including, without limitation, any payment in connection with any merger or consolidation involving the Parent or any Restricted Subsidiary but excluding (a) dividends or distributions payable solely in Qualified Equity Interests or through accretion or accumulation of such dividends on such Equity Interests and (b) in the case of Restricted Subsidiaries, dividends or distributions payable to the Parent or to a Restricted Subsidiary and pro rata dividends or distributions payable to minority stockholders of any Restricted Subsidiary;

(2) the purchase, repurchase, defeasance, redemption or other acquisition or retirement for value of any Equity Interests of the Parent or any Restricted Subsidiary, including, without limitation, any payment in connection with any merger or consolidation involving the Parent or any Restricted Subsidiary but excluding any such Equity Interests held by the Parent or any Restricted Subsidiary;

(3) any Investment other than a Permitted Investment; or

(4) any purchase, repurchase, defeasance, payment, redemption or other acquisition or retirement for value prior to the scheduled maturity or prior to any scheduled repayment of principal or sinking fund payment, as the case may be, in respect of Subordinated Indebtedness (other than (i) any Subordinated Indebtedness owed to and held by the Issuer or any Guarantor or (ii) any Subordinated Indebtedness of any Restricted Subsidiary that is not a Guarantor or the Issuer owed to and held by any other Restricted Subsidiary that is not a Guarantor or the Issuer).

“Restricted Subsidiary” means any Subsidiary of the Parent (including the Issuer) other than an Unrestricted Subsidiary.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

“S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc., and its successors.

“Sale and Leaseback Transactions” means, with respect to any Person, an arrangement with any bank, insurance company or other lender or investor or to which such lender or investor is a party, providing for the leasing by such Person of any asset of such Person which has been or is being sold or transferred by such Person to such lender or investor or to any Person to whom funds have been or are to be advanced by such lender or investor on the security of such asset.

“SEC” means the U.S. Securities and Exchange Commission.

“Secretary’s Certificate” means a certificate signed by the Secretary of the Parent or the Issuer.

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“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Security Agreement” means the Security Agreement to be executed and delivered by the Issuer and each Guarantor, substantially in the form of Exhibit D.

“Security Documents” means the Security Agreement and all other security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, control agreements or other grants or transfer of security, creating (or purporting to create) a Lien upon the collateral as contemplated by this Indenture and the Security Agreement, in each case, as amended, supplemented, restated, renewed, replaced or otherwise modified, in whole or in part, from time to time, in accordance with their respective terms and this Indenture.

“Shareholder Claim” means that certain class action lawsuit filed with the United States District Court for the District of Massachusetts against the Parent and certain of its current and former officers and directors in December 2008, docket number 1:08-cv-12065-GAO, as it may be amended from time to time.

“Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” of the Parent as defined in Regulation S-X promulgated pursuant to the Securities Act as such Regulation is in effect on the Initial Issue Date.

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provisions (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency unless such contingency has occurred).

“Subordinated Indebtedness” means Indebtedness of the Parent, or any Restricted Subsidiary that is expressly subordinated in right of payment to the Notes or the Note Guarantees, respectively.

“Subsidiary” means, with respect to any Person:

(1) any corporation, limited liability company, association or other business entity of which more than 50% of the total voting power of the Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person (or a combination thereof); and

(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).

“Tax” (and, with correlative meaning, “Taxes”) means all taxes, charges, fees, levies or other similar assessments or liabilities, including without limitation income, gross receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, services, withholding, employment, payroll and franchise taxes imposed by the United States or any state, local or foreign government, or any agency thereof, or other political subdivision of the Unites States or any such government, and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to, or incurred in connection with any Tax or any contest or dispute thereof.

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as amended.

“Trustee” means the party named as such in this Indenture until a successor replaces it pursuant to this Indenture and thereafter means the successor.

“Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of New York.

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“Unrestricted Subsidiary” means (1) any Subsidiary that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Parent or the Issuer in accordance with Section 4.15 and (2) any Subsidiary of an Unrestricted Subsidiary.

“U.S. Government Obligations” means direct non-callable obligations of, or guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States are pledged.

“Voting Stock” means, with respect to any Person, securities of any class of Equity Interests of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock or other relevant equity interest has voting power by reason of any contingency) to vote in the election of members of the Board of Directors of such Person.

“Weighted Average Life to Maturity,” when applied to any Indebtedness at any date, means the number of years obtained by dividing (1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity (but not including any redemption offer upon an asset sale, change of control or other similar obligation), in respect thereof by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (2) the then outstanding principal amount of such Indebtedness.

“Wholly-Owned Restricted Subsidiary” means a Restricted Subsidiary of which 100% of the Equity Interests (except for directors’ qualifying shares or certain minority interests owned by other Persons solely due to local law requirements that there be more than one stockholder, but which interest is not in excess of what is required for such purpose) are owned directly by the Parent or through one or more Wholly-Owned Restricted Subsidiaries.

“Working Capital Facility” means a debt or commercial credit facility of the Issuer or any Guarantor approved by Holders of at least a majority in aggregate principal amount of the Notes then outstanding.

“Working Capital Facility Security” means the security interest of the lender of the Working Capital Facility in the assets, and after acquired assets of the Issuer or the Guarantors, securing the Working Capital Obligations.

“Working Capital Obligations” mean the obligations constituting Indebtedness of the Issuer or any Guarantors under the Working Capital Facility.

SECTION 1.02. Other Definitions.

The definitions of the following terms may be found in the sections indicated as follows:

Term	Defined in Section
“Affiliate Transaction”	4.10(a)
“Agent Members”	2.16(a)
“Business Day”	11.07
“Cash Interest”	Exhibit A
“Contract Rate”	10.16
“Contract Rate Basis”	10.16
“Default Interest”	Exhibit A
“Effective Reorganization Plan”	2.18(2)
“Eligible Market”	6.05
“Event of Default”	6.01
“Excess Proceeds”	4.09
“Excess Working Capital Proceeds”	4.07(a)
“Global Notes”	2.16(a)
“Judgment Currency”	10.17(a)
“Judgment Conversion Date”	10.17(a)
“Legal Defeasance”	9.02
“Legal Holiday”	11.07
“Net Proceeds Excess”	4.09
“Net Proceeds Offer”	4.09
“Offered Price”	4.09
“Paying Agent”	2.04
“Payment Amount”	4.09
“Permitted Indebtedness”	4.06
“rate of exchange”	10.17(d)
“Redesignation”	4.15
“Registrar”	2.04
“Reporting Default”	6.05(a)
“Reporting Default Interest”	Exhibit A
“Restricted Payments Basket”	4.08(a)

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SECTION 1.03. Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, the portion of such provision required to be incorporated herein in order for this Indenture to be qualified under the TIA is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:

“indenture securities” means the Notes.

“indenture securityholder” means a Holder or Noteholder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Trustee.

“obligor on the indenture securities” means the Issuer, the Guarantors or any other obligor on the Notes.

All other terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule have the meanings therein assigned to them.

SECTION 1.04. Rules of Construction.

Unless the context otherwise requires:

(1) a term has the meaning assigned to it herein, whether defined expressly or by reference;

(2) “or” is not exclusive;

(3) words in the singular include the plural, and in the plural include the singular;

(4) words used herein implying any gender shall apply to both genders;

(5) “herein,” “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or Subsection;

(6) unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP as in effect from time to time, applied on a basis consistent with the most recent audited consolidated financial statements of the Parent; and

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(7) “$,” “U.S. Dollars” and “United States Dollars” each refer to United States dollars, or such other money of the United States that at the time of payment is legal tender for payment of public and private debts.

ARTICLE TWO

THE NOTES

SECTION 2.01. Amount of Notes.

The Trustee shall authenticate Initial Notes for original issue on the Initial Issue Date in the aggregate principal amount not to exceed $107,040,000. The Officers’ Certificate shall specify the amount of Notes to be authenticated, the date on which the Notes are to be authenticated, and the names and delivery instructions for each Holder of the Notes.

In addition, as a result of any PIK Payment, the Issuer shall be entitled to, without the consent of the Holders and without regard to Section 4.06 hereof, issue PIK Notes or in lieu of issuing such PIK Notes, increase the outstanding principal amount of the Notes held in the form of global notes. The Initial Notes and any PIK Notes subsequently issued under this Indenture will be treated as a single class for all purposes under this Indenture, including waivers, amendments, redemptions and offers to purchase.

Upon receipt of a written order of the Issuer in the form of an Officers’ Certificate, the Trustee shall authenticate Notes in substitution for Notes originally issued to reflect any name change of the Issuer.

SECTION 2.02. Form and Dating.

The Notes and the Trustee’s certificate of authentication with respect thereto shall be substantially in the form set forth in Exhibit A, which is incorporated in and forms a part of this Indenture. The Notes may have notations, legends or endorsements required by law, rule or usage to which the Issuer is subject. Each Note shall be dated the date of its authentication.

The terms and provisions contained in the Notes shall constitute, and are expressly made, a part of this Indenture and, to the extent applicable, the Issuer, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and agree to be bound thereby.

The Notes may be presented for registration of transfer and exchange at the offices of the Registrar.

SECTION 2.03. Execution and Authentication.

Two Officers shall sign, or one Officer shall sign and one Officer (each of whom shall, in each case, have been duly authorized by all requisite corporate actions) shall attest to, the Notes for the Issuer by manual or facsimile signature.

If an Officer whose signature is on a Note was an Officer at the time of such execution but no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.

With respect to a PIK Payment, no later than five business days prior to the relevant Interest Payment Date, the Issuer shall deliver to the Trustee, with respect to Global Notes, an Issuer Request to increase the outstanding principal amount of such Notes by the required amount of PIK Interest (rounded up to the nearest whole dollar) (or, if necessary, pursuant to the requirements of the Depositary or otherwise, an Issuer Request to authenticate and deliver new Global Notes). The Trustee shall, on the relevant Interest Payment Date, and in accordance with an Issuer Request, make appropriate amendments to the schedule of principal amounts of such Global Notes or, if applicable, authenticate and deliver PIK Notes provided to it.

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Each PIK Payment shall be made pro rata with respect to the outstanding Notes, and the Issuer shall have the right to aggregate amounts of interest payable in the form of PIK Notes to a Holder of outstanding Notes and issue to such Holder a single PIK Note in payment thereof.

The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to authenticate the Notes. Unless otherwise provided in the appointment, an authenticating agent may authenticate the Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Issuer and Affiliates of the Issuer. Each Paying Agent is designated as an authenticating agent for purposes of this Indenture.

The Notes shall be issuable only in registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000.

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature of an authorized officer, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Note shall have been authenticated and delivered hereunder but never issued and sold by the Issuer, and the Issuer shall deliver such Note to the Trustee for cancellation as provided in Section 2.12, for all purposes of this Indenture such Note shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

SECTION 2.04. Registrar and Paying Agent.

The Issuer shall maintain an office or agency (which shall be located in the Borough of Manhattan in The City of New York, State of New York) where Notes may be presented for registration of transfer or for exchange (the “Registrar”), and an office or agency where Notes may be presented for payment (the “Paying Agent”) and an office or agency where notices and demands to or upon the Issuer, if any, in respect of the Notes and this Indenture may be served. The Registrar shall keep a register of the names and addresses of the Holders and of the principal amount of the Notes (and stated interest therein) and of their transfer and exchange. The entries in the register shall be conclusive and binding for all purposes absent manifest error. The Issuer, the Paying Agent and the Holder shall treat each Person whose name is recorded in the Register as a Holder hereunder for all purposes of this Indenture, including, without limitation, the right to receive payments of Principal and Interest hereunder, notwithstanding notice to the contrary. If and for so long as the Trustee is not the Registrar, the Trustee shall have the right to inspect the register of the Notes during regular business hours. The Issuer may have one or more additional Paying Agents. The term “Paying Agent” includes any additional Paying Agent. Neither the Issuer nor any Affiliate thereof may act as Paying Agent.

The Issuer shall enter into an appropriate agency agreement, which shall incorporate the provisions of the TIA, with any Agent that is not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Issuer shall notify the Trustee of the name and address of any such Agent. If the Issuer fails to maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as such and shall be entitled to appropriate compensation in accordance with Section 7.07. The Issuer or any wholly owned Subsidiary may act as Paying Agent, Registrar, co-registrar or transfer agent.

The Issuer initially appoints the Trustee as Registrar, Paying Agent and Agent for service of notices and demands in connection with the Notes and this Indenture.

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SECTION 2.05. Paying Agent To Hold Money in Trust.

Prior to each due date of the principal or interest on any Notes, the Issuer shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due. Each Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal of or premium or interest on the Notes (whether such money has been paid to it by the Issuer or any other obligor on the Notes or the Guarantors), and the Issuer and the Paying Agent shall notify the Trustee in writing of any default by the Issuer (or any other obligor on the Notes) in making any such payment. Money held in trust by the Paying Agent need not be segregated except as required by law and in no event shall the Paying Agent be liable for any interest on any money received by it hereunder. The Issuer at any time may require the Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed and the Trustee may at any time during the continuance of any Event of Default specified in Section 6.01(1) or (2), upon written request to the Paying Agent, require such Paying Agent to pay forthwith all money so held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon making such payment, the Paying Agent shall have no further liability for the money delivered to the Trustee.

SECTION 2.06. Holder Lists.

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of the Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least five Business Days before each Interest Payment Date, and at such other times as the Trustee may reasonably request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders.

SECTION 2.07. Transfer and Exchange.

Subject to Section 2.16, when Notes are presented to the Registrar with a request from the Holder of such Notes to register a transfer or to exchange them for an equal principal amount of Notes of other authorized denominations, the Registrar shall register the transfer as requested if the requirements of this Indenture are met. Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or his attorneys duly authorized in writing. To permit registrations of transfers and exchanges, the Issuer shall issue and execute and the Trustee shall authenticate new Notes (and the Guarantors shall execute the guarantee thereon) evidencing such transfer or exchange at the Registrar’s request. No service charge shall be made to the Holder for any registration of transfer or exchange. The Issuer may require from the Holder payment of a sum sufficient to cover any transfer taxes or other governmental charge that may be imposed in relation to a transfer or exchange, but this provision shall not apply to any exchange pursuant to Section 2.11, 3.06, 4.09 or 8.05 (in which events the Issuer shall be responsible for the payment of such taxes). The Registrar shall not be required to exchange or register a transfer of any Note for a period of 15 days immediately preceding the mailing of notice of redemption of Notes to be redeemed or of any Note selected, called or being called for redemption except the unredeemed portion of any Note being redeemed in part.

Any Holder of a Global Note shall, by acceptance of such Global Note, agree that transfers of the beneficial interests in such Global Note may be effected only through a book entry system maintained by the Holder of such Global Note (or its agent), and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry.

Each Holder of a Note agrees to indemnify the Issuer and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder’s Note in violation of any provision of this Indenture and/or applicable U.S. Federal or state securities law.

Except as expressly provided herein, neither the Trustee nor the Registrar shall have any duty to monitor the Issuer’s compliance with or have any responsibility with respect to the Issuer’s compliance with any Federal or state securities laws.

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SECTION 2.08. Replacement Notes.

If a mutilated Note is surrendered to the Registrar or the Trustee, or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Note (and the Guarantors shall execute the guarantee thereon) if the Holder of such Note furnishes to the Issuer and the Trustee evidence reasonably acceptable to them of the ownership and the destruction, loss or theft of such Note and if the requirements of Section 8-405 of the New York Uniform Commercial Code as in effect on the date of this Indenture are met. If required by the Trustee or the Issuer, an indemnity bond shall be posted by such Holder, sufficient in the judgment of both to protect the Issuer, the Guarantors, the Trustee or any Paying Agent from any loss that any of them may suffer if such Note is replaced. The Issuer and the Trustee may charge such Holder for their out of pocket expenses in replacing such Note (including, without limitation, attorneys’ fees and disbursements). Every replacement Note shall constitute a contractual obligation of the Issuer.

SECTION 2.09. Outstanding Notes.

The Notes outstanding at any time are all Notes that have been authenticated by the Trustee except for (a) those cancelled by it, (b) those delivered to it for cancellation, (c) to the extent set forth in Sections 9.01 and 9.02, on or after the date on which the conditions set forth in Section 9.01 or 9.02 have been satisfied, those Notes theretofore authenticated and delivered by the Trustee hereunder and (d) those described in this Section 2.09 as not outstanding. Subject to Section 2.10, a Note does not cease to be outstanding because the Issuer or one of its Affiliates holds the Note.

If a Note is replaced pursuant to Section 2.08, it ceases to be outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Note is held by a bona fide purchaser in whose hands such Note is a legal, valid and binding obligation of the Issuer.

If the Paying Agent segregates and holds in trust, in its capacity as such, on any redemption date or maturity date, money sufficient to pay all accrued interest and principal with respect to the Notes payable on that date and is not prohibited from paying such money to the Holders thereof pursuant to the terms of this Indenture, then on and after that date such Notes cease to be outstanding and interest on them ceases to accrue.

SECTION 2.10. Treasury Notes.

In determining whether the Holders of the required principal amount of Notes have concurred in any declaration of acceleration or notice of default or direction, waiver or consent or any amendment, modification or other change to this Indenture, Notes (other than the Original Notes) owned by the Issuer or any other Affiliate of the Issuer shall be disregarded as though they were not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent or any amendment, modification or other change to this Indenture, only Notes as to which a Responsible Officer of the Trustee has received an Officers’ Certificate stating that such Notes are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee established to the satisfaction of the Trustee the pledgee’s right so to act with respect to the Notes and that the pledgee is not the Issuer, a Guarantor, any other obligor on the Notes or any of their respective Affiliates.

SECTION 2.11. Temporary Notes.

Until definitive Notes are prepared and ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Issuer considers appropriate for temporary Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes. Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as definitive Notes.

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SECTION 2.12. Cancellation.

The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall (subject to the record-retention requirements of the Exchange Act) dispose of such cancelled Notes in its customary manner. The Trustee shall deliver a certificate of such disposal to the Issuer upon its request therefor. The Issuer may not reissue or resell, or issue new Notes to replace, Notes that the Issuer has redeemed or paid, or that have been delivered to the Trustee for cancellation.

SECTION 2.13. Defaulted Interest.

If the Issuer defaults on a payment of interest on the Notes, whether in the form of PIK Interest or otherwise, it shall pay the defaulted interest, plus (to the extent permitted by law) any interest payable on the defaulted interest, in accordance with the terms hereof, to the Persons who are Holders on a subsequent special record date, which date shall be at least five Business Days prior to the payment date. The Issuer shall fix such special record date and payment date in a manner satisfactory to the Trustee. The Issuer shall promptly mail to each Holder a notice that states the special record date, the payment date and the amount of defaulted interest, and interest payable on defaulted interest, if any, to be paid. The Issuer may make payment of any defaulted interest in any other lawful manner not inconsistent with the requirements (if applicable) of any securities exchange on which the Notes may be listed and, upon such notice as may be required by such exchange, if, after written notice given by the Issuer to the Trustee of the proposed payment pursuant to this sentence, such manner of payment shall be deemed practicable by the Trustee.

SECTION 2.14. CUSIP Number.

The Issuer in issuing the Notes may use a “CUSIP” number, ISIN and “Common Code” number (in each case if then generally in use), and if so, such CUSIP number, ISIN and Common Code number shall be included in notices of redemption or exchange as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness or accuracy of such number either as printed in the notice or on the Notes, and that reliance may be placed only on the other identification numbers printed on the Notes. The Issuer shall promptly notify, and in any event within 10 Business Days, the Trustee of any such CUSIP number, ISIN and Common Code number used by the Issuer in connection with the issuance of the Notes and of any change in the CUSIP number, ISIN and Common Code number.

SECTION 2.15. Deposit of Moneys.

Prior to 10:00 a.m., New York City time, on each Interest Payment Date and maturity date, the Issuer shall have deposited with the Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such Interest Payment Date or maturity date, as the case may be, in a timely manner which permits the Trustee to remit payment to the Holders on such Interest Payment Date or maturity date, as the case may be. The principal and interest on Global Notes shall be payable to the Depository or its nominee, as the case may be, as the sole registered owner and the sole holder of the Global Notes represented thereby. The principal and interest on Physical Notes shall be payable, either in person or by mail, at the office of the Paying Agent.

SECTION 2.16. Book-Entry Provisions for Global Notes.

(a) The global notes representing Notes (the “Global Notes”) shall bear legends as set forth in Exhibit B. The Global Notes initially shall (i) be registered in the name of the Depository or the nominee of such Depository, in each case for credit to an account of an Agent Member (as defined below), and (ii) be delivered to the Trustee as custodian for such Depository.

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Members of, or direct or indirect participants in, the Depository (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository, or the Trustee as its custodian, or under the Global Notes, and the Depository may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of the Global Notes for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.

(b) Transfers of Global Notes shall be limited to transfer in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in the Global Notes may be transferred or exchanged for Physical Notes in accordance with the rules and procedures of the Depository. In addition, a Global Note shall be exchangeable for Physical Notes if (i) the Depository (x) notifies the Issuer that it is unwilling or unable to continue as depository for such Global Note and the Issuer thereupon fails to appoint a successor depository within 90 days thereof or (y) has ceased to be a clearing agency registered under the Exchange Act and the Issuer thereupon fails to appoint a successor depository within 90 days thereof or (ii) there shall have occurred and be continuing an Event of Default with respect to the Notes. In all cases, Physical Notes delivered in exchange for any Global Note or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depository (in accordance with its customary procedures).

(c) In connection with any transfer or exchange of a portion of the beneficial interest in any Global Note to beneficial owners pursuant to paragraph (b), the Registrar shall (if one or more Physical Notes are to be issued) reflect on its books and records the date and a decrease in the principal amount of the Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred, and the Issuer shall execute, and the Trustee shall upon receipt of a written order from the Issuer authenticate and make available for delivery, one or more Physical Notes of like tenor and amount.

(d) In connection with the transfer of Global Notes as an entirety to beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed to be surrendered to the Trustee for cancellation, and the Issuer shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depository in writing in exchange for its beneficial interest in the Global Notes, an equal aggregate principal amount of Physical Notes of authorized denominations.

(e) [Intentionally Left Blank]

(f) [Intentionally Left Blank]

(g) [Intentionally Left Blank]

(h) Any beneficial interest in one of the Global Notes that is transferred to a Person who takes delivery in the form of an interest in another Global Note shall, upon transfer, cease to be an interest in such Global Note and become an interest in such other Global Note and, accordingly, shall thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest.

(i) The Holder of any Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

(j) None of the Issuer or the Trustee nor any agent of the Issuer or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Note or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

The Registrar shall retain for a period of two years copies of all letters, notices and other written communications received pursuant to this Section 2.16. The Issuer shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable notice to the Registrar.

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SECTION 2.17. Computation of Interest.

Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.

SECTION 2.18. Conditions Precedent.

The issuance of Notes under this Indenture (excluding any PIK Notes and any increase in the principal amount of Notes as a result of a PIK Payment) is subject to the satisfaction, prior to or concurrently with the entering into of this Indenture on the Effective Date, of the following conditions precedent:

(1) Indenture; Note Documents. The Trustee shall have received (i) this Indenture, executed and delivered by the Trustee and the Issuer and the Guarantors, (ii) Ancillary Indenture Documents, (iii) the Security Agreement, executed and delivered by the Issuer and each applicable Guarantor, (iv) all other Security Documents reasonably requested by the Holders, including without limitation, any pledge agreements required under any local law jurisdiction and any mortgages, (v) appropriate financing statements on Form UCC 1 duly filed in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests purported to be created by each Security Document, (vi) customary and reasonable opinions and (vii) any other agreement, instrument or document reasonably required or advisable to carry out the purposes of this Indenture or the Security Documents or to establish or maintain the validity, perfection or priority of the Liens of the Collateral Agent in the Collateral.

(2) Reorganization Plan. The Effective Date as defined in the Reorganization Plan shall have occurred (the Reorganization Plan on such date is hereinafter referred to as the “Effective Reorganization Plan”).

(3) Confirmation Order. The Trustee shall have received a copy of the Confirmation Order, certified by an Officer of the Issuer to be a true, complete and correct copy of such document, which shall approve and authorize the transactions contemplated by this Indenture, the Security Documents and the Reorganization Plan and otherwise not be inconsistent with the provisions hereof and thereof.

(4) Qualification under the Trust Indenture Act. The Issuer shall have filed a Form T-3 with the SEC for qualification of this Indenture under the Trust Indenture Act of 1939, as amended, and such Form T-3 shall be effective.

ARTICLE THREE

REDEMPTION

SECTION 3.01. Election To Redeem; Notices to Trustee.

If the Issuer elects to redeem Notes pursuant to paragraph 7 of the Notes, at least 45 days prior to the Redemption Date (unless a shorter notice shall be agreed to in writing by the Trustee), the Issuer shall notify the Trustee in writing of the Redemption Date, the principal amount of Notes to be redeemed and the Redemption Price, and deliver to the Trustee an Officers’ Certificate stating that such redemption will comply with the conditions contained in paragraph 7 of the Notes. Notice given to the Trustee pursuant to this Section 3.01 may not be revoked after the time that notice is given to Holders pursuant to Section 3.03. At any time after the Initial Issue Date, all or any of the Notes may be redeemed from time to time at the Redemption Price.

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SECTION 3.02. Selection by Trustee of Notes To Be Redeemed.

In the event that less than all of the Notes are to be redeemed pursuant to a redemption made pursuant to paragraph 7 of the Notes, selection of the Notes for redemption shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not then listed on a national security exchange, on a pro rata basis, by lot; provided, however, that no Notes of a principal amount of $2,000 or less shall be redeemed in part. If a partial redemption is made pursuant to the second paragraph of paragraph 7 of the Notes, selection of the Notes or portions thereof for redemption shall be made by the Trustee only on a pro rata basis or on as nearly a pro rata basis as is practicable (subject to the procedures of the Depository), unless that method is otherwise prohibited. The Trustee shall promptly notify the Issuer of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed. The Trustee may select for redemption portions of the principal of the Notes that have denominations larger than $2,000. For all purposes of this Indenture unless the context otherwise requires, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Issuer may acquire Notes by means other than redemption, whether pursuant to an Issuer tender offer, open market purchase or otherwise, provided such acquisition does not otherwise violate the other terms of this Indenture.

SECTION 3.03. Notice of Redemption.

At least 30 days, and no more than 60 days, before a Redemption Date, the Issuer shall mail, or cause to be mailed, a notice of redemption by first-class mail to each Holder of Notes to be redeemed at his or her last address as the same appears on the registry books maintained by the Registrar pursuant to Section 2.04, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a satisfaction and discharge of this Indenture. If the Issuer mails such notice to Holders, it shall mail a copy of such notice to the Trustee at the same time.

The notice shall identify the Notes to be redeemed (including the CUSIP numbers ISIN and Common Code numbers, if any thereof) and shall state:

(1) the Redemption Date;

(2) the Redemption Price (or the manner of calculation of the Redemption Price);

(3) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date and upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued;

(4) the name and address of the Paying Agent;

(5) that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price;

(6) that unless the Issuer defaults in making the redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;

(7) the provision of paragraph 7 of the Notes, as the case may be, pursuant to which the Notes called for redemption are being redeemed; and

(8) the aggregate principal amount of Notes that are being redeemed.

At the Issuer’s written request made at least ten Business Days prior to the date on which notice is to be given, the Trustee shall give the notice of redemption prepared by the Issuer, in the Issuer’s name and at the Issuer’s sole expense. In such event, the Issuer shall provide the Trustee with the information required by this Section 3.03.

SECTION 3.04. Effect of Notice of Redemption.

Once the notice of redemption described in Section 3.03 is mailed, Notes called for redemption become due and payable on the Redemption Date and at the Redemption Price. Upon surrender to the Paying Agent, such Notes shall be paid at the Redemption Price, provided that if the Redemption Date

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is after a regular record date and on or prior to the Interest Payment Date, the accrued interest shall be payable to the Holder of the redeemed Notes registered on the relevant record date, and provided, further, that if a Redemption Date is a Legal Holiday, payment shall be made on the next succeeding Business Day and no interest shall accrue for the period from such Redemption Date to such succeeding Business Day. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.

SECTION 3.05. Deposit of Redemption Price.

On or prior to 10:00 A.M., New York City time, on each Redemption Date, the Issuer shall deposit with the Paying Agent in immediately available funds money sufficient to pay the Redemption Price of all Notes to be redeemed on that date other than Notes or portions thereof called for redemption on that date which have been delivered by the Issuer to the Trustee for cancellation. Promptly after the calculation of the Redemption Price, the Issuer will give the Trustee and any Paying Agent written notice thereof.

On and after any Redemption Date, if money sufficient to pay the Redemption Price of Notes called for redemption shall have been made available in accordance with the preceding paragraph, the Notes called for redemption will cease to accrue interest and the only right of the Holders of such Notes will be to receive payment of the Redemption Price of and, subject to the first proviso in Section 3.04, accrued and unpaid interest on such Notes to the Redemption Date. If any Note surrendered for redemption shall not be so paid, interest will be paid, from the Redemption Date until such redemption payment is made, on the unpaid principal of the Note and any interest not paid on such unpaid principal, in each case, at the rate and in the manner provided in the Notes.

SECTION 3.06. Notes Redeemed in Part.

Upon surrender of a Note that is redeemed in part, the Issuer shall execute and the Trustee shall authenticate for the Holder thereof a new Note equal in principal amount to the unredeemed portion of the Note surrendered.

ARTICLE FOUR

COVENANTS

SECTION 4.01. Payment of Notes.

The Issuer shall pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and this Indenture. An installment of principal or interest shall be considered paid on the date it is due if the Trustee or Paying Agent holds on that date money designated for and sufficient to pay such installment.

The Issuer shall pay interest on overdue principal (including post-petition interest in a proceeding under any Bankruptcy Law), and overdue interest, to the extent lawful, at the rate specified in the Notes.

If a Holder fails to provide the Trustee and the Issuer with appropriate tax certifications providing an exemption from the applicable withholding tax (which, in respect of United States federal income tax laws, includes (i) an Internal Revenue Service Form W-9 for U.S. persons or its successor form, or (ii) an appropriate Internal Revenue Service Form W-8 for non-U.S. persons or the applicable successor form), the Issuer shall be entitled to withhold an amount from interest and/or principal payments to be made to such Holder pursuant to this Section 4.01 that equals the applicable withholding tax. Any installment of principal or interest due pursuant to this Section 4.01 shall be considered fully paid even if such amount is withheld from the installment otherwise due to such Holder.

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SECTION 4.02. Reports.

(a) Whether or not required by the SEC, from and after the Restatement Date and so long as any Notes are outstanding, the Parent will file with the SEC (unless the SEC will not accept such a filing) within the time periods specified in the SEC’s rules and regulations, and unless already publicly available on the SEC’s EDGAR filing system, and the Parent (a) will furnish (without exhibits) to the Trustee for delivery to the Holders of Notes and (b) post on its website or otherwise make available to prospective purchasers of the Notes:

(1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Parent were required to file such forms, including a “Management’s discussion and analysis of financial condition and results of operations” and, with respect to the annual information only, a report on the annual financial statements by the Parent’s independent auditors; and

(2) all current reports that would be required to be filed with the SEC on Form 8-K if the Parent were required to file such reports.

(b) From and after the Restatement Date, so long as any Notes remain outstanding, the Parent shall furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

SECTION 4.03. Waiver of Stay, Extension or Usury Laws.

Each of the Issuer and the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, or plead (as a defense or otherwise) or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law which would prohibit or forgive any of the Issuer and the Guarantors from paying all or any portion of the principal of, premium, if any, and/or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that they may lawfully do so) each of the Issuer and the Guarantors hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

SECTION 4.04. Compliance Certificate; Notice of Default.

(a) The Issuer or the Parent shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Parent and its Subsidiaries during such fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Issuer and the Guarantors have kept, observed, performed and fulfilled their obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge, the Issuer and the Guarantors have kept, observed, performed and fulfilled each and every covenant contained in this Indenture and are not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default shall have occurred, describing all such Defaults of which he or she may have knowledge and what action they are taking or propose to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Issuer and the Guarantors are taking or propose to take with respect thereto.

(b) The Issuer shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default, an Officers’ Certificate specifying such Default and what action the Issuer and the Guarantors are taking or propose to take with respect thereto.

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(c) The Issuer’s fiscal year currently ends on December 31. The Issuer shall provide written notice to the Trustee of any change in its fiscal year. Failure to provide any such Notice will not constitute a Default under this Indenture.

SECTION 4.05. Taxes.

The Issuer and the Guarantors shall, and shall cause each of their Subsidiaries to, pay prior to delinquency all material Taxes except as contested in good faith and by appropriate proceedings.

SECTION 4.06. Limitations on Additional Indebtedness.

The Parent shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, Incur any Indebtedness.

Notwithstanding the above, each of the following, which shall be given independent effect in whole or in part, shall be permitted (the “Permitted Indebtedness”):

(1) the Initial Notes, the PIK Notes and the Note Guarantees in respect thereof (including any future Note Guarantee);

(2) Indebtedness of the Parent and the Restricted Subsidiaries to the extent outstanding on the Initial Issue Date and listed on Schedule 4.06 hereto;

(3) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes of the Parent or any Restricted Subsidiary not for the purpose of speculation; provided that the notional principal amount of such Hedging Obligations at the time incurred does not exceed the principal amount of the Indebtedness to which such Hedging Obligations relate;

(4) Indebtedness of (i) the Issuer or Guarantor owed to the Parent or any Restricted Subsidiary and (ii) any Restricted Subsidiary that is not a Guarantor or the Issuer owed to any other Restricted Subsidiary that is not a Guarantor or the Issuer; provided, however, that upon any such Restricted Subsidiary ceasing to be a Restricted Subsidiary referred to in clauses (i) or such Indebtedness being owed to any Person other than the Parent or any Restricted Subsidiary, as applicable, such Restricted Subsidiary shall be deemed to have incurred Indebtedness not permitted by this clause (4);

(5) (a) Indebtedness in respect of bid, performance, completion, guarantee, surety and similar bonds and assurances issued for the account of the Parent or any Restricted Subsidiary in the ordinary course of business, including guarantees or obligations (i) of the Parent or any Restricted Subsidiary with respect to letters of credit supporting such bid, performance, completion, guarantee or surety obligations (in each case other than for an obligation for money borrowed) of the Issuer or any Guarantor or (ii) of any Restricted Subsidiary that is not a Guarantor or the Issuer with respect to letters of credit supporting such bid, performance, completion, guarantee or surety obligations (in each case other than for an obligation for money borrowed) of another Restricted Subsidiary that is not a Guarantor or the Issuer; and (b) Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business in respect of (i) workers’ compensation claims or self-insurance, (ii) other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance or (iii) for regulatory or insurance purposes;

(6) Purchase Money Indebtedness and/or Attributable Indebtedness, in an aggregate amount not to exceed $5,000,000 at any time outstanding;

(7) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds; provided, however, that such Indebtedness is extinguished within five Business Days;

(8) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

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(9) Indemnification, adjustment of purchase price, earn-out or similar obligations, in each case incurred or assumed in connection with the acquisition or disposition of any business or assets of the Parent or any Restricted Subsidiary or the acquisition, disposition, issuance or redemption of Equity Interests of the Parent or a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests for the purpose of financing or in contemplation of any such acquisition; provided that in the case of a disposition, the maximum aggregate liability in respect of all such obligations outstanding under this clause (9) shall at no time exceed the gross proceeds or value of the consideration actually received by the Parent and the Restricted Subsidiaries in connection with such disposition;

(10) Indebtedness incurred by Issuer or any Guarantor pursuant to the Working Capital Facility; provided, however, that after giving effect to the incurrence, the aggregate principal amount of outstanding Indebtedness incurred thereunder plus all commitments thereunder (without duplication) does not exceed $40.0 million (less the sum of all principal payments required to be made with respect to such Indebtedness pursuant to the fourth paragraph of Section 4.09);

(11) Indebtedness of the Foreign Subsidiaries of the Parent owed to parties other than the Restricted Subsidiaries or the Guarantors, not to exceed any time outstanding an aggregate principal amount of $15,000,000; and

(12) Acquired Indebtedness, not to exceed at any time outstanding an aggregate principal amount of $7,500,000; provided such Indebtedness was incurred in connection with acquisitions permitted under clauses 11 or 13 of the definition of “Permitted Investments” or Section 4.08(a).

For purposes of determining compliance with this Section 4.06, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (12) above the Issuer shall, in its sole discretion, classify such item of Indebtedness and may divide and classify such Indebtedness in more than one of the types of Indebtedness described, and may later reclassify any item of Indebtedness as having been Incurred pursuant to any of clauses (1) through (12) above (provided that at the time of reclassification it meets the criteria in such category or categories).

SECTION 4.07. Excess Working Capital Proceeds Purchase Offer.

(a) If the aggregate principal amount of outstanding Indebtedness plus commitments (without duplication) under the Working Capital Facility exceeds $20.0 million (such excess, the “Excess Working Capital Proceeds”), the Parent or the Issuer shall make an Offer to Purchase to all Holders in an aggregate principal amount of Notes equal to the amount of such Excess Working Capital Proceeds up to but not to exceed $20.0 million as follows:

(1) the Parent or the Issuer shall make an Offer to Purchase (a “Working Capital Facility Offer”) to all Holders, in accordance with the procedures set forth in this Indenture, in a maximum principal amount of Notes that may be redeemed out of the amount (the “Working Capital Facility Payment Amount”) of such Excess Working Capital Proceeds and each Holder may tender, in accordance with the procedures set forth in this Indenture, a principal amount of Notes up to the Working Capital Facility Payment Amount;

(2) the offer price for the Notes shall be payable in cash in an amount equal to 100% of the principal amount of the Notes tendered pursuant to a Working Capital Facility Offer, plus accrued and unpaid interest thereon, if any, to, but not including, the date such Working Capital Facility Offer is consummated (the “Working Capital Facility Offered Price”), in accordance with the procedures set forth in this Indenture;

(3) if the aggregate Working Capital Facility Offered Price of Notes validly tendered and not withdrawn by Holders thereof exceeds the Working Capital Facility Payment Amount, Notes to be purchased shall be purchased on a pro rata basis based on the percentage of the aggregate principal outstanding amount of Notes held by each such Holder to the total aggregate principal amount of Notes tendered by all Holders pursuant to the terms hereof; and

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(4) upon completion of such Working Capital Facility Offer in accordance with the foregoing provisions, the amount of Excess Working Capital Proceeds with respect to which such Working Capital Facility Offer was made shall be deemed to be zero.

(b) To the extent that the sum of the aggregate Working Capital Facility Offered Price of Notes tendered pursuant to a Working Capital Facility Offer is less than the Working Capital Facility Payment Amount relating thereto (such shortfall constituting a “Working Capital Facility Excess”), the Parent or the Issuer may use the Working Capital Facility Excess, or a portion thereof, for general corporate purposes, subject to the provisions of this Indenture.

(c) The Parent and the Issuer, as applicable shall comply with applicable tender offer rules, including, if applicable, the requirements of Rule 14e-1 under the Exchange Act and any other applicable laws and regulations in connection with the purchase of Notes pursuant to a Working Capital Facility Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.07(c), Parent and the Issuer, as applicable shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.07(c) by virtue of this compliance. The Parent’s and the Issuer’s obligation to make a Working Capital Facility Offer shall be satisfied if a third party makes the offer in the manner and at the times otherwise in compliance with the requirements herein.

SECTION 4.08. Limitations on Restricted Payments.

(a) The Parent shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, make any Restricted Payment if at the time of such Restricted Payment:

(1) a Default shall have occurred and be continuing or shall occur as a consequence thereof;

(2) the amount of such Restricted Payment (the amount so expended, if other than in cash, to be determined in good faith by the Board of Directors), when added to the aggregate amount of all other Restricted Payments made after the Initial Issue Date (other than Restricted Payments made pursuant to clauses (2), (3) or (4) of Section 4.08(b)), shall exceed $2.5 million (the “Restricted Payments Basket”).

(b) The foregoing provisions, which shall be given independent effect in whole or in part, shall not prohibit:

(1) the payment by the Parent or any Restricted Subsidiary of any dividend within 60 days after the date of declaration thereof, if on the date of declaration the payment would have complied with the provisions of this Indenture;

(2) the redemption of any Equity Interests of the Parent or any Restricted Subsidiary in exchange for, or out of the proceeds of the substantially concurrent issuance and sale of, Qualified Equity Interests or of a substantially concurrent capital contribution to the Parent; provided that any proceeds from the issuance and sale of such Qualified Equity Interests shall be excluded from the calculation of the Restricted Payments Basket;

(3) the redemption of Subordinated Indebtedness of the Parent or any Restricted Subsidiary (a) in exchange for, or out of the proceeds of the substantially concurrent issuance and sale of, Qualified Equity Interests, (b) in exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted to be incurred under Section 4.06 and the other terms of this Indenture or (c) in connection with an Asset Sale to the extent required by the agreement governing such Subordinated Indebtedness, but only if the Parent or the Issuer shall have complied with Section 4.09 and purchased all Notes validly tendered pursuant to the relevant offer prior to redeeming such Subordinated Indebtedness; provided that any proceeds from the issuance and sale of such Qualified Equity Interests shall be excluded from the calculation of the Restricted Payments Basket;

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(4) repurchases of Equity Interests deemed to occur upon the exercise of stock options, warrants and other similar rights to acquire Equity Interests if the Equity Interests represent a portion of the exercise price thereof,;

(5) payments to holders of fractional common shares of the Parent resulting from a reverse stock split or a stock consolidation of the common shares of the Parent; or

(6) payments on the Shareholder Claim in a manner consistent with the Effective Reorganization Plan.

SECTION 4.09. Limitations on Asset Sales.

The Parent shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale unless:

(1) the Parent or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets included in such Asset Sale; and

(2) at least 80% of the total consideration in such Asset Sale consists of cash or Cash Equivalents.

For purposes of clause (2), the following shall be deemed to be cash.

(a) the amount (without duplication) of any Indebtedness (other than Subordinated Indebtedness), accounts payable and accrued expenses of the Parent or such Restricted Subsidiary that is expressly assumed by the transferee in such Asset Sale and, in the case of any such Indebtedness, with respect to which the Parent or such Restricted Subsidiary, as the case may be, is unconditionally released by the holder of such Indebtedness, and, in the case of any such accounts payable and accrued expenses, that are paid in full, satisfied or discharged within 90 days of such assumption;

(b) the amount of any notes, obligations or securities received from such transferee that are within 90 days converted by the Parent or such Restricted Subsidiary to cash (to the extent of the cash actually so received); and

(c) the Fair Market Value of (i) any fixed assets (other than securities) received by the Parent or any Restricted Subsidiary to be used by it in a Permitted Business, (ii) Qualified Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall become a Restricted Subsidiary immediately upon the acquisition of such Person by the Parent or a Restricted Subsidiary or (iii) a combination of (i) and (ii); provided that if the assets that were the subject of such Asset Sale constituted Collateral, then such additional assets shall be pledged at the time of their acquisition to the Collateral Agent as Collateral for the benefit of the Holders, subject to Permitted Liens and the terms of the Security Documents.

If at any time any non-cash consideration received by the Parent or any Restricted Subsidiary, as the case may be, in connection with any Asset Sale is repaid or converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then the date of such repayment, conversion or disposition shall be deemed to constitute the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be applied in accordance with this Section 4.09.

If the Parent or any Restricted Subsidiary engages in an Asset Sale (other than a sale of Auction Rate Securities), the Parent or such Restricted Subsidiary shall, no later than 365 days following the consummation thereof, (i) with respect to all Asset Sales consummated through a Sale Leaseback Transaction or the sale of real property or improvements thereon (collectively, “Real Estate Sales’”), apply up to 50% of the first $10 million of Net Available Proceeds therefrom and 20% of any remaining Net Available Proceeds in excess of $10 million therefrom and (ii) in all other Asset Sales (“Non Real Estate Sales”) apply up to 20% of the Net Available Proceeds therefrom, in excess of $2.5 million, in the aggregate in any fiscal year (A) to invest (or enter into a definitive agreement to invest) such part of the Net Available Proceeds thereof in fixed assets to be used by the Parent or any Restricted Subsidiary in a Permitted Business, (B) to pay interest expense, operating expense or otherwise fund operations, (C) for capital expenditures, or (D) for a combination of (A), (B) and (C).

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To the extent Net Available Proceeds consist of proceeds from the sale of accounts receivable or inventory of the Parent or any Restricted Subsidiary, the Parent or the Restricted Subsidiary, as applicable, may apply such proceeds required to be paid (to the extent actually paid) under the Working Capital Facility arising as a result of such Asset Sale to satisfy all mandatory repayment obligations in respect of Indebtedness made thereunder supported by a borrowing base composed of accounts receivable and/or inventory, provided that, in the case of any such repayment under the Working Capital Facility, such payment shall result in a permanent reduction in the availability and/or commitments under the Working Capital Facility.

The amount of Net Available Proceeds not applied or invested as provided in this paragraph for Asset Sales will constitute “Excess Proceeds.”

The Parent or the Issuer shall make an Offer to Purchase from all Holders, in an aggregate principal amount of Notes equal to the amount of such Excess Proceeds as follows:

(1) the Parent or the Issuer shall make an Offer to Purchase (a “Net Proceeds Offer”) to all Holders in accordance with the procedures set forth in this Indenture the maximum principal amount of Notes that may be redeemed out of the amount (the “Payment Amount”) of such Excess Proceeds and each Holder may tender, in accordance with the procedures set forth in this Indenture, a principal amount of Notes up to the Payment Amount;

(2) the offer price for the Notes shall be payable in cash in an amount equal to 100% of the principal amount of the Notes tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid interest thereon, if any, to, but not including, the date such Net Proceeds Offer is consummated (the “Offered Price”), in accordance with the procedures set forth in this Indenture;

(3) if the aggregate Offered Price of Notes validly tendered and not withdrawn by Holders thereof exceeds the Payment Amount, Notes to be purchased shall be purchased on a pro rata basis based on the percentage of the aggregate principal outstanding amount of Notes held by such Holder to the total aggregate principal amount of Notes tendered by all Holders pursuant to the terms hereof; and

(4) upon completion of such Net Proceeds Offer in accordance with the foregoing provisions, the amount of Excess Proceeds with respect to which such Net Proceeds Offer was made shall be deemed to be zero.

To the extent that the sum of the aggregate Offered Price of Notes tendered pursuant to a Net Proceeds Offer is less than the Payment Amount relating thereto (such shortfall constituting a “Net Proceeds Excess”), the Parent or the Issuer may use the Net Proceeds Excess, or a portion thereof, for general corporate purposes, subject to the provisions of this Indenture.

The Parent and the Issuer shall comply with applicable tender offer rules, including, if applicable, the requirements of Rule 14e-1 under the Exchange Act and any other applicable laws and regulations in connection with the purchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.09, the Parent and the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.09 by virtue of this compliance. The Parent’s and the Issuer’s obligation to make a Net Proceeds Offer shall be satisfied if a third party makes the offer in the manner and at the times otherwise in compliance with the requirements herein.

SECTION 4.10. Limitations on Transactions with Affiliates.

(a) The Parent shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, sell, lease, transfer or otherwise dispose of any of its assets to, or purchase any assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (an “Affiliate Transaction”), unless:

(1) such Affiliate Transaction, is on terms that are no less favorable to the Parent or the relevant Restricted Subsidiary than those that would reasonably have been obtained in a comparable transaction at such time on an arm’s-length basis by the Parent or that Restricted Subsidiary from a Person that is not an Affiliate of the Parent or that Restricted Subsidiary; and

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(2) the Parent or the Issuer delivers to the Trustee:

(a) with respect to any Affiliate Transaction involving aggregate payments or value in excess of $5 million in any fiscal year, an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (1) above and a Secretary’s Certificate which sets forth and authenticates a resolution that has been adopted by a majority of the Independent Directors approving such Affiliate Transaction; and

(b) with respect to any Affiliate Transactions consummated in one transaction or a series of related transactions and involving aggregate payments or value in excess of $10.0 million in any fiscal year, the certificates described in the preceding clause (a) and a written opinion as to the fairness of such Affiliate Transaction to the Parent, or such Restricted Subsidiary from a financial point of view issued by an Independent Financial Advisor to the Board of Directors of the Parent or the Issuer.

(b) The foregoing restrictions shall not apply to:

(1) transactions between or among (a) the Parent and one or more Restricted Subsidiaries or (b) Restricted Subsidiaries; and

(2) transactions implemented pursuant to the Reorganization Plan.

(c) The restrictions set forth in subsection 4.10(a)(2) above shall not apply to:

(1) director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans and reimbursement or advancement of out-of-pocket expenses, and director’s and officer’s liability insurance) and indemnification arrangements, in each case approved by the Board of Directors;

(2) the granting and performance of registration rights;

(3) Restricted Payments which are made in accordance with Section 4.08 and Permitted Investments;

(4) any transaction with a joint venture or similar entity which would constitute an Affiliate Transaction solely because the Parent or a Restricted Subsidiary owns an equity interest in or otherwise controls such joint venture or similar entity and none of the other holders of equity interest of such entity is an Affiliate of the Parent or any Restricted Subsidiary;

(5) (a) any transaction with an Affiliate where the only consideration paid by the Parent or any Restricted Subsidiary is Qualified Equity Interests or (b) the issuance or sale of any Qualified Equity Interests;

(6) any transaction with any Person who is not an Affiliate immediately before the consummation of such transaction that becomes an Affiliate as a result of such transaction; and

(7) transactions with Affiliates solely in their capacity as holders of Indebtedness or Capital Stock of the Parent or any of its Subsidiaries, where such Affiliates receive the same consideration as non-Affiliates in such transaction.

(d) The Issuer represents and confirms that the transactions set forth on Schedule 4.10 hereto comply with subsection 4.10(a)(1) as of the Initial Issue Date.

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SECTION 4.11. Limitations on Liens.

The Parent shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or permit or suffer to exist any Lien (other than Permitted Liens) of any nature whatsoever against any assets of the Parent or any Restricted Subsidiary (including Equity Interests of a Restricted Subsidiary), whether owned at the Initial Issue Date or thereafter acquired, which Lien secures Indebtedness.

SECTION 4.12. Conduct of Business.

The Parent shall not, and shall not permit any Restricted Subsidiary to, engage in any business other than a Permitted Business.

SECTION 4.13. Additional Note Guarantees.

If, after the Initial Issue Date, (a) the Parent or any Restricted Subsidiary shall acquire or create another Subsidiary (other than a Foreign Subsidiary or a Subsidiary that has been designated an Unrestricted Subsidiary), (b) any Unrestricted Subsidiary is redesignated a Restricted Subsidiary or (c) any Foreign Subsidiary guarantees any Indebtedness of the Issuer or the Parent, then, in each such case, the Parent and the Issuer shall cause such Restricted Subsidiary to:

(1) execute and deliver to the Trustee (a) a supplemental indenture in form and substance reasonably satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of the Issuer’s obligations under the Notes and this Indenture and (b) a notation of guarantee in respect of its Note Guarantee;

(2) deliver to the Trustee one or more Opinions of Counsel that such supplemental indenture (a) has been duly authorized, executed and delivered by such Restricted Subsidiary and (b) constitutes a valid and legally binding obligation of such Restricted Subsidiary in accordance with its terms; and

(3) execute and deliver to the Collateral Agent and the Trustee such amendments to the Security Documents and any agreements, instruments and other documents as may be reasonable required or advisable to grant the Collateral Agent, for the benefit of the Holders of the Notes, a perfected Lien on any assets owned by such Restricted Subsidiary or to establish and/or maintain the validity and effectiveness of this Indenture, the Notes or any of the Security Documents.

SECTION 4.14. Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries.

The Parent shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

(a) pay dividends or make any other distributions on or in respect of its Equity Interests;

(b) make loans or advances or pay any Indebtedness or other obligation owed to the Parent or any other Restricted Subsidiary; or

(c) transfer any of its assets to the Parent or any other Restricted Subsidiary;

except for:

(1) encumbrances or restrictions existing under or by reason of applicable law, regulation or order;

(2) encumbrances or restrictions existing under this Indenture, the Security Documents, the Notes and the Note Guarantees;

(3) non-assignment or subletting provisions of any contract or any lease entered into in the ordinary course of business;

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(4) restrictions relating to any Lien permitted under this Indenture that affects only property subject to such Lien;

(5) restrictions imposed on assets to be sold under any agreement to sell assets (including capital stock) permitted under this Indenture to any Person pending the closing of such sale;

(6) instruments governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired;

(7) any other agreement governing Indebtedness entered into after the Initial Issue Date that contains encumbrances and restrictions that are not in the good faith and reasonable judgment of the Parent’s or the Issuer’s Board of Directors, materially more restrictive, taken as a whole, with respect to any Restricted Subsidiary than those in effect on the Initial Issue Date with respect to that Restricted Subsidiary pursuant to agreements in effect on the Initial Issue Date;

(8) customary provisions in partnership agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements entered into in the ordinary course of business;

(9) restrictions on cash or other deposits or net worth imposed by suppliers or landlords under contracts entered into in the ordinary course of business;

(10) encumbrances on property at the time such property was acquired by the Parent, or any Restricted Subsidiary, so long as such restriction relates solely to the property so acquired;

(11) encumbrances or restrictions existing under agreements existing on the Initial Issue Date and as in effect on that date; and

(12) any encumbrances or restrictions imposed by any amendments, restatements, renewals, replacements, refundings or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (11) above or any amendments, restatements, renewals, replacements, refundings or refinancings thereof; provided that such amendments, restatements, renewals, replacements, refundings or refinancings are not, in the good faith and reasonable judgment of the Parent’s or the Issuer’s Board of Directors, materially more restrictive, taken as a whole, with respect to such encumbrances and restrictions than those prior to such amendment, restatement, renewal, replacement, refunding or refinancing.

SECTION 4.15. Limitations on Designation of Unrestricted Subsidiaries.

(a) The Parent and the Issuer may designate any Subsidiary (including any newly formed or newly acquired Subsidiary) of the Parent as an “Unrestricted Subsidiary” under this Indenture (a “Designation”) only if:

(1) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation;

(2) the Parent or the Issuer would be permitted to make, at the time of such Designation, (a) a Permitted Investment or (b) an Investment pursuant to the first paragraph of Section 4.08, in either case, in an amount (the “Designation Amount”) equal to the Fair Market Value of the Parent’s proportionate interest in such Subsidiary on such date; and

(3) such Subsidiary so designated has total assets of $1,000 or less.

(b) No Subsidiary shall be Designated as an “Unrestricted Subsidiary” unless such Subsidiary:

(1) has no Indebtedness other than Non-Recourse Debt;

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(2) owns no Capital Stock or Indebtedness of, or any Lien on any property of, the Parent or any Restricted Subsidiary;

(3) is a Person with respect to which neither the Parent nor any Restricted Subsidiary has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve the Person’s financial condition or to cause the Person to achieve any specified levels of operating results; and

(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Parent or any Restricted Subsidiary, except for any guarantee given solely to support the pledge by the Parent or any Restricted Subsidiary of the Equity Interests of such Unrestricted Subsidiary, which guarantee is not recourse to the Parent or any Restricted Subsidiary.

(c) The Parent and the Issuer may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a “Redesignation”) only if:

(1) no Default shall have occurred and be continuing at the time of and after giving effect to such Redesignation; and

(2) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding immediately following such Redesignation would, if incurred or made at such time, have been permitted to be incurred or made for all purposes of this Indenture.

(d) All Designations and Redesignations must be evidenced by resolutions of the Board of Directors of the Parent or the Issuer, delivered to the Trustee, certifying compliance with the foregoing provisions.

SECTION 4.16. Limitations on Sale and Leaseback Transactions.

The Parent shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, enter into any Sale and Leaseback Transaction; provided that the Parent or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if:

(1) the Parent or such Restricted Subsidiary could have (i) incurred the Indebtedness in the amount of the Attributable Indebtedness attributable to such Sale and Leaseback Transaction pursuant to Section 4.06 and (ii) incurred a Lien to secure such Indebtedness without equally and ratably securing the Notes pursuant to Section 4.11;

(2) the gross cash proceeds of such Sale and Leaseback Transaction are at least equal to the Fair Market Value of the asset that is the subject of such Sale and Leaseback Transaction; and

(3) the transfer of assets in such Sale and Leaseback Transaction is permitted by, and the Parent or the applicable Restricted Subsidiary applies the proceeds of such transaction in accordance with, Section 4.09.

SECTION 4.17. Maintenance of Properties; Compliance with Law.

(a) The Parent shall, and shall cause each of its Restricted Subsidiaries to, at all times cause all properties used or useful in the conduct of their business to be maintained and kept in good condition, repair and working order (reasonable wear and tear excepted), and shall cause to be made all reasonably necessary repairs, renewals, replacements, necessary betterments and necessary improvements thereto, all as in the judgment of the Parent or the Issuer may be reasonably necessary so that the business carried on in connection therewith may be properly conducted, provided that nothing in this Section 4.17 shall prevent the Parent or any Restricted Subsidiary from discontinuing the use, operation or maintenance of any of such properties or disposing of any of them, if such discontinuance or disposal is, in the reasonable judgment of the Parent or the Issuer, desirable in the conduct of the business of the Parent or any Restricted Subsidiary.

(b) The Parent and the Issuer shall, and shall cause each of its Subsidiaries to, comply with all statutes, laws, ordinances or government rules and regulations to which they are subject, non-compliance with which would materially adversely affect the business, earnings, properties, assets or financial condition of the Parent and its Subsidiaries taken as a whole.

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SECTION 4.18. Legal Existence.

Subject to Article Five, the Parent and the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence, and the corporate, partnership or other existence of each Restricted Subsidiary, in accordance with the respective organizational documents (as the same may be amended from time to time) of each Restricted Subsidiary and the rights (charter and statutory), licenses and franchises of the Parent and its Restricted Subsidiaries; provided that the Parent and the Issuer shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Restricted Subsidiaries if the Board of Directors of the Parent or the Issuer shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Parent and its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders.

SECTION 4.19. After-Acquired Property.

Upon the acquisition by the Issuer or any Guarantor of any additional property (“After-Acquired Property”), the Issuer or such Guarantor, as the case may be, shall execute and deliver such mortgages, deeds of trust, security instruments, financing statements and certificates and provide such opinions of counsel as shall be reasonably necessary to vest in the Collateral Agent a perfected security interest, subject only to Permitted Liens, in such After-Acquired Property and to have such After-Acquired Property added to the Collateral, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such After-Acquired Property to the same extent and with the same force and effect.

SECTION 4.20. Further Instruments and Acts.

As specifically required under this Indenture, or upon request of the Trustee or the Collateral Agent, the Parent and each of its Subsidiaries will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

SECTION 4.21. Impairment of Security Interest.

The Parent shall not, and shall not permit any of the Restricted Subsidiaries to, take or knowingly or negligently omit to take, any action which action or omission would or could reasonably be expected to have the result of materially impairing the security interest with respect to the Collateral for the benefit of the Collateral Agent and the Holders of the Notes, except with respect to actions permitted under this Indenture. Neither Parent nor the Issuer shall amend, modify or supplement, or permit or consent to any amendment, modification or supplement of, the Security Documents in any way that would be adverse to the Holders of the Notes in any material respect, except as set forth in Article 10 or as permitted under Article 8.

SECTION 4.22. Future Pledges of Collateral to Secure PIK Interest.

The Security Documents shall provide that the Holders of Notes shall, automatically and without further action, become the beneficiaries of the pledges of property and assets to the Collateral Agent pursuant to the Security Documents to the extent of any PIK Notes issued as payment of PIK Interest on the Notes and any increase in the principal amount of Notes as a result of a PIK Payment and, in each case, related Guarantees thereof.

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SECTION 4.23. Massachusetts Securities Corporation.

Notwithstanding any other provision of this Article IV, (a) neither the Issuer nor any Guarantor shall permit General Scanning Securities Corp. or any of their Subsidiaries that are Massachusetts securities corporations to create, incur, assume or suffer to exist any Liens or any Indebtedness, consummate any Asset Sale (other than (i)in compliance with Section 4.09 or 5.01 or (ii) dispositions to the Issuer or a Guarantor or in connection with the sale and purchase of Investments), make any Investments or engage in any other business operations, other than Investments set forth in clause (4) of the definition of “Permitted Investments”, in each case in accordance with Massachusetts General Laws Chapter 63, § 38B and, in addition, (b) neither the Issuer nor any Guarantor shall permit General Scanning Securities Corp. or any of their respective Subsidiaries that are Massachusetts securities corporations to engage in any business other than (i) investing in assets and securities of all kinds, including but not limited to debt securities and securities sold in transactions originated by it or its manager and (ii) other activities required by law to maintain tax advantaged status under Massachusetts General Laws Chapter 63, § 38B.

ARTICLE FIVE

SUCCESSOR CORPORATION

SECTION 5.01. Limitations on Mergers, Amalgamations, Consolidations, Etc.

Neither the Parent nor the Issuer shall, directly or indirectly, in a single transaction or a series of related transactions, (a) consolidate, amalgamate or merge with or into another Person, or sell, lease, transfer, convey or otherwise dispose of or assign all or substantially all of the assets of the Issuer or the Issuer and the Restricted Subsidiaries (taken as a whole) or (b) adopt a Plan of Liquidation unless, in either case:

(1) either:

(a) the Issuer or the Parent will be the surviving or continuing Person; or

(b) the Person formed by or surviving such consolidation, amalgamation or merger or to which such sale, lease, conveyance or other disposition shall be made (or, in the case of a Plan of Liquidation, any Person to which assets are transferred) (collectively, the “Successor”) is a corporation organized and existing under the laws of any State of the United States of America, the District of Columbia and the Successor expressly assumes, by agreements in form and substance reasonably satisfactory to the Trustee, all of the obligations of the Issuer under the Notes and this Indenture;

(2) immediately prior to and immediately after giving effect to such transaction and the assumption of the obligations as set forth in clause (1)(b) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, no Default shall have occurred and be continuing;

(3) immediately after and giving effect to such transaction and the assumption of the obligations set forth in clause (1)(b) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, the Consolidated Net Worth of the Issuer or Parent, as the case may be, or the Successor, would be at least equal to the Consolidated Net Worth of the Issuer immediately prior to such transaction; and

(4) the Issuer or Parent shall have delivered to the Trustee and the Collateral Agent an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) comply with this Indenture.

For purposes of this Section 5.01, any Indebtedness of the Successor which was not Indebtedness of the Issuer or the Parent, as the case may be, immediately prior to the transaction shall be deemed to have been incurred in connection with such transaction.

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Except as provided in Section 10.04, neither Issuer nor any Guarantor may consolidate or amalgamate with or merge with or into another Person, unless:

(A) either:

(i) the Issuer or such Guarantor will be the surviving or continuing Person; or

(ii) the Person formed by or surviving any such consolidation, amalgamation or merger is the Issuer or another Guarantor or assumes, by agreements in form and substance reasonably satisfactory to the Trustee, all of the obligations of the Issuer or such Guarantor under the Note Guarantee of such Guarantor and this Indenture; and

(B) immediately after giving effect to such transaction, no Default shall have occurred and be continuing.

For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries, the Equity Interests of which constitute all or substantially all of the properties and assets of the Issuer, will be deemed to be the transfer of all or substantially all of the properties and assets of the Issuer.

Upon any consolidation, combination, amalgamation or merger of the Issuer or a Guarantor, or any transfer of all or substantially all of the assets of the Issuer in accordance with the foregoing, in which the Issuer or such Guarantor is not the continuing obligor under the Notes or its Note Guarantee, the surviving entity formed by such consolidation or into which the Issuer or such Guarantor is merged or amalgamated or the Person to which the conveyance, lease or transfer is made will succeed to, and be substituted for, and may exercise every right and power of, the Issuer or such Guarantor under this Indenture, the Notes and the Note Guarantees with the same effect as if such surviving entity had been named therein as the Issuer or such Guarantor and, except in the case of a lease, the Issuer or such Guarantor, as the case may be, will be released from the obligation to pay the principal of and interest on the Notes or in respect of its Note Guarantee, as the case may be, the Issuer’s or such Guarantor’s other obligations and covenants under the Notes, this Indenture and its Note Guarantee, if applicable.

The foregoing provisions (other than clause (B)) shall not apply to any transaction or series of transactions which constitute an Asset Sale if Parent or Issuer has complied with the covenant described under Section 4.09.

Notwithstanding the foregoing, (i) any Restricted Subsidiary (other than the Issuer) may consolidate with, merge or amalgamate with or into or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all of its assets to the Issuer or a Guarantor and (ii) any Restricted Subsidiary that is neither a Guarantor nor the Issuer may consolidate with, merge or amalgamate with or into or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all of its assets to any Restricted Subsidiary that is not a Guarantor or the Issuer.

SECTION 5.02. Successor Person Substituted.

Upon any consolidation or merger, or any transfer of all or substantially all of the assets of the Parent or any Restricted Subsidiary in accordance with Section 5.01, the successor entity formed by such consolidation or into which the Parent or such Restricted Subsidiary is merged or to which such transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, Parent, or such Restricted Subsidiary under this Indenture with the same effect as if such successor entity had been named as the Parent or such Restricted Subsidiary herein, and thereafter the predecessor entity shall be relieved of all obligations and covenants under this Indenture and the Notes.

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ARTICLE SIX

DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default.

Each of the following shall be an “Event of Default:”

(1) failure by the Issuer to pay interest (whether in cash or in the form of PIK Notes or an increase in the principal amount of Notes as a result of a PIK Payment or otherwise) on any of the Notes when it becomes due and payable and the continuance of any such failure for 30 days;

(2) failure by the Issuer to pay to Holders the principal on or any other amount (other than interest) in respect of any of the Notes when it becomes due and payable, whether at stated maturity, upon redemption, upon purchase, upon acceleration or otherwise, including pursuant to any offer to purchase in connection with an Asset Sale or Section 4.07;

(3) failure by the Issuer to comply with Section 5.01, or an offer to redeem or repurchase the Notes, if required, upon an Asset Sale or pursuant to Section 4.07;

(4) failure by Parent or the Issuer to comply with any other agreement or covenant in this Indenture or Security Documents and continuance of this failure for 45 days (other than Section 4.02 which shall be 60 days) after notice of the failure has been given to the Issuer by the Trustee, by the Holders of at least 25% of the aggregate principal amount of the Notes then outstanding or by the beneficial owners of at least 25% of the aggregate principal amount of the Notes then outstanding; provided, however, that notice from the beneficial owners pursuant to this Section 6.01(4) shall be deemed proper only if, and as of such date, the Issuer has received such information and certifications (including from the Holder of the Note or any Agent Member) reasonably necessary to determine that the person(s) providing such notice are beneficial owners of such Notes (for purposes of this Section 6.01(4), the term “beneficial owner” has the meaning given such term in Rules 13d-3 and 13d-5 under the Exchange Act); or

(5) default under any mortgage, indenture or other instrument or agreement under which there may be issued or by which there may be secured or evidenced Indebtedness of the Parent or any Restricted Subsidiary, whether such Indebtedness now exists or is incurred after the Initial Issue Date, which default:

(a) is caused by a failure to pay at final maturity principal on such Indebtedness within the applicable express grace period and any extensions thereof, or

(b) that has resulted in the acceleration of such Indebtedness prior to its express final maturity, and

in each case, the principal amount of such Indebtedness, together with any other Indebtedness with respect to which an event described in clause (a) or (b) has occurred and is continuing, aggregates $10.0 million or more;

(6) one or more judgments or orders that exceed $10.0 million in the aggregate (net of amounts covered by insurance or bonded) for the payment of money have been entered by a court or courts of competent jurisdiction against the Parent or any Restricted Subsidiary and such judgment or judgments have not been satisfied, discharged, bonded (by providing insurance, letters of credit or other financial assurance), stayed or stayed pending appeal, annulled or rescinded within 60 days of being entered;

(7) the Issuer, the Parent or any Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

(a) commences a voluntary case,

(b) consents to the entry of an order for relief against it in an involuntary case,

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(c) consents to the appointment of a Custodian of it or for all or substantially all of its assets, or

(d) makes a general assignment for the benefit of its creditors;

(8) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(a) is for relief against the Issuer, the Parent or any Significant Subsidiary as debtor in an involuntary case,

(b) appoints a Custodian of the Issuer, the Parent or any Significant Subsidiary or a Custodian for all or substantially all of the assets of the Parent or any Significant Subsidiary, or

(c) orders the liquidation of the Issuer, the Parent or any Significant Subsidiary,

and the order or decree remains unstayed and in effect for 60 days;

(9) any Note Guarantee of any Significant Subsidiary or the Parent ceases to be in full force and effect (other than in accordance with the terms of such Note Guarantee and this Indenture) or is declared null and void and unenforceable or found to be invalid or any Guarantor denies its liability under its Note Guarantee (other than by reason of release of a Guarantor from its Note Guarantee in accordance with the terms of this Indenture and the Note Guarantee); or

(10)

(a) the repudiation or disaffirmation by the Issuer or any Guarantor of its obligations under any of the Security Documents;

(b) the determination in a judicial proceeding that any of the Security Documents is unenforceable or invalid against the Issuer or any Guarantor for any reason with respect to any material portion of the Collateral; or

(c) any Security Document shall cease to be in full force and effect (other than in accordance with the terms of the applicable Security Document and the Indenture), or cease to be effective to grant the Collateral Agent a perfected Lien on the Collateral to the extent required thereby and with the priority purported to be created thereby, in each case under this clause (10)(c), with respect to any material portion of the Collateral.

Without limiting the right to impose Reporting Default Interest, for the avoidance of doubt, a Reporting Default does not constitute an Event of Default.

SECTION 6.02. Acceleration and Default Rate.

If an Event of Default (other than an Event of Default specified in clause (7) or (8) of Section 6.01), shall have occurred and be continuing, the Trustee, by written notice to the Issuer, or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding by written notice to the Issuer and the Trustee, may declare all amounts owing under the Notes to be due and payable immediately. Upon such declaration of acceleration, the aggregate principal of and accrued and unpaid interest on the outstanding Notes, plus the Default Rate, shall immediately become due and payable; provided, however, that after such acceleration, but before a judgment or decree based on such acceleration, the Holders of a majority in aggregate principal amount of such outstanding Notes may rescind and annul such acceleration if (a) the rescission would not conflict with any order or decree, (b) the Issuer has paid or deposited with the Trustee a sum sufficient to pay all principal, premium or interest (including additional interest) that has become due otherwise than by such declaration of acceleration, all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee under Section 7.07 and (c) all Events of Default, other than the nonpayment of accelerated principal and interest, have been cured or waived as provided in this Indenture. If an Event of Default specified in clause (7) or (8) of Section 6.01 occurs, all outstanding Notes shall become due and payable without any further action or notice. No such rescission shall affect any subsequent default or impair any right consequent thereon.

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SECTION 6.03. Other Remedies.

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, or premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes, this Indenture or the Security Documents and may take any necessary action requested of it as Trustee to settle, compromise, adjust or otherwise conclude any proceedings to which it is a party.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. Any costs associated with actions taken by the Trustee under this Section 6.03 shall be reimbursed to the Trustee by the Issuer.

SECTION 6.04. Waiver of Past Defaults and Events of Default.

Subject to Sections 6.02, 6.09 and 8.02, the Holders of a majority in aggregate principal amount of the Notes then outstanding have the right to waive any existing Default or compliance with any provision of this Indenture or the Notes, other than (a) a Default or Event of Default in the payment of the principal of, or premium, if any, or interest or additional interest on, any Note, (b) a Default or Event of Default described in clause (7) or (8) of Section 6.01, or (c) any Default or Event of Default in respect of any provision of this Indenture or the Notes which, under Section 8.02, cannot be modified or amended without the consent of the Holder of each outstanding Note affected. This Section 6.04 (together with Section 2.11) shall be in lieu of Section 316(a)(1)(B) of the TIA and such of Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the Notes, as permitted by the TIA. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

SECTION 6.05. Reporting Default.

(a) Each of the following shall constitute a “Reporting Default”:

(1) the failure of the Restatement Date to have occurred on or prior to January     , 2011; and

(2) the failure of the Parent’s common shares to be listed on an Eligible Market. As used herein, “Eligible Market” means The NASDAQ Global Select Market, The NASDAQ Global Market, the NYSE Amex Equities, or The New York Stock Exchange, Inc.

(b) As of the first day on which the Reporting Default has occurred and for as long as such Reporting Default is continuing, the Notes shall accrue Reporting Default Interest. A Reporting Default shall no longer be deemed to be continuing on the earlier date on which:

(1) the Restatement Date occurs and the Parent’s common shares are listed on an Eligible Market; and

(2) the following have occurred (i) a Form 25 with respect to the Parent’s common shares has been filed with the applicable Eligible Market delisting the Parent’s common shares from such Eligible Market and (ii) the Parent has filed a Form 15 with the SEC to deregister its common shares under Section 12(g) of the Exchange Act and to suspend its reporting obligations under Section 15(d) of the Exchange Act.

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SECTION 6.06. Control by Majority.

The Holders of a majority in aggregate principal amount of the Notes then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee by this Indenture or any Security Document. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or any Security Document or that the Trustee determines may be unduly prejudicial to the rights of another Holder not taking part in such direction, and the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, determines that the action so directed may not lawfully be taken or if the Trustee in good faith shall, by a Responsible Officer, determine that the proceedings so directed may result in costs and expenses of the Trustee for which it has no source of payment or recovery or involve it in personal liability; provided that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. This Section 6.06 shall be in lieu of Section 316(a)(1)(A) of the TIA and such of Section 316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture and the Notes, as permitted by the TIA.

SECTION 6.07. Limitation on Suits.

No Holder will have any right to institute any proceeding with respect to this Indenture or for any remedy thereunder, unless the Trustee:

(1) has failed to act for a period of 60 days after receiving written notice of a continuing Event of Default by such Holder and a request to act by Holders of at least 25% in aggregate principal amount of Notes outstanding;

(2) has been offered indemnity satisfactory to it in its reasonable judgment; and

(3) has not received from the Holders of a majority in aggregate principal amount of the outstanding Notes a direction inconsistent with such request.

However, such limitations do not apply to a suit instituted by a Holder of any Note for enforcement of payment of the principal of or interest on such Note on or after the due date therefor (after giving effect to the grace period specified in clause (1) of Section 6.01).

SECTION 6.08. No Personal Liability of Directors, Officers, Employees and Stockholders.

No director, officer, employee, incorporator or stockholder of the Issuer or any Guarantor will have any liability for any obligations of the Issuer or any Guarantor under the Notes or this Indenture or of any Guarantor under its Note Guarantee or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Note Guarantees.

SECTION 6.09. Rights of Holders To Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal of, or premium, if any, and interest of the Note on or after the respective due dates expressed in the Note, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder.

SECTION 6.10. Collection Suit by Trustee.

If an Event of Default in payment of principal or interest specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer or any Guarantor (or any other obligor on the Notes) for the whole amount of unpaid principal and accrued interest remaining unpaid, together with interest on overdue principal and, to the extent that payment of such interest is lawful, interest on overdue installments of interest, in each case at the rate set forth in the Notes.

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SECTION 6.11. Trustee May File Proofs of Claim.

The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Issuer or any Guarantor (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same after deduction of its charges and expenses to the extent that any such charges and expenses are not paid out of the estate in any such proceedings and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan or reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceedings.

SECTION 6.12. Priorities.

If the Trustee collects any money pursuant to this Article Six, it shall, subject to any payment priorities awarded to Working Capital Obligations, pay out the money in the following order:

FIRST: to the Trustee for amounts due under Section 7.07;

SECOND: to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest as to each, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes; and

THIRD: to the Issuer or, to the extent the Trustee collects any amount directly from any Guarantor, to such Guarantor.

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.12.

SECTION 6.13. Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.13 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.09 or a suit by Holders of more than 10% in principal amount of the Notes then outstanding.

SECTION 6.14. Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture or any Security Document and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every case, subject to any determination in such proceeding, the Issuer, the Guarantors, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

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ARTICLE SEVEN

TRUSTEE

SECTION 7.01. Duties of Trustee.

(a) If an Event of Default actually known to a Responsible Officer of the Trustee has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and the Security Documents and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the same circumstances in the conduct of his or her own affairs.

(b) Except during the continuance of an Event of Default:

(1) The Trustee need perform only those duties that are specifically set forth in this Indenture and no others.

(2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture, but, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform on their face to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(1) This paragraph does not limit the effect of paragraph (b) of this Section 7.01.

(2) The Trustee shall not be liable for any error of judgment made in good faith, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.

(3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to the terms hereof.

(4) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its rights, powers or duties if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risk or liability is not reasonably assured to it.

(d) Whether or not therein expressly so provided, paragraphs (a), (b), (c) and (e) of this Section 7.01 shall govern every provision of this Indenture that in any way relates to the Trustee.

(e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it in its sole discretion against any loss, liability, expense or fee.

(f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer and the Parent. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by the law.

(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01 and to the provision of the TIA.

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SECTION 7.02. Rights of Trustee.

Subject to Section 7.01:

(1) The Trustee may conclusively rely on any document reasonably believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.

(2) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel, or both, which shall conform to the provisions of Section 11.05. The Trustee shall be protected and shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion.

(3) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed by it with due care.

(4) The Trustee shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers; provided that the Trustee’s conduct does not constitute negligence or willful misconduct.

(5) The Trustee may consult with counsel of its selection, and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(6) The Trustee shall not be deemed to have knowledge of any Default or Event of Default except (i) any Event of Default occurring pursuant to Section 6.01(1) or 6.01(2) or (ii) any Event of Default of which the Trustee shall have received written notification or otherwise obtained actual knowledge. In the absence of such notice, the Trustee may conclusively assume there is no Default except as aforesaid.

(7) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture or any Security Document, and may refuse to perform any duty or exercise any such rights or powers, unless it shall have been provided reasonable security or indemnity satisfactory to it against the cost, expenses and liabilities which may be incurred by it in connection with such exercise of its rights or powers.

(8) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate (including any Officers’ Certificate), statement, instrument, opinion (including any Opinion of Counsel), notice, request, direction, consent, order, bond, debenture, note, other evidence of Indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, upon reasonable notice to the Issuer, to examine the books, records, and premises of the Issuer, personally or by agent or attorney, at the sole cost of the Issuer and shall incur no liability of any kind by reason of such inquiry or investigation other than as a result of the Trustee’s gross negligence or willful misconduct. Except with respect to Sections 4.01, 4.02 (subject to paragraph 12 below) and 4.04, the Trustee shall have no duty to inquire as to the performance of the Issuer’s and the Guarantors’ covenants set forth herein.

(9) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

(10) The permissive rights of the Trustee to do things enumerated in this Indenture or any Security Document shall not be construed as duties hereunder.

(11) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder.

(12) Delivery of reports, information and documents to the Trustee under Section 4.02 is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as which the Trustee is entitled to rely exclusively on the Officers’ Certificate).

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(13) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(14) The Trustee may request that the Issuer deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

(15) In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

SECTION 7.03. Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may make loans to, accept deposits from, perform services for or otherwise deal with either the Issuer or any Guarantor, or any Affiliates thereof, with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, shall be subject to Sections 7.10 and 7.11.

SECTION 7.04. Trustee’s Disclaimer.

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Security Documents, the Notes or any Guarantee, it shall not be accountable for the Issuer’s or any Guarantor’s use of the proceeds from the sale of Notes or any money paid to the Issuer or any Guarantor pursuant to the terms of this Indenture and it shall not be responsible for the use or application of money received by any Paying Agent other than the Trustee. The Trustee shall not be responsible for any statement in the Notes, Note Guarantee, this Indenture, the Security Documents or any other document in connection with the issuance of the Notes other than its certificate of authentication.

SECTION 7.05. Notice of Defaults.

The Trustee shall, within 30 days after the occurrence of any Default with respect to the Notes, give the Holders notice of all uncured Defaults thereunder known to it; provided, however, that, except in the case of an Event of Default in payment with respect to the Notes or a Default in complying with Section 5.01, the Trustee shall be protected in withholding such notice if and so long as a committee of its responsible officers in good faith determines that the withholding of such notice is in the interests of the Holders.

SECTION 7.06. Reports by Trustee to Holders.

If required by TIA § 313(a), within 60 days after May 15 of any year, commencing May 15, 2010, the Trustee shall mail to each Holder a brief report dated as of such May 15 that complies with TIA § 313(a). The Trustee also shall comply with TIA § 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA § 313(c) and TIA § 313(d).

Reports pursuant to this Section 7.06 shall be transmitted by mail:

(1) to all Holders of Notes, as the names and addresses of such Holders appear on the Registrar’s books; and

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(2) to such Holders of Notes as have, within the two years preceding such transmission, filed their names and addresses with the Trustee for that purpose.

A copy of each report at the time of its mailing to Holders shall be filed with the SEC and each stock exchange on which the Notes are listed. The Issuer shall promptly notify the Trustee, and in any event within 10 Business Days, when the Notes are listed on any stock exchange and of any delisting thereof.

SECTION 7.07. Compensation and Indemnity.

The Issuer and the Guarantors shall pay to the Trustee and Agents from time to time reasonable compensation for their services hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust). The Issuer and the Guarantors shall reimburse the Trustee and Agents upon request for all out-of-pocket disbursements, expenses and advances incurred or made by them in connection with their duties under this Indenture, including the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

The Issuer and the Guarantors shall jointly and severally indemnify each of the Trustee and any predecessor Trustee and each of the Agents for, and hold each of them harmless against, any and all loss, damage, claim, liability or expense, including without limitation taxes (other than taxes based on the income of the Trustee or such Agent) and reasonable attorneys’ fees and expenses incurred by each of them in connection with the acceptance or performance of its duties under this Indenture including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder (including, without limitation, settlement costs). The Trustee or Agent shall notify the Issuer and the Guarantors in writing promptly of any claim asserted against and received by the Trustee or Agent for which it may seek indemnity. However, the failure by the Trustee or Agent to so notify the Issuer and the Guarantors shall not relieve the Issuer and Guarantors of their obligations hereunder except to the extent the Issuer and the Guarantors are prejudiced thereby.

Notwithstanding the foregoing, the Issuer and the Guarantors need not reimburse the Trustee for any expense or indemnify it against any loss or liability determined to have been caused by the Trustee through its own negligence, bad faith or willful misconduct. To secure the payment obligations of the Issuer and the Guarantors in this Section 7.07, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee except such money or property held in trust to pay principal of and interest on particular Notes. The obligations of the Issuer and the Guarantors under this Section 7.07 to compensate and indemnify the Trustee, Agents and each predecessor Trustee and to pay or reimburse the Trustee, Agents and each predecessor Trustee for expenses, disbursements and advances shall survive the resignation or removal of the Trustee and the satisfaction, discharge or other termination of this Indenture, including any termination or rejection hereof under any Bankruptcy Law.

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(7) or (8) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.

For purposes of this Section 7.07, the term “Trustee” shall include any trustee appointed pursuant to this Article Seven.

SECTION 7.08. Replacement of Trustee.

The Trustee may resign by so notifying the Issuer and the Guarantors in writing. The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by notifying the Issuer and the removed Trustee in writing and may appoint a successor Trustee with the Issuer’s written consent, which consent shall not be unreasonably withheld. The Issuer may remove the Trustee at its election if:

(1) the Trustee fails to comply with Section 7.10;

(2) the Trustee is adjudged a bankrupt or an insolvent;

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(3) a receiver or other public officer takes charge of the Trustee or its property; or

(4) the Trustee otherwise becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. If a Trustee is removed with or without cause, all fees and expenses (including the reasonable fees and expenses of counsel) of the Trustee incurred in the administration of the trust or in performing the duties hereunder shall be paid to the Trustee.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, at the expense of the Issuer, the Issuer or the Holders of a majority in principal amount of the outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee fails to comply with Section 7.10, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Immediately following such delivery, the retiring Trustee shall, subject to its rights and receipt of any amounts due under Section 7.07, transfer all property held by it as Trustee to the successor Trustee, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall mail notice of its succession to each Holder. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.

SECTION 7.09. Successor Trustee by Consolidation, Merger, Etc.

If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust assets to, another entity, subject to Section 7.10, the successor entity without any further act shall be the successor Trustee; provided such entity shall be otherwise qualified and eligible under this Article Seven.

SECTION 7.10. Eligibility; Disqualification.

This Indenture shall always have a Trustee who satisfies the requirements of TIA §§ 310(a)(1) and (2) in every respect. The Trustee (together with its corporate parent) shall have a combined capital and surplus of at least $100,000,000 as set forth in the most recent applicable published annual report of condition. The Trustee shall comply with TIA § 310(b), including the provision in § 310(b)(1).

SECTION 7.11. Preferential Collection of Claims Against Issuer.

The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

SECTION 7.12. Paying Agents.

The Issuer shall cause each Paying Agent other than the Trustee to execute and deliver to it and the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 7.12:

(A) that it will hold all sums held by it as agent for the payment of principal of, or premium, if any, or interest on, the Notes (whether such sums have been paid to it by the Issuer or by any obligor on the Notes) in trust for the benefit of Holders or the Trustee;

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(B) that it will at any time during the continuance of any Event of Default, upon written request from the Trustee, deliver to the Trustee all sums so held in trust by it together with a full accounting thereof; and

(C) that it will give the Trustee written notice within three (3) Business Days of any failure of the Issuer (or by any obligor on the Notes) in the payment of any installment of the principal of, premium, if any, or interest on, the Notes when the same shall be due and payable.

ARTICLE EIGHT

AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 8.01. Without Consent of Holders.

Without prior notice to or consent of any Holder, (i) the Parent, the Issuer and the Trustee may amend, waive or supplement this Indenture, the Note Guarantees or the Notes and (ii) the Parent, the Issuer and the Collateral Agent may amend, waive or supplement the Security Documents:

(1) to provide for the assumption of the Issuer’s or a Guarantor’s obligations to the Holders pursuant to Section 5.01;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

(3) to cure any ambiguity, defect, mistake or inconsistency, so long as the effect thereof is not materially adverse, taken as a whole, to the Holders;

(4) to add Note Guarantees with respect to the Notes or to secure the Notes;

(5) to release any Guarantor from any of its obligations under its Note Guarantee or this Indenture (solely to the extent permitted by this Indenture);

(6) to qualify or maintain the qualification of this Indenture under the TIA; or

(7) to add to the covenants of the Issuer or a Guarantor for the benefit of the Holders of the Notes or to surrender any right or power herein conferred upon the Issuer or a Guarantor with respect to the Notes;

(8) to provide additional assets as Collateral;

(9) to release Collateral from the Liens pursuant to the Indenture or the Security Documents when permitted or required by the Indenture or the Security Documents; or

(10) in the case of the Security Documents, as expressly provided in Section 10.06(b) hereof.

The Trustee is hereby authorized to join with the Issuer and the Guarantors in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture which adversely affects its own rights, duties or immunities under this Indenture.

SECTION 8.02. With Consent of Holders.

This Indenture or the Notes may be amended with the consent (which may include consents obtained in connection with a tender offer or exchange offer for Notes) of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, and any existing Default under, or compliance with any provision of, this Indenture may be waived (other than any continuing Default in the payment of the principal or interest on the Notes) with the consent (which may include consents obtained in connection with a tender offer or exchange offer for Notes) of the Holders of a majority in aggregate principal amount of the Notes then outstanding; provided that, without the consent of each Holder affected, no amendment or waiver may:

(1) reduce, or change the maturity of, the principal of any Note;

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(2) reduce the rate of or extend the time for payment of interest on any Note;

(3) change the date on which any Notes are subject to redemption;

(4) make any Note payable in money or currency other than that stated in the Notes;

(5) modify or change any provision of this Indenture or the related definitions to affect the ranking of the Notes or any Note Guarantee in a manner that adversely affects the Holders;

(6) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver to this Indenture or the Notes;

(7) impair the rights of Holders to receive payments of principal of or interest on the Notes on or after the due date therefor or to institute suit for the enforcement of any payment on the Notes;

(8) release any Guarantor from any of its obligations under its Note Guarantee or this Indenture, except as otherwise permitted by this Indenture, release all or a material portion of the Collateral or subordinate any Lien granted in favor of the Collateral Agent for the benefit of the Holders;

(9) make any change to the provisions of the Indenture or any Security Document dealing with the application of proceeds of the Collateral, in each case, that would adversely affect the Holders; or

(10) make any change in this Section 8.02.

After an amendment, supplement or waiver under this Section 8.02 becomes effective, the Issuer shall mail to the Holders a notice briefly describing the amendment, supplement or waiver.

Upon the written request of the Issuer, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the receipt by the Trustee of evidence reasonably satisfactory to the Trustee of the consent of the Holders as aforesaid and upon receipt by the Trustee of the documents described in Section 8.06, the Trustee shall join with the Issuer and the Guarantors in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture, in which case the Trustee may, but shall not be obligated to, enter into such supplemental indenture.

It shall not be necessary for the consent of the Holders under this Section 8.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

The Parent and the Issuer shall not, and shall not permit any of their Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of their terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of the Notes that consent, waiver or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

SECTION 8.03. Compliance with Trust Indenture Act.

Every amendment or supplement to this Indenture or the Notes shall comply with the TIA as then in effect.

SECTION 8.04. Revocation and Effect of Consents.

Until an amendment, supplement, waiver or other action becomes effective, a consent to it by a Holder of a Note is a continuing consent conclusive and binding upon such Holder and every subsequent

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Holder of the same Note or portion thereof, and of any Note issued upon the transfer thereof or in exchange therefor or in place thereof, even if notation of the consent is not made on any such Note. Any such Holder or subsequent Holder, however, may revoke the consent as to his Note or portion of a Note, if the Trustee receives the written notice of revocation before the date the amendment, supplement, waiver or other action becomes effective.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the requisite number of Holders has been obtained.

After an amendment, supplement, waiver or other action becomes effective, it shall bind every Holder, unless it makes a change described in any of clauses (1) through (10) of Section 8.02. In that case the amendment, supplement, waiver or other action shall bind each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note.

SECTION 8.05. Notation on or Exchange of Notes.

If an amendment, supplement, or waiver changes the terms of a Note, the Trustee (in accordance with the specific written direction of the Issuer) shall request the Holder of the Note (in accordance with the specific written direction of the Issuer) to deliver it to the Trustee. In such case, the Trustee shall place an appropriate notation on the Note about the changed terms and return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for the Note shall issue, the Guarantors shall endorse, and the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

SECTION 8.06. Trustee To Sign Amendments, Etc.

The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article Eight if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment, supplement or waiver, the Trustee shall be provided with and, subject to Section 7.01, shall be fully protected in relying conclusively upon an Officers’ Certificate and an Opinion of Counsel stating, in addition to the matters required by Sections 11.04 and 11.05, that such amendment, supplement or waiver is authorized or permitted by this Indenture and all conditions precedent required hereunder to such amendment, supplement or waiver have been satisfied.

ARTICLE NINE

DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 9.01. Discharge of Indenture.

The Issuer may terminate its obligations and the obligations of the Issuer and the Guarantors under the Notes, the Security Documents, the Note Guarantees and this Indenture, except the obligations referred to in the last paragraph of this Section 9.01, if the Parent or the Issuer has paid or caused to be paid all sums payable by it under this Indenture, and

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(1) all the Notes that have been authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has been deposited in trust or segregated and held in trust by the Parent or the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee for cancellation, or

(2)

(a) all Notes not delivered to the Trustee for cancellation otherwise (i) have become due and payable, (ii) will become due and payable at the maturity date, within one year or (iii) have been or are to be called for redemption within one year pursuant to paragraph 7 of the Notes, and, in the case of (i), or (ii), or (iii), the Parent or the Issuer has irrevocably deposited or caused to be deposited with the Trustee as trust funds, in trust solely for the benefit of the Holders, U.S. legal tender, U.S. Government Obligations or a combination thereof, in such amounts as will be sufficient (without consideration of any reinvestment of interest) to pay and discharge the entire Indebtedness (including all principal and accrued interest) on the Notes not theretofore delivered to the Trustee for cancellation, or

(b) the Parent or the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or on the date of redemption, as the case may be.

In addition, if required by the Trustee, the Parent or the Issuer must deliver an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent to the satisfaction and discharge of this Indenture have been complied with.

After such delivery, the Trustee shall acknowledge in writing the discharge of the Issuer’s, and the Guarantors’ obligations under the Notes, the Note Guarantees and this Indenture except for those surviving obligations specified below.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Issuer in Sections 7.07, 9.07 and 9.08 shall survive such satisfaction and discharge.

SECTION 9.02. Legal Defeasance.

The Issuer may at its option, by Board Resolution, be discharged from its obligations with respect to the Notes and the Guarantors discharged from their obligations under the Note Guarantees on the date the conditions set forth in Section 9.04 are satisfied (hereinafter, “Legal Defeasance”). For this purpose, such Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire indebtedness represented by the Notes and to have satisfied all its other obligations under such Notes and this Indenture insofar as such Notes are concerned (and the Trustee, at the expense of the Issuer, shall, subject to Section 9.06, execute instruments in form and substance reasonably satisfactory to the Trustee and Issuer acknowledging the same), except for the following, which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of outstanding Notes to receive payments in respect of the principal of and interest on such Notes when such payments are due solely from the trust funds described in Section 9.04 and as more fully set forth in such Section, (B) the Issuer’s obligations with respect to such Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2,11, 2.12 and 4.18, (C) the rights, powers, trusts, duties, and immunities of the Trustee hereunder (including claims of, or payments to, the Trustee under or pursuant to Section 7.07) and (D) this Article Nine. Subject to compliance with this Article Nine, the Issuer may exercise its option under this Section 9.02 with respect to the Notes notwithstanding the prior exercise of its option under Section 9.03 with respect to the Notes.

SECTION 9.03. Covenant Defeasance.

At the option of the Issuer, pursuant to a Board Resolution, (x) the Issuer and the Guarantors shall be released from their respective obligations under Sections 4.02 (except for obligations mandated by the TIA), 4.05 through 4.17, inclusive, 4.19 and clause (3) of the first paragraph of Section 5.01 and (y) Section 6.01(4), (5), (6) and (9) shall no longer apply with respect to the outstanding Notes on and after the date the conditions set forth in Section 9.04 are satisfied (hereinafter, “Covenant Defeasance”). For this

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purpose, such Covenant Defeasance means that the Issuer and the Guarantors may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section or portion thereof, whether directly or indirectly by reason of any reference elsewhere herein to any such specified Section or portion thereof or by reason of any reference in any such specified Section or portion thereof to any other provision herein or in any other document, but the remainder of this Indenture and the Notes shall be unaffected thereby.

SECTION 9.04. Conditions to Legal Defeasance or Covenant Defeasance.

The following shall be the conditions to application of Section 9.02 or Section 9.03 to the outstanding Notes:

(1) the Issuer must irrevocably deposit with the Trustee, as trust funds, in trust solely for the benefit of the Holders, U.S. legal tender, U.S. Government Obligations or a combination thereof, in such amounts as will be sufficient (without consideration of any reinvestment of interest) in the opinion of a nationally recognized firm of independent public accountants selected by the Issuer, to pay the principal of and interest on the Notes on the stated date for payment or on the redemption date of the principal or installment of principal of or interest on the Notes,

(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States confirming that:

(a) the Issuer has received from, or there has been published by the Internal Revenue Service, a ruling, or

(b) since the date hereof, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon this Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred,

(3) in the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States confirming that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the Covenant Defeasance had not occurred,

(4) no Default shall have occurred and be continuing on the date of such deposit (other than a Default resulting from the borrowing of funds to be applied to (x) such deposit, (y) similar contemporaneous deposits to redeem or defease other Indebtedness and (z) costs related thereto),

(5) the Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute (a) a Default under this Indenture or (b) a default under any other material agreement or instrument to which the Issuer or any of its Subsidiaries is a party or by which the Issuer or any of its Subsidiaries is bound (other than any such Default or default resulting solely from the borrowing of funds to be applied to (x) such deposit, (y) similar contemporaneous deposits to redeem or defease other Indebtedness and (z) costs related thereto),

(6) the Issuer shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes have been complied with as required by this Indenture.

If the funds deposited with the Trustee to effect Covenant Defeasance are insufficient to pay the principal of and interest on the Notes when due, then the Issuer’s obligations and the obligations of Guarantors under this Indenture will be revived and no such defeasance will be deemed to have occurred.

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SECTION 9.05. Deposited Money and U.S. Government Obligations To Be Held in Trust; Other Miscellaneous Provisions.

All money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee pursuant to Section 9.04 in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent, to the Holders of such Notes, of all sums due and to become due thereon in respect of principal, premium, if any, and accrued interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer, and the Guarantors shall (on a joint and several basis) pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 9.04 or the principal, premium, if any, and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Anything in this Article Nine to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer from time to time any money or U.S. Government Obligations held by it as provided in Section 9.04 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

SECTION 9.06. Reinstatement.

If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 9.01, 9.02 or 9.03, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s and each Guarantor’s obligations under this Indenture, the Notes and the Note Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to this Article Nine until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Section 9.01, 9.02 or 9.03, as the case may be; provided that if the Issuer or the Guarantors have made any payment of principal of, premium, if any, or accrued interest on any Notes because of the reinstatement of their obligations, the Issuer or the Guarantors, as the case may be, shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. The Issuer’s and each Guarantor’s obligations under this Indenture, the Notes and the Note Guarantees shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of any of their obligations is rescinded or must otherwise be returned by the Trustee, the Collateral Agent or any other Person upon the insolvency, bankruptcy or reorganization of the Issuer, a Guarantor or otherwise, all as though such payment had not been made.

SECTION 9.07. Moneys Held by Paying Agent.

In connection with the satisfaction and discharge of this Indenture, all moneys then held by any Paying Agent under the provisions of this Indenture shall, upon written demand of the Issuer, be paid to the Trustee, or if sufficient moneys have been deposited pursuant to Section 9.04, to the Issuer (or, if such moneys had been deposited by the Guarantors, to such Guarantors), and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

SECTION 9.08. Moneys Held by Trustee.

Subject to applicable law, any moneys deposited with the Trustee or any Paying Agent or then held by the Issuer or the Guarantors in trust for the payment of the principal of, or premium, if any, or interest on any Note that are not applied but remain unclaimed by the Holder of such Note for one year after the date upon which the principal of, or premium, if any, or interest on such Note shall have respectively become due and payable shall be repaid to the Issuer (or, if appropriate, the Guarantors), or if such moneys are then held by the Issuer or the Guarantors in trust, such moneys shall be released from such trust; and the Holder of such Note entitled to receive such payment shall thereafter, as an unsecured general creditor, look only to the Issuer and the Guarantors for the payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided that the

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Trustee or any such Paying Agent, before being required to make any such repayment, may, at the expense of the Issuer and the Guarantors, either mail to each Holder affected, at the address shown in the register of the Notes maintained by the Registrar pursuant to Section 2.04, or cause to be published once in a newspaper published in the English language, customarily published each Business Day and of general circulation in the City of New York, New York, a notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing or publication, any unclaimed balance of such moneys then remaining will be repaid to the Issuer (or, if appropriate, the Guarantors). After payment to the Issuer or the Guarantors or the release of any money held in trust by the Issuer or any Guarantors, as the case may be, Holders entitled to the money must look only to the Issuer and the Guarantors for payment as general creditors unless applicable abandoned property law designates another Person.

The Trustee shall promptly and, in any event, no later that five (5) Business Days, pay to the Issuer (or if appropriate, the Guarantors) after request therefore any excess money held in respect of the Notes at such time in excess of the amounts required to pay any of the Issuer’s Obligations then owing with respect to the Notes.

ARTICLE TEN

GUARANTEE OF NOTES AND SECURITY DOCUMENTS

SECTION 10.01. Guarantee.

Subject to the provisions of this Article Ten, each Guarantor, by execution of this Indenture, jointly and severally, unconditionally guarantees (each a “Note Guarantee” and collectively the “Note Guarantees”) to each Holder (i) the due and punctual payment of the principal of and interest on each Note, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal of and interest on the Notes, to the extent lawful, and the due and punctual payment of all other Obligations and due and punctual performance of all obligations of the Issuer to the Holders or the Trustee all in accordance with the terms of such Note, this Indenture, and (ii) in the case of any extension of time of payment or renewal of any Notes or any of such other Obligations with respect to the Notes, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, at stated maturity, by acceleration or otherwise. Each Guarantor, by execution of this Indenture, agrees that its obligations hereunder shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of any such Note or this Indenture, any failure to enforce the provisions of any such Note, this Indenture, any waiver, modification or indulgence granted to the Issuer with respect thereto by the Holder of such Note, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or such Guarantor.

Each Guarantor hereby waives diligence, presentment, demand for payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to any such Note or the Indebtedness evidenced thereby and all demands whatsoever, and covenants that this Note Guarantee will not be discharged as to any such Note except by payment in full of the principal thereof and interest thereon. Each Guarantor hereby agrees that, as between such Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article Six for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Obligations as provided in Article Six, such Obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of this Note Guarantee.

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SECTION 10.02. Execution and Delivery of Guarantee.

To further evidence the Note Guarantee set forth in Section 10.01, each Guarantor hereby agrees that a notation of such Note Guarantee, substantially in the form included in Exhibit C hereto, shall be endorsed on each Note authenticated and delivered by the Trustee and such Note Guarantee shall be executed by either manual or facsimile signature of an Officer or an Officer of a general partner, as the case may be, of each Guarantor. The validity and enforceability of any Note Guarantee shall not be affected by the fact that it is not affixed to any particular Note.

Each of the Guarantors hereby agrees that its Note Guarantee set forth in Section 10.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.

If an officer of a Guarantor whose signature is on this Indenture or a Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which such Note Guarantee is endorsed or at any time thereafter, such Guarantor’s Note Guarantee of such Note shall be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of any Note Guarantee set forth in this Indenture on behalf of the Guarantor.

SECTION 10.03. Limitation of Guarantee.

The obligations of each Guarantor are limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of the Issuer or such other Guarantor under its Note Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of the Issuer or such Guarantor under its Note Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. Each Guarantor that makes a payment or distribution under a Note Guarantee shall be entitled to a contribution from each other Guarantor in a pro rata amount based on the Adjusted Net Assets of each Guarantor. This Note Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the obligations of the Guarantors is rescinded or must otherwise be returned by the Collateral Agent or any other Person upon the insolvency, bankruptcy or reorganization of the Issuer, a Guarantor or otherwise, all as though such payment had not been made.

SECTION 10.04. Release of Guarantor.

Guarantor shall be released from its obligations under its Note Guarantee and its obligations under this Indenture:

(1) in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the Equity Interests of such Guarantor then held by the Restricted Subsidiaries, in each case in accordance with the terms of this Indenture; or

(2) if such Guarantor is designated as an Unrestricted Subsidiary or otherwise ceases to be a Restricted Subsidiary, in each case in accordance with the provisions of this Indenture, upon effectiveness of such designation or when such Guarantor first ceases to be a Restricted Subsidiary, respectively; or

(3) upon satisfaction and discharge of this Indenture or payment in full of the principal of, premium, if any, accrued and unpaid interest on the Notes and all other Obligations that are then due and payable;

and in each such case, the Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to such transactions have been complied with and that such release is authorized and permitted hereunder.

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The Trustee shall execute any documents reasonably requested by the Issuer or a Guarantor in order to evidence the release of such Guarantor from its obligations under its Note Guarantee endorsed on the Notes and under this Article Ten.

SECTION 10.05. Waiver of Subrogation.

Each Guarantor hereby irrevocably waives any claim or other rights which it may now or hereafter acquire against the Issuer that arise from the existence, payment, performance or enforcement of the Issuer’s or such Guarantor’s obligations under its Note Guarantee and this Indenture, including, without limitation, any right of subrogation, reimbursement, exoneration, indemnification, and any right to participate in any claim or remedy of any Holder of Notes against the Issuer, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Issuer, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or Notes on account of such claim or other rights. If any amount shall be paid to the Issuer’s or any Guarantor in violation of the preceding sentence and the Notes shall not have been paid in full, such amount shall have been deemed to have been paid to the Issuer or such Guarantor for the benefit of, and held in trust for the benefit of, the Holders, and shall forthwith be paid to the Trustee for the benefit of such Holders to be credited and applied upon the Notes, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this Section 10.05 is knowingly made in contemplation of such benefits.

SECTION 10.06. Collateral and Security Documents.

(a) The full and punctual payment of principal of and interest on the Notes (including any interest that accrues or would accrue, but for the filing of a case pursuant to the provisions of the Bankruptcy Code, together with any post-petition interest in either case, whether or not such interest is allowed as a claim in bankruptcy) and amounts due hereunder under the Note Guarantees when due, whether on an interest payment date, at maturity, by acceleration, purchase, repurchase, redemption or otherwise, and interest on the overdue principal of, and interest on the Notes, and the performance of all other Obligations of the Issuer and the Guarantors to the Holders, the Collateral Agent or the Trustee under this Indenture, the Security Documents and the Notes shall be secured as provided in the Security Documents, which define the terms of the Liens that secure the Notes, subject to the subordination of only those Liens and security interests as to accounts receivable, inventory, general intangibles related to accounts receivable and inventory, and proceeds thereof of the Parent and the Restricted Subsidiaries to the Working Capital Facility Security, pursuant to the terms of a subordination agreement reasonably satisfactory to the Holders and containing customary terms, including standstill and payment blockage provisions which are subject to customary limitations. The Trustee, the Issuer and the Guarantors each hereby acknowledge and agree that the Collateral Agent holds the Collateral in trust for the benefit of the Trustee and the Holders, in each case pursuant to the terms of the Security Documents. Each Holder (i) consents and agrees to the terms of the Security Documents (including the provisions providing for foreclosure and release of Collateral), as the same may be in effect or may be amended from time to time in accordance with their respective terms and this Indenture and (ii) authorizes and directs the Trustee and Collateral Agent to enter into the Security Documents as applicable. The Issuer shall deliver to the Trustee (if the Trustee is not itself then the Collateral Agent) copies of all documents delivered to the Collateral Agent pursuant to the Security Documents, and will do or cause to be done all such acts and things as may be reasonably required by the next sentence of this Section 10.06 to assure and confirm to the Trustee and the Collateral Agent the security interest in the Collateral contemplated hereby, by the Security Documents or any part thereof, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Notes secured hereby, according to the intent and purposes herein expressed. Each of the Issuer and Parent shall take, and shall cause the Guarantors to take, any and all actions reasonably required to cause the Security Documents to create and maintain, as security for the Notes a valid and enforceable perfected Lien and security interest in and on all of the Collateral, in favor of the Collateral Agent for the benefit of the Trustee and the Holders, and with respect only as to accounts receivable, inventory, general intangibles related to accounts receivable and inventory, and proceeds thereof of the Parent and the Restricted Subsidiaries, junior in priority to any and all Liens and security interests at any time granted in the Collateral to secure the Working Capital Facility Obligations. The

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Issuer and the Guarantors will from time to time promptly pay and discharge all recording or filing fees, charges and taxes relating to the filing or registration of this Indenture and the Security Documents, any amendments thereto and any other instruments of further assurance.

(b) Notwithstanding the foregoing, the Equity Interest and other securities of any Subsidiary of the Parent will constitute Collateral securing the Notes only to the extent that such Equity Interest and securities can secure such Notes, without Rule 3-16 of Regulation S-X (or any other law, rule or regulation) requiring separate financial statements of such Subsidiary to be filed with the SEC (or any other governmental agency);

(1) in the event that Rule 3-16 of Regulation S-X requires or is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any such Subsidiary due to the fact that all or, in the case of a Foreign Subsidiary, up to two-thirds of Subsidiary’s Equity Interest or other securities secure the Notes, then such Equity Interest or other securities shall automatically be deemed not to be part of the Collateral securing the Notes, and, in such event, the Security Documents may be amended or modified, without the consent of any Holder of the Notes, to the extent necessary to release the security interests of the Collateral Agent on the shares of Equity Interest and other securities that are so deemed to no longer constitute part of the Collateral; and

(2) in the event that Rule 3-16 of Regulation S-X is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) all or, in the case of a Foreign Subsidiary, up to two thirds of, such Subsidiary’s Equity Interest and other securities to secure the Notes, without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Equity Interest and other securities of such Subsidiary shall automatically be deemed to be a part of the Collateral securing the Notes, but only if such Subsidiary would not be subject to any such financial statement requirement) and, in such event, the Security Documents may be amended or modified, without the consent of any Holder of the Notes, to the extent necessary to subject to the Liens under the Security Documents such additional Equity Interest and other securities.

Notwithstanding the foregoing, if at any time neither the Parent nor the Issuer is required by law or contract to file reports with the SEC, and in lieu of filing such reports with the SEC shall post its reports on its website in accordance with Section 4.02, then during the period that neither the Parent nor the Issuer is required to file such reports with the SEC, this Section 10.06(b) shall not operate so as to cause the Equity Interest of a Subsidiary to be excluded from the Collateral.

SECTION 10.07. Recordings and Opinions.

To the extent required by TIA § 314(b), the Issuer shall furnish to the Collateral Agent and the Trustee (if the Trustee is not then the Collateral Agent ), on or before the time when the Parent is required to provide annual reports pursuant to Section 4.02 with respect to the preceding fiscal year, an Opinion of Counsel:

(1) stating substantially to the effect that, in the opinion of such counsel, such action has been taken with respect to the recordings, registerings, filings, re-recordings, re-registerings and re-filings of this Indenture, the Security Documents and all financing statements, continuation statements or other instruments of further assurance as is necessary to maintain the Liens of this Indenture or any Security Documents in the Collateral and reciting with respect to the security interests in such Collateral the details of such action or referencing to prior Opinions of Counsel in which such details are given; or

(2) to the effect that, in the opinion of such counsel, no such action is necessary to maintain such Lien under this Indenture and the Security Documents.

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Notwithstanding the foregoing, if the Issuer is not required by TIA §314(b) to provide such Opinion of Counsel, the Issuer shall nevertheless provide the same in a manner such that the Trustee receives it not less than once every two years.

SECTION 10.08. Release of Collateral.

(a) Collateral may be released from the Lien and security interest created by the Security Documents at any time or from time to time in connection with a sale of Collateral in accordance with the terms of Section 4.09 (i) upon the request of the Parent or the Issuer pursuant to an Officers’ Certificate certifying that all terms for release and conditions precedent hereunder and under the applicable Security Document have been met and specifying (A) the identity of the Collateral to be released and (B) the provision of this Indenture that authorizes such release or (ii) on the terms set forth in the Security Documents and pursuant to or in connection with a transaction permitted under this Indenture. To the extent any action on the part of the Trustee is required to effectuate any release of any Lien on any Collateral the Trustee shall release, and shall give any necessary consent, waiver or instruction to the Collateral Agent, to release (at the sole cost and expense of the Issuer) (i) all Collateral that is contributed, sold, leased conveyed, transferred or otherwise disposed of, provided such contribution, sale, lease conveyance, transfer or other disposition is or will be in accordance with the provisions of this Indenture, including without limitation, Section 4.09 of this Indenture and that no Default or Event of Default has occurred and is continuing or would occur immediately following such release; (ii) Collateral which may be released with the consent of Holders pursuant to Article 8 hereof, (iii) all Collateral (except as provided in Article 9 hereof) upon discharge or defeasance of this Indenture in accordance with Article 9 hereof; (iv) all Collateral upon the payment in full of all obligations of the Issuer with respect to principal or interest on the Notes and any and all Obligations outstanding, due and payable under this Indenture at the time the Notes are prepaid in full; and (v) Collateral of a Guarantor whose Guarantee is released pursuant to Section 10.04 hereof. Upon receipt of such Officers’ Certificate, an Opinion of Counsel and any other opinions or certificates required by this Indenture and the TIA, the Trustee shall execute, deliver or acknowledge any necessary or proper instruments of termination, satisfaction or release to evidence the release of any Collateral permitted or required to be released pursuant to this Indenture and the Security Documents.

(b) The Trustee may release Collateral from the Lien and security interest created by this Indenture and the Security Documents upon the sale or disposition of Collateral in accordance with the provisions of this Indenture, including without limitation, Section 4.09 of this Indenture or the subjecting of any Collateral to the Lien securing Indebtedness pursuant to the Trustee’s powers, rights and duties with respect to remedies provided under any of the Security Documents.

(c) The release of any Collateral from the terms of this Indenture and the Security Documents shall not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent the Collateral is released pursuant to the terms hereof. To the extent applicable, the Parent or the Issuer shall cause TIA Section 313(b), relating to reports, and TIA Section 314(d), relating to the release of property or securities from the Lien and security interest of the Security Documents and relating to the substitution therefor of any property or securities to be subjected to the Lien and security interest of the Security Documents, to be complied with. Any certificate or opinion required by TIA Section 314(d) may be made by an Officer except in cases where TIA Section 314(d) requires that such certificate or opinion be made by an independent Person, which Person shall be an engineer, appraiser or other expert selected or approved by the Trustee in the exercise of reasonable care.

(d) No collateral shall be released from the Lien and security interest created by the Security Documents pursuant to the provisions of the Security Documents unless there shall have been delivered to the Trustee the certificates required by this Section 10.08.

SECTION 10.09. Permitted Releases Not to Impair Lien.

The release of any Collateral from the terms hereof and of the Security Documents or the release of, in whole or in part, the Liens created by the Security Documents, will not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent the Collateral or Liens are released pursuant to the applicable Security Documents and the terms of this Indenture, including without limitation this Article 10.

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SECTION 10.10. Certificates of the Trustee.

In the event that the Parent or the Issuer wishes to release Collateral in accordance with this Indenture and the Security Documents at a time when the Trustee is not itself also the Collateral Agent, and the Parent or the Issuer has delivered the certificates and documents required by the Security Documents and Section 10.08 hereof, the Trustee will determine whether the Parent and the Issuer have complied with any and all applicable provisions of this Indenture and the Security Documents and received all documentation required by TIA §314(d) in connection with such release and, based on such determination, will deliver a certificate to the Collateral Agent setting forth such determination.

SECTION 10.11. Suits to Protect the Collateral.

Subject to the provisions of Article 7 hereof, the Trustee in its sole discretion and without the consent of the Holders, on behalf of the Holders, may or may direct the Collateral Agent to take all actions it deems necessary or appropriate in order to:

(1) enforce any of the terms of the Security Documents; and

(2) collect and receive any and all amounts payable in respect of the guaranteed obligations of the Issuer hereunder.

Subject to the provisions of the Security Documents, the Trustee shall have power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts which may be unlawful or in violation of any of the Security Documents or this Indenture, and such suits and proceedings as the Trustee, in its sole discretion, may deem expedient to preserve or protect its interests and the interests of the Holders in the Collateral (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the Liens on the Collateral or be prejudicial to the interests of the Holders or the Trustee).

SECTION 10.12. Authorization of Receipt of Funds by the Trustee Under the Security Documents.

The Trustee is authorized to receive any funds for the benefit of the Holders distributed under the Security Documents, and to make further distributions of such funds to the Holders according to the provisions of this Indenture.

SECTION 10.13. Purchaser Protected.

In no event shall any purchaser in good faith of any property purported to be released hereunder be bound to ascertain the authority of the Collateral Agent or the Trustee to execute the release or to inquire as to the satisfaction of any conditions required by the provisions hereof for the exercise of such authority or to see to the application of any consideration given by such purchaser or other transferee; nor shall any purchaser or other transferee of any property or rights permitted by this Article 10 to be sold be under any obligation to ascertain or inquire into the authority of the Parent or the Issuer to make any such sale or other transfer.

SECTION 10.14. Powers Exercisable by Receiver or Trustee.

In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article 10 upon the Parent or the Issuer with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Parent or the Issuer or of

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any officer or officers thereof required by the provisions of this Article 10; and if the Trustee shall be in the possession of the Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee.

SECTION 10.15. Trustee and Collateral Agent.

(a) The Trustee shall initially act as Collateral Agent and shall be authorized to appoint a co-Collateral Agent as necessary in its sole discretion. In the event the Trustee and the Collateral Agent shall at any time not be the same Person, the Collateral Agent shall take such actions under the Security Documents as are requested by the Trustee and as are not inconsistent with or contrary to the provisions of any Security Document. Except as otherwise explicitly provided herein or in the Security Documents, neither the Collateral Agent nor any of its respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The Collateral Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Collateral Agent nor any of its officers, directors, employees or agents shall be responsible for any act or failure to act hereunder, except for its or their own willful misconduct, gross negligence or bad faith.

(b) Each of the Trustee and the Collateral Agent is authorized and directed to:

(1) enter into the Security Documents;

(2) bind the Holders on the terms as set forth in the Security Documents; and

(3) perform and observe its obligations under the Security Documents; provided, however, that if any of the provisions of the Security Documents limit, qualify or conflict with the duties imposed by the provisions of the TIA, the TIA shall control.

SECTION 10.16. Interest Act (Canada) Compliance.

For the purposes of the Interest Act (Canada), any rate of interest made payable under the terms of this agreement at a rate or percentage (the “Contract Rate”) for any period that is less than a consecutive 12 month period, such as a 360 or 365 day basis, (the “Contract Rate Basis”) is equivalent to the yearly rate or percentage of interest determined by multiplying the Contract Rate by a fraction, the numerator of which is the number of days in the consecutive 12 month period commencing on the date such equivalent rate or percentage is being determined and the denominator of which is the number of days in the Contract Rate Basis.

SECTION 10.17. Judgment Currency.

(a) If, for the purpose of obtaining or enforcing judgment against a Guarantor in any court in any jurisdiction, it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 10.17 referred to as the “Judgment Currency”) an amount due in United States Dollars under this agreement, the conversion shall be made at the rate of exchange prevailing on the Business Day immediately preceding:

(i) the date of actual payment of the amount due, in the case of any proceeding in the courts of the Province of New Brunswick or in the courts of any other jurisdiction that will give effect to such conversion being made on such date; or

(ii) the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the date as of which such conversion is made pursuant to this Section 10.17(a)(ii) being hereinafter in this Section 10.17 referred to as the “Judgment Conversion Date”).

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(b) If, in the case of any proceeding in the court of any jurisdiction referred to in Section 10.17(a)(ii), there is a change in the rate of exchange prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the relevant Guarantor shall pay such additional amount (if any, but in any event not a lesser amount) as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of United States Dollars which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial order at the rate of exchange prevailing on the Judgment Conversion Date.

(c) Any amount due from a Guarantor under the provisions of Section 10.17(b) shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this agreement.

(d) The term “rate of exchange” in this Section 10.17 means the noon rate of exchange of the Judgment Currency into United States Dollars published by The Bank of New York Mellon for the day in question.

ARTICLE ELEVEN

MISCELLANEOUS

SECTION 11.01. Trust Indenture Act Controls.

If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. If any provision of this Indenture modifies any TIA provision that may be so modified, such TIA provision shall be deemed to apply to this Indenture as so modified. If any provision of this Indenture excludes any TIA provision that may be so excluded, such TIA provision shall be excluded from this Indenture.

The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the provisions automatically deemed included unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

SECTION 11.02. Notices.

Except for notice or communications to Holders, any notice or communication shall be given in writing and delivered in person, sent by facsimile, delivered by commercial courier service or mailed by first-class mail, postage prepaid, addressed as follows:

If to the Issuer or any Guarantor:

GSI GROUP CORPORATION

125 Middlesex Turnpike

Bedford, Massachusetts 01730

Attention: Chief Financial Officer

Fax Number: 781-266-5115

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With a copy to:

BROWN RUDNICK LLP

One Financial Center

Boston, Massachusetts 02111

Attention: William R. Baldiga, Esq.

Fax Number: 617-856-8201

If to the Trustee:

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

525 William Penn Place, 38^th Floor

Pittsburgh, Pennsylvania 15259

Attention: Leslie Lockhart

Fax Number: 412-234-7535

Such notices or communications shall be effective when received and shall be sufficiently given if so given within the time prescribed in this Indenture.

The Issuer, the Guarantors or the Trustee by written notice to the others may designate additional or different addresses for subsequent notices or communications.

Any notice or communication mailed to a Holder shall be mailed by first-class mail, postage prepaid, to the Holder’s address shown on the register kept by the Registrar.

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication to a Holder is mailed in the manner provided above, it shall be deemed duly given, whether or not the addressee receives it.

In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice as required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice.

SECTION 11.03. Communications by Holders with Other Holders.

Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

SECTION 11.04. Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Issuer or any Guarantor to the Trustee to take any action or refrain from taking any action under this Indenture (other than the authentication of the Notes on the Initial Issuance Date), the Issuer or such Guarantor shall furnish to the Trustee:

(1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05) stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

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SECTION 11.05. Statements Required in Certificate and Opinion.

Each certificate and opinion with respect to compliance by or on behalf of the Issuer or any Guarantor with a condition or covenant provided for in this Indenture (other than the Officers’ Certificate required by Section 3.01 or 4.04) shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture and shall include:

(1) a statement that the Person making such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3) a statement that, in the opinion of such Person, it or he has made such examination or investigation as is necessary to enable it or him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4) a statement as to whether or not, in the opinion of such Person, such covenant or condition has been complied with; provided, however, that with respect to such matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or certificate of public officials, and provided further that an Opinion of Counsel may have customary qualifications for opinions of the type required.

SECTION 11.06. Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or meetings of Holders. The Registrar and Paying Agent may make reasonable rules for their functions.

SECTION 11.07. Business Days; Legal Holidays.

A “Business Day” is a day that is not a Legal Holiday. A “Legal Holiday” is a Saturday, a Sunday or other day on which (i) commercial banks in the City of New York are authorized or required by law to close or (ii) the New York Stock Exchange is not open for trading. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

SECTION 11.08. Governing Law and Submission to Jurisdiction.

This Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York, as applied to contracts made and performed within the State of New York.

Each of the Issuer and the Guarantors hereby (i) irrevocably agrees that any legal suit, action or proceeding arising under or in connection with this Indenture or the transactions contemplated hereby or the Notes or the Note Guarantees may be instituted in any state or federal court in New York, New York and, to the fullest extent permitted by law, (ii) irrevocably waives any objection which any of them may now or hereinafter have to the laying of venue of any such proceeding, (iii) irrevocably waives any objection based on the absence of a necessary or indispensable party in any such proceeding and (iv) irrevocably accepts and submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding.

SECTION 11.09. No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret another indenture, loan, security or debt agreement of the Parent, the Issuer or any Subsidiary thereof. No such indenture, loan, security or debt agreement may be used to interpret this Indenture.

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SECTION 11.10. No Recourse Against Others.

No recourse for the payment of the principal of or premium, if any, or interest, on any of the Notes, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer or any Guarantor in this Indenture or in any supplemental indenture, or in any of the Notes, or because of the creation of any Indebtedness represented thereby, shall be had against any stockholder, officer, director or employee, as such, past, present or future, of the Issuer or any Guarantor or of any successor corporation of the Issuer or any Guarantor or against the property or assets of any such stockholder, officer, employee or director, either directly or through the Issuer or any Guarantor, or any successor corporation of the Issuer or any Guarantor, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the Notes are solely obligations of the Issuer and the Guarantors, and that no such personal liability whatever shall attach to, or is or shall be incurred by, any stockholder, officer, employee or director of the Issuer or any Guarantor, or any successor corporation thereof, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or the Notes or implied therefrom, and that any and all such personal liability of, and any and all claims against every stockholder, officer, employee and director, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of the Notes. It is understood that this limitation on recourse is made expressly for the benefit of any such shareholder, employee, officer or director and may be enforced by any of them.

SECTION 11.11. Successors.

All agreements of the Issuer and the Guarantors in this Indenture and the Notes shall bind their respective successors. All agreements of each of the Trustee, any additional trustee and any Paying Agents in this Indenture shall bind its successor.

SECTION 11.12. Multiple Counterparts.

The parties may sign multiple counterparts of this Indenture. Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement.

SECTION 11.13. Table of Contents, Headings, Etc.

The table of contents, cross-reference Section and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

SECTION 11.14. Separability.

Each provision of this Indenture shall be considered separable and if for any reason any provision which is not essential to the effectuation of the basic purpose of this Indenture or the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 11.15. Acts of Holders. Record Dates.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as an “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section.

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(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee reasonably deems sufficient.

(c) The Issuer may, in the circumstances permitted by the Trust Indenture Act, fix any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders. If not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 2.06) prior to such first solicitation or vote, as the case may be. With regard to any record date, only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action.

(d) The ownership of the Notes shall be proved by the register of the Notes.

(e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Notes shall bind every future Holder of the same Notes and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Notes.

SECTION 11.16. Failure or Indulgence Not Waiver.

No failure or delay on the part of any Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

SECTION 11.17. Waiver of Jury Trial.

EACH OF THE ISSUER, THE GUARANTOR AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.

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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed all as of the date and year first written above.

GSI GROUP CORPORATION As the Issuer
By:
	Name:	Michael Katzenstein
	Title:	Chief Restructuring Officer
GSI GROUP INC. As a Guarantor
By:
	Name:	Michael Katzenstein
	Title:	Chief Restructuring Officer
MES INTERNATIONAL INC. as a Guarantor
By:
	Name:	Michael Katzenstein
	Title:	Chief Restructuring Officer
EXCEL TECHNOLOGY, INC. As a Guarantor
By:
	Name:	Michael Katzenstein
	Title:	President

[Signature Page to Indenture]

CAMBRIDGE TECHNOLOGY, INC., as a Guarantor
By:
	Name:	Anthony Bellantuoni
	Title:	Director
CONTINUUM ELECTRO-OPTICS, INC., as a Guarantor
By:
	Name:	Anthony Bellantuoni
	Title:	Director
CONTROL LASER CORPORATION (D/B/A BAUBLYS CONTROL LASER), as a Guarantor
By:
	Name:	Anthony Bellantuoni
	Title:	Director
THE OPTICAL CORPORATION, as a Guarantor
By:
	Name:	Anthony Bellantuoni
	Title:	Director
PHOTO RESEARCH, INC., as a Guarantor
By:
	Name:	Anthony Bellantuoni
	Title:	Director
QUANTRONIX CORPORATION, as a Guarantor
By:
	Name:	Anthony Bellantuoni
	Title:	Director
SYNRAD, INC., as a Guarantor
By:
	Name:	Anthony Bellantuoni
	Title:	Director
MICROE SYSTEMS CORP. as a Guarantor
By:
	Name:	Anthony Bellantuoni
	Title:	Director

[Signature Page to Indenture]

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:
	Name:	Leslie Lockhart
	Title:	Senior Associate

[Signature Page to Indenture]

EXHIBIT A

FORM OF NOTE

CUSIP 362524 AC4

GSI GROUP CORPORATION

   No. 1 $107,040,000

12.25% SENIOR SECURED PIK ELECTION NOTE DUE 2014

GSI GROUP CORPORATION, a Michigan corporation (the “Issuer”), for value received, promises to pay to CEDE & CO. or registered assigns the principal sum of $107,040,000 dollars on January 15, 2014.

Interest Payment Dates: February 15, May 15, August 15 and November 15.

Record Dates: February 1, May 1, August 1 and November 1.

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place.

IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its duly authorized officers.

GSI GROUP CORPORATION
By:
	Name:
	Title:
By:
	Name:
	Title:

Dated: Certificate of Authentication

This is one of the 12.25% Senior Secured PIK Election Notes due 2014 referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:
	Name:
	Title:

Dated:

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[FORM OF REVERSE OF NOTE]

GSI GROUP CORPORATION

12.25% SENIOR SECURED PIK ELECTION NOTE DUE 2014

[THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES AND THE AMOUNT OF OID MAY VARY IN FUTURE TAXABLE PERIODS DEPENDING UPON WHETHER INTEREST PAYMENTS ARE PAID IN CASH OR IN KIND. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED BY CONTACTING: GSI Group Corporation, 125 Middlesex Turnpike, Bedford, Massachusetts 01730 Attention: Principal Financial Officer.]

THIS NOTE HAS BEEN ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SECTION 1145(A) OF THE BANKRUPTCY REFORM ACT OF 1978, AS AMENDED (THE “BANKRUPTCY CODE”). THE NOTE MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE SECURITIES ACT.

NO NOTE HELD BY AN UNDERWRITER OR AN AFFILIATE OF THE COMPANY MAY BE SOLD, EXCHANGED OR OTHERWISE TRANSFERRED IN VIOLATION OF THE SECURITIES ACT OR STATE SECURITIES LAWS. ACCORDINGLY, THE ISSUER RECOMMENDS THAT POTENTIAL RECIPIENTS OF NOTES CONSULT THEIR OWN COUNSEL CONCERNING WHETHER THEY MAY FREELY TRADE SUCH NOTES.

1. Interest. GSI GROUP CORPORATION, a Michigan corporation (the “Issuer”), promises to pay, until the principal hereof is paid or made available for payment, interest on the principal amount set forth on the face hereof at a rate per annum set forth below. Interest hereon will accrue from and including the most recent date to which interest has been paid or, if no interest has been paid, from and including July     , 2010 to but excluding the date on which interest is paid. Interest shall be payable in arrears on each February 15, May 15, August 15 and November 15 commencing on August 15, 2010) (each, an “Interest Payment Date” and collectively, the “Interest Payment Dates”). Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Issuer shall pay interest on overdue principal and on overdue interest (to the full extent permitted by law) at a rate equal to the Default Rate.

The Issuer, may, at its option, elect to pay interest on this Note (i) in cash (“Cash Interest”), or (ii) by increasing the principal amount of this Note or by issuing PIK Notes (“PIK Interest”); provided, however, that the Issuer may not make a PIK Payment if the Fixed Charge Coverage Ratio as at the last day of the One Full Fiscal Quarter of the Issuer immediately preceding the relevant Interest Payment Date is greater than 1.75:1.00. At any time after the occurrence and during the continuance of an Event of Default, this Note shall bear interest at a rate per annum equal to the rate that would otherwise be applicable thereto pursuant to the provisions of this Paragraph 1 plus 2% per annum (such interest, the “Default Interest “), which shall be payable in cash quarterly in arrears on each Interest Payment Date. At any time after the occurrence and during the continuance of a Reporting Default, this Note shall bear interest at a rate per annum equal to the rate that would otherwise be applicable thereto pursuant to the provisions of this Paragraph 1 (including default interest to the extent, if any, applicable in connection with an Event of Default) plus 2% per annum (such additional 2% interest, the “Reporting Default Interest”), which Reporting Default Interest shall be payable by PIK Payment on each Interest Payment Date. Interest shall be payable as set forth in this Paragraph 1 to the person in whose name the Notes are registered at the close of business on the regular record date for such interest installment, which shall be the fifteenth day, whether or not a Business Day, prior to the relevant Interest Payment Date. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year comprised of twelve 30-day months.

Cash Interest on this Note will accrue at the rate of 12.25% per annum. PIK Interest on this Note will accrue at the rate of 13.00% per annum and be payable by increasing the principal amount of this Note by an amount equal to the amount of PIK Interest for the applicable interest period (rounded up to the nearest $1,000). Following an increase in the principal amount of this Note as a result of a PIK Payment, this Note will bear interest on such increased principal amount from and after the date of such PIK Payment.

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All PIK Notes issued pursuant to a PIK Payment will mature on January 15, 2014 and will be governed by, and subject to the terms, provisions and conditions of, the Indenture and shall have the same rights and benefits as the Notes issued on the Initial Issue Date.

2. Interest Election. The Issuer must elect the form of interest payment with respect to each interest period by delivering a notice to the Trustee prior to the beginning of each interest period. For any period on which the Issuer wishes to make PIK Payment, the Issuer shall include in such notice to the Trustee an Officers’ Certificate specifying the Issuer’s Fixed Charge Coverage Ratio in accordance with Paragraph 1 above. The Trustee shall promptly deliver a corresponding notice to the Holder of this Note. In the absence of such an election for any interest period, interest on this Note will be payable in the form of the interest payment for the prior interest period (to the extent permitted by Paragraph 1). Interest for the first period commencing on the Initial Issue Date shall be payable in cash.

Notwithstanding anything to the contrary, in connection with any redemption of the Notes under Sections 3.01, 4.07 and 4.09 of the Indenture, the payment of accrued interest shall be made solely in cash.

3. Method of Payment. The Issuer will pay interest hereon (except defaulted interest) to the Persons who are registered Holders at the close of business on February 1, May 1, August 1 or November 1 next preceding the interest payment date (whether or not a Business Day). Holders must surrender Notes to a Paying Agent to collect principal payments. The Issuer will pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Cash Interest may be paid by check mailed to the Holder entitled thereto at the address indicated on the register maintained by the Registrar for the Notes, provided, however, that payments on a certificated Note will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). PIK interest shall be considered paid on the date due if the Trustee is directed on or prior to such date to issue PIK Notes or increase the principal amount of the applicable Global Notes, in each case in an amount equal to the amount of the applicable PIK Interest.

4. Paying Agent and Registrar. Initially, The Bank of New York Mellon Trust Company, N.A. (the “Trustee”) will act as a Paying Agent and Registrar. The Issuer may appoint and change any Paying Agent or Registrar or co-Registrar without notice. The Issuer or any of its Affiliates may act as Paying Agent or Registrar.

5. Indenture and Security Documents. The Issuer issued the Notes under an Indenture dated as of July     , 2010 (the “Indenture”) among the Issuer, the Guarantors (as defined in the Indenture) and the Trustee. This is one of an issue of Notes of the Issuer issued, or to be issued, under the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb), as amended from time to time. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of them. Capitalized and certain other terms used herein and not otherwise defined have the meanings set forth in the Indenture. The Notes are secured by the Collateral pursuant to the Security Documents and may be released pursuant to the terms thereof, subject to the terms of the Indenture. The Security Documents govern the rights in and to the Collateral of the Trustee and the Holders. Without limiting the foregoing, each Holder, by accepting this Note, authorizes the Trustee on behalf of and for the benefit of each Holder, to be the agent for and representative of each Holder with respect to the Collateral and the Security Documents and authorizes the Trustee to appoint and direct the Collateral Agent (as defined in the Indenture) to be the agent for and representative of each Holder with respect to the Collateral and the Security Documents.

6. [Intentionally Omitted]

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7. Optional Redemption.

(a) The Issuer, at its option, may at any time redeem up to 100% of the aggregate principal amount of the Notes (including any Notes issued after the Initial Issue Date), in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest thereon, if any, to, but not including, the Redemption Date.

(b) In the event of a redemption of fewer than all of the Notes, the Trustee shall select the Notes to be redeemed in compliance with the requirements of the principal national securities exchange, if any, while such Notes are listed, or if such Notes are not then listed on a national securities exchange, on a pro rata basis, by lot or in such other manner as the Trustee shall deem fair and equitable. The Notes will be redeemable in whole or in part upon not less than 30 nor more than 60 days’ prior written notice, mailed by first-class mail to a Holder’s last address as it shall appear on the register maintained by the Registrar of the Notes. On and after any redemption date, interest will cease to accrue on the Notes or portions thereof called for redemption unless the Issuer shall fail to redeem any such Note.

8. Subordination. All Obligations on, or relating to, the Notes and the Guarantees will be subordinated in right of payment, in the manner and to the extent set forth in the Indenture, to the prior payment in full in cash or Cash Equivalents of Working Capital Facility Obligations, whether outstanding on the date of the Indenture or thereafter created, incurred, assumed or guaranteed. Each Holder by his acceptance hereof agrees to be bound by such provisions and authorizes and expressly directs the Trustee, on his behalf, to take such action as may be necessary or appropriate to effectuate the subordination provided for in the Indenture and appoints the Trustee his attorney-in-fact for such purposes.

9. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at his registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a satisfaction and discharge of the Indenture. On and after the Redemption Date, unless the Issuer defaults in making the redemption payment, interest ceases to accrue on Notes or portions thereof called for redemption.

10. Offers To Purchase. The Indenture provides that upon the occurrence of an Asset Sale and in connection with a Working Capital Facility and subject to further limitations contained therein, the Parent or the Issuer shall make an offer to purchase outstanding Notes in accordance with the procedures set forth in the Indenture.

11. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay to it any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes or portion of a Note selected for redemption, or register the transfer of or exchange any Notes for a period of 15 days before a mailing of notice of redemption.

12. Persons Deemed Owners. The registered Holder of this Note may be treated as the owner of this Note for all purposes.

13. Unclaimed Money. If money for the payment of principal or interest remains unclaimed for two years, the Trustee will pay the money back to the Issuer at its written request. After that, Holders entitled to the money must look to the Issuer for payment as general creditors unless an “abandoned property” law designates another Person.

14. Amendment, Supplement, Waiver, Etc. The Issuer, the Guarantors and the Trustee (if a party thereto) may, without the consent of the Holders of any outstanding Notes, amend, waive or supplement the Indenture or the Notes for certain specified purposes, including, among other things, curing ambiguities, defects or inconsistencies, maintaining the qualification of the Indenture under the Trust Indenture Act of 1939, as amended, and making any change that does not materially and adversely affect the rights of any Holder. Other amendments and modifications of the Indenture or the Notes may be made by the Issuer, the

A-4

Guarantors and the Trustee with the consent of the Holders of not less than a majority of the aggregate principal amount of the outstanding Notes[, subject to certain exceptions requiring the consent of the Holders of the particular Notes to be affected].

15. Successor Corporation. When a successor corporation assumes all the obligations of its predecessor under the Notes and the Indenture and the transaction complies with the terms of Article Five of the Indenture, the predecessor corporation will, except as provided in Article Five, be released from those obligations.

16. Defaults and Remedies. Events of Default are set forth in the Indenture. Subject to certain limitations in the Indenture, if an Event of Default (other than an Event of Default specified in Section 6.01(7) or (8)) occurs and is continuing, the Trustee or the Holders of not less than 25% in aggregate principal amount of the outstanding Notes may, by written notice to the Trustee and the Issuer, and the Trustee upon the request of the Holders of not less than 25% in aggregate principal amount of the outstanding Notes shall, declare all principal of and accrued interest (in addition to the Default Rate) on all Notes to be immediately due and payable and such amounts shall become immediately due and payable. If an Event of Default specified in Section 6.01(7) or (8) occurs, the principal amount of and interest on all Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Notes. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing default (except a default in payment of principal, premium, if any, or interest on the Notes or a default in the observance or performance of any of the obligations of the Issuer under Article Five of the Indenture) if it determines that withholding notice is in their best interests.

17. Trustee Dealings with Issuer. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuer or its Affiliates, and may otherwise deal with the Issuer or its Affiliates, as if it were not Trustee.

18. Discharge. The Issuer’s obligations pursuant to the Indenture will be discharged, except for obligations pursuant to certain sections thereof, subject to the terms of the Indenture, upon the payment of all the Notes or upon the irrevocable deposit with the Trustee of United States dollars or U.S. Government Obligations sufficient to pay when due principal of and interest on the Notes to maturity or redemption, as the case may be.

19. Guarantees and Security. The Note will be entitled to the benefits of certain Note Guarantees made for the benefit of the Holders and security interest in Collateral. Reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and obligations thereunder of the Guarantors, the Trustee and the Holders.

20. Authentication. This Note shall not be valid until the Trustee signs the certificate of authentication on the other side of this Note.

21. Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, as applied to contracts made and performed within the State of New York. The Trustee, the Issuer, the Guarantors and the Holders agree to submit to the jurisdiction of the courts of the State of New York in any action or proceeding arising out of or relating to the Indenture or the Notes.

22. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

A-5

The Issuer will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

GSI GROUP CORPORATION

125 Middlesex Turnpike

Bedford, Massachusetts 01730

Attention: Chief Financial Officer

A-6

ASSIGNMENT

I or we assign and transfer this Note to:

(Insert assignee’s Social Security or tax I.D. number)

(Print or type name, address and zip code of assignee)

and irrevocably appoint:

Agent to transfer this Note on the books of the Issuer. The Agent may substitute another to act for him.

Date:	Your Signature:
		(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee:

SIGNATURE GUARANTEE

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

A-7

OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have all or any part of this Note purchased by the Issuer pursuant to Section 4.07 or Section 4.09, check the appropriate box:

¨    Section 4.07                     ¨    Section 4.09

If you want to have only part of the Note purchased by the Issuer pursuant to Section 4.07 or Section 4.09 of the Indenture, state the amount you elect to have purchased:

$                                                 

(multiple of $1,000)

Date:                                          

Your Signature:
	(Sign exactly as your name appears on the face of this Note)

Signature Guaranteed

SIGNATURE GUARANTEE

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

A-8

EXHIBIT B

FORM OF LEGEND FOR GLOBAL NOTE

Any Global Note authenticated and delivered hereunder shall bear a legend in substantially the following form:

This Note is a Global Note within the meaning of the Indenture dated as of July     , 2010, relating to the Notes and is registered in the name of a depository or a nominee of a depository. This Note is not exchangeable for Notes registered in the name of a person other than the depository or its nominee except in the limited circumstances described in the Indenture, and no transfer of this Note (other than a transfer of this Note as a whole by the depository to a nominee of the depository or by a nominee of the depository to the depository or another nominee of the depository) may be registered except in the limited circumstances described in the Indenture.

Unless this certificate is presented by an authorized representative of the Depository Trust Company (a New York corporation) (“DTC”) to the issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of CEDE & CO. or in such other name as it requested by an authorized representative of DTC (and any payment is made to CEDE & CO. or such other entity as is requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any Person is wrongful inasmuch as the registered owner hereof, CEDE & CO., has an interest herein.

B-1

EXHIBIT C

NOTATION OF GUARANTEE

Each of the undersigned (the “Guarantors”) hereby jointly and severally unconditionally guarantees (this “Guarantee”), to the extent set forth in the Indenture dated as of July     , 2010 by and among GSI Group Corporation, as issuer, the Guarantors, as guarantors, and The Bank of New York Mellon Trust Company, N.A., as Trustee (as amended, restated or supplemented from time to time, the “Indenture”), and subject to the provisions of the Indenture, (a) the due and punctual payment of the principal of, and premium, if any, and interest on the Notes, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on overdue principal of, and premium and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Issuer to the Holders or the Trustee, all in accordance with the terms set forth in Article Ten of the Indenture, and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.

The obligations of the Guarantors to the Holders and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article Ten of the Indenture, and reference is hereby made to the Indenture for the precise terms and limitations of this Guarantee. Each Holder of the Note to which this Guarantee is endorsed, by accepting such Note, agrees to and shall be bound by such provisions.

[Signatures on Following Pages]

D-1

IN WITNESS WHEREOF, each of the Guarantors has caused this Guarantee to be signed by a duly authorized officer.

GSI GROUP INC.
By:
	Name:	Michael Katzenstein
	Title:	Chief Restructuring Officer
GSI GROUP CORPORATION
By:
	Name:	Michael Katzenstein
	Title:	Chief Restructuring Officer
EXCEL TECHNOLOGY, INC.
By:
	Name:	Michael Katzenstein
	Title:	President
CAMBRIDGE TECHNOLOGY, INC.
By:
	Name:	Anthony Bellantuoni
	Title:	Director
CONTINUUM ELECTRO-OPTICS, INC.
By:
	Name:	Anthony Bellantuoni
	Title:	Director
CONTROL LASER CORPORATION (D/B/A BAUBLYS CONTROL LASER)
By:
	Name:	Anthony Bellantuoni
	Title:	Director
THE OPTICAL CORPORATION
By:
	Name:	Anthony Bellantuoni
	Title:	Director

D-1

PHOTO RESEARCH, INC.
By:
	Name:	Anthony Bellantuoni
	Title:	Director
QUANTRONIX CORPORATION
By:
	Name:	Anthony Bellantuoni
	Title:	Director
SYNRAD, INC.
By:
	Name:	Anthony Bellantuoni
	Title:	Director
MICROE SYSTEMS CORP.
By:
	Name:	Anthony Bellantuoni
	Title:	Director
MES INTERNATIONAL INC.
By:
	Name:	Michael Katzenstein
	Title:	Chief Restructuring Officer

D-1

EX-99.T3E.1

Exhibit 99T3E-1

CAUTIONARY NOTE REGARDING INFORMATION IN EXHIBIT T3E-1

This Exhibit T3E-1 to the Application for Qualification of Indenture on Form T-3/A (File No. 022-28929) of GSI Group Corporation is comprised of that certain Disclosure Statement Relating to the Joint Chapter 11 Plan of Reorganization (the “Original Plan”) for MES International, Inc., GSI Group Inc. and GSI Group Corporation (collectively, the “Debtors”), which was filed with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on November 20, 2009 (the “Disclosure Statement”). The Disclosure Statement contains certain information relating to (i) the Original Plan and (ii) the Debtors, including certain consolidated financial projections and footnotes related thereto for GSI Group Inc. and its subsidiaries (the “Projections”). The Projections were prepared by the Debtors in good faith using assumptions believed to be reasonable at the time of preparation. A significant number of assumptions about the operations of the business after emergence from bankruptcy were based, in part, on economic, competitive, and general business conditions prevailing at the time the Projections were developed. Further, the Projections were prepared on the basis that a debt restructuring would occur on substantially the terms set forth in the Original Plan, and the Disclosure Statement included disclosures on the terms of the Original Plan. The Original Plan, however, has been substantially modified since the filing of the Original Plan and Disclosure Statement with the Bankruptcy Court on November 20, 2009. The final modification of the Original Plan is set forth in that certain Final Fourth Modified Joint Chapter 11 Plan of Reorganization for the Debtors, which was filed with the Bankruptcy Court on May 24, 2010, and was supplemented and confirmed on May 27, 2010 (the “Final Plan”). As a result, it can be expected that some or all of the assumptions in the Projections will not be realized and that actual results will vary from the Projections. Such variations may be material and may increase over time. In light of the foregoing, readers are cautioned not to place undue reliance on the Projections set forth in the Disclosure Statement and to instead review the Final Plan for a description of the distributions and transactions contemplated by the Final Plan.

The Debtors have since prepared updated consolidated financial projections and footnotes related thereto for GSI Group Inc. and its subsidiaries (the “Updated Projections”), which were filed on June 4, 2010, with the Securities and Exchange Commission (“SEC”) on that certain Current Report on Form 8-K of GSI Group Inc. On June 30, 2010, the Debtors also issued a press release that, among other matters, reiterated and provided further detail of its previous estimate of second quarter 2010 revenues and adjusted EBITDA (the “Press Release”). The Press Release was filed with the SEC on July 1, 2010, as Exhibit 99.1 to that certain Current Report on Form 8-K of GSI Group Inc. The Updated Projections and the Press Release are subject to the risks and uncertainties set forth therein.

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:	)	Chapter 11
	)
MES INTERNATIONAL, INC., et al., 1	)	Case No. 09-14109 (PJW)
	)
Debtors.	)	Jointly Administered
	)
	)
	)

DISCLOSURE STATEMENT RELATING TO THE FIRST MODIFIED JOINT

CHAPTER 11 PLAN OF REORGANIZATION FOR MES INTERNATIONAL, INC., GSI

GROUP INC. AND GSI GROUP CORPORATION

Dated: January 8, 2010	BROWN RUDNICK LLP Co-Counsel to Debtors-in-Possession William R. Baldiga, Esq. One Financial Center Boston, Massachusetts 02111 Tel: (617) 856-8200 Fax: (617) 856-8201
	SAUL EWING LLP Co-Counsel to Debtors-in-Possession Mark Minuti, Esq. 222 Delaware Avenue, Suite 1200 P.O. Box 1266 Wilmington, DE 19899 (302) 421-6840 (office) (302) 421-5873 (fax)

¹ The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: MES International, Inc. (1964); GSI Group Inc. (0412); and GSI Group Corporation (9358). The Debtors’ headquarters is located at 125 Middlesex Turnpike, Bedford, MA 01730.

TABLE OF CONTENTS

I.	NOTICE TO HOLDERS OF CLAIMS AND EQUITY INTERESTS			2
II.	EXPLANATION OF CHAPTER 11			4
	A.	Overview of Chapter 11		4
	B.	Plan of Reorganization		5
	C.	Confirmation of a Plan of Reorganization		6
III.	OVERVIEW OF THE PLAN			7
	A.	Summary of the Terms of the Plan		7
	B.	Summary of Distributions Under the Plan		8
IV.	GENERAL INFORMATION			14
	A.	Overview of the Debtors		14
	B.	Business and Properties of the Debtors		14
		1.	Overview	14
		2.	Precision Technology Segment	15
		3.	Semiconductor Systems Segment	16
		4.	Manufacturing	17
		5.	Properties	17
		6.	Marketing, Sales and Distribution	19
		7.	Sources of Supply	20
		8.	Patents and Intellectual Property	20
		9.	Human Resources	20
		10.	Government Regulation	21
		11.	Management	21
	C.	Prepetition Financing		24
	D.	Events Leading to the Commencement of the Chapter 11 Cases		24
		1.	Reasons for the Company’s Delay in Filings Periodic Reports, Revenue Recognition Issues and Audit Committee Review	24
		2.	Shareholder Class Action	26
		3.	NASDAQ Proceedings	27
		4.	Discussions with Noteholders	29
		5.	Debtors’ Ability to Meet their Obligations Arising Prior to and Following the Filing of the Plan	30
V.	FINANCIAL PROJECTIONS AND ASSUMPTIONS			31
	A.	Purpose and Objectives		31
	B.	Pro Forma Financial Projections		31
		1.	Responsibility For and Purpose of the Projections	31
		2.	Inherent Uncertainty of the Projections	32
		3.	Special Note Regarding Forward Looking Statements	33
VI.	THE REORGANIZATION CASES			33
	A.	Commencement of the Chapter 11 Cases		33
	B.	Continuation of Business after the Petition Date		33
		1.	First Day Motions	34
	C.	Representation of the Debtors		38
	D.	Matters Relating to Unexpired Leases and Executory Contracts		38
	E.	Exclusivity Periods		39
	F.	Schedules; Bar Dates; Claims Objections and Estimated Amount of Claims		39

		1.	Schedules and Bar Dates	39
		2.	Estimation of Claims	40
	G.	Significant Motions During Chapter 11 Cases		40
VII.	THE CHAPTER 11 PLAN			40
	A.	Classification and Treatment of Claims and Equity Interests		40
		1.	Administrative Claims and Tax Claims	40
		2.	Debtor Claims and Equity Interests	42
	B.	Means for Implementation of the Plan		45
		1.	Operations between the Confirmation Date and the Effective Date	45
		2.	Reporting Requirements Under Exchange Act, Listing on Securities Exchange and Registration Rights	45
		3.	Reorganized Holdings Constituent Documents	45
		4.	New Corporate Structure for Reorganized Holdings	45
		5.	Cancellation of Holdings Equity Interests, GSI UK Note and Senior Notes	46
		6.	Other General Corporate Matters	46
		7.	Continued Corporate Existence of the Debtors	47
		8.	Re-Vesting of Assets	47
		9.	Management	47
		10.	Boards of Directors	47
		11.	Officers	48
		12.	Management Incentive Plan	48
		13.	Causes of Action	48
		14.	Appointment of the Disbursing Agent	49
		15.	Sources of Cash for Plan Distributions	49
		16.	Releases by the Debtors	49
		17.	Releases by Creditors and Equity Security Holders	49
		18.	Fixing of Principal Balance of GSI UK Note	50
	C.	Securities to Be Issued Under the Plan		50
		1.	Authorized Plan Securities	51
		2.	New Common Shares	51
		3.	New Senior Secured Notes	51
		4.	The New Warrants	52
	D.	Securities Law Matters in Implementing the Plan		52
		1.	Plan Securities Issued Pursuant to Section 1145 of the Bankruptcy Code	52
		2.	SEC Reporting Requirements	54
	E.	Plan Distribution Provisions		54
		1.	Plan Distributions	54
		2.	Timing of Plan Distributions	55
		3.	Address for Delivery of Plan Distributions/Unclaimed Plan Distributions	55
		4.	De Minimis Plan Distributions	55
		5.	Time Bar to Cash Payments	55
		6.	Manner of Payment under the Plan	55
		7.	Expenses Incurred on or after the Effective Date and Claims of the Disbursing Agent	56
		8.	Fractional Plan Distributions	56
		9.	Special Plan Distribution Provisions for Equity Interests	57

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10. Surrender and Cancellation of Instruments	57
F.      Procedures For Resolving And Treating Contested Claims	58
1.      Objection Deadline	58
2.      Prosecution of Contested Claims	58
3.      Claims Settlement	58
4.      Entitlement to Plan Distributions Upon Allowance	58
5.      Estimation of Claims	58
G.     Conditions Precedent to Confirmation of the Plan and the Occurrence of the Effective Date	59
1.      Conditions Precedent to Confirmation	59
2.      Conditions Precedent to the Occurrence of the Effective Date	59
3.      Waiver of Conditions	60
4.      Effect of Non-Occurrence of the Effective Date	60
H.     The Disbursing Agent	60
1.      Powers and Duties	60
2.      Plan Distributions	61
3.      Exculpation	61
I.       Treatment Of Executory Contracts And Unexpired Leases	61
2.      Cure	63
3.      Claims Arising from Rejection, Expiration or Termination	63
J.      Retention of Jurisdiction	64
K.     Other Material Provisions of the Plan	65
1.      Payment of Statutory Fees	65
2.      Satisfaction of Claims	66
3.      Special Provisions Regarding Insured Claims	66
4.      Subrogation	66
5.      Third Party Agreements; Subordination	67
6.      Exculpation	67
7.      Discharge of Liabilities	67
8.      Discharge of Debtors	68
9.      Governing Law	68
10.    Interest and Attorneys’ Fees	68
11.    Modification of the Plan	69
12.    Revocation of Plan	69
13.    Setoff Rights	70
14.    Rates; Currency	70
15.    Injunctions	70
16.    Binding Effect	71
17.    Severability	71
18.    No Admissions	71
VIII. RISK FACTORS	71
A.     General Considerations	72
B.     Termination Rights Under Plan Support Agreement	72
C.     Certain Bankruptcy Considerations	73
D.     Inherent Uncertainty of Financial Projections	73
E.     Claims Estimations	73

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IX.	CONFIRMATIONAND CONSUMMATION PROCEDURES	74
A.     Overview		74
B.     Confirmation of the Plan		75
1.      Elements of Section 1129 of the Bankruptcy Code		75
2.      Acceptance		77
3.      Best Interests Test		77
4.      Feasibility		79
C.     Cramdown		79
1.      No Unfair Discrimination		79
2.      Fair and Equitable Test		80
D.     Effect of Confirmation		80
X.	MANAGEMENT OF THE REORGANIZED DEBTORS	81
XI.	CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS	81
A.     Tax Consequences to the GSI		82
1.      Cancellation of Debt (“COD”) Income		82
2.      Limitation on Interest Deductions – Section 163(j)		83
3.      Section 382 Limitation		84
4.      Holdings’ Status as a Non-U.S. Corporation		85
5.      Alternative Minimum Tax (“AMT”)		86
6.      Corporate Equity Reduction Transaction		86
B. Tax Consequences to the Exchanging Senior Noteholders		86
1.      Exchange of the Senior Notes for New Senior Secured Notes, New Common Shares and the Cash Note Payment		86
2.      Original Issue Discount (“OID”)		88
C.     Holdings Shareholders Resident in United States		89
D.     Backup Withholding		90
XII.	CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS	90
XIII.	ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN	94
A.     Liquidation Under Chapter 7 of the Bankruptcy Code		95
B.     Alternative Plans of Reorganization		95
XIV.	CONCLUSION	96

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SCHEDULES AND EXHIBITS

SCHEDULE 1 – List of Defined Terms

SCHEDULE 2 – Schedule of Rejected Executory Contracts and Unexpired Leases (to be provided at a later date)

SCHEDULE 3 – Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases (to be provided at a later date)

EXHIBIT A – Joint Chapter 11 Plan of Reorganization

EXHIBIT B – Disclosure Statement Order (to be provided at a later date)

EXHIBIT C – Projections

EXHIBIT D – Liquidation Analysis

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INTRODUCTION

THE BANKRUPTCY COURT HAS APPROVED THE DISCLOSURE STATEMENT RELATING TO THE FIRST MODIFIED JOINT CHAPTER 11 PLAN OF REORGANIZATION FOR MES INTERNATIONAL, INC., GSI GROUP INC. AND GSI GROUP CORPORATION (THE “DEBTORS”), DATED JANUARY 8, 2010 (THE “PLAN”). THE DISCLOSURE STATEMENT INCLUDES AND DESCRIBES THE PLAN, A COPY OF WHICH IS ATTACHED HERETO AS EXHIBIT “A”. CLASS 5 – NOTE CLAIMS AND CLASS 6A – HOLDINGS EQUITY INTERESTS ARE THE ONLY CLASSES IMPAIRED UNDER THE PLAN AND THUS THE ONLY CLASSES ENTITLED TO VOTE ON THE PLAN. HOLDINGS PRIORITY CLAIMS – CLASS 1A, GSI PRIORITY CLAIMS – CLASS 1B, MES PRIORITY CLAIMS – CLASS 1C, HOLDINGS SECURED CLAIMS – CLASS 2A, GSI SECURED CLAIMS – CLASS 2B, MES SECURED CLAIMS – CLASS 2C, HOLDINGS GENERAL UNSECURED CLAIMS – CLASS 3A, GSI GENERAL UNSECURED CLAIMS – CLASS 3B, MES GENERAL UNSECURED CLAIMS – CLASS 3C, HOLDINGS INTERCOMPANY CLAIMS – CLASS 4A, GSI INTERCOMPANY CLAIMS – CLASS 4B, MES INTERCOMPANY CLAIMS – CLASS 4C, GSI EQUITY INTERESTS – CLASS 6B AND MES EQUITY INTERESTS – CLASS 6C, ARE UNIMPAIRED UNDER THE PLAN, AND ARE THEREFORE DEEMED TO HAVE ACCEPTED THE PLAN. ACCORDINGLY, THE DEBTORS ARE NOT SOLICITING ACCEPTANCES OF THE PLAN FROM THE FOREGOING UNIMPAIRED CLAIMS AND EQUITY INTERESTS. THE DEBTORS ARE SOLICITING ACCEPTANCES OF THE PLAN FROM HOLDERS OF CLAIMS OR INTERESTS IN CLASS 5 – NOTE CLAIMS AND CLASS 6A – HOLDINGS EQUITY INTERESTS.

AS EXPLAINED BELOW IN GREATER DETAIL, HOLDERS OF APPROXIMATELY 88.1% OF THE PRINCIPAL AMOUNT OF THE OUTSTANDING SENIOR NOTES WHICH EQUATES TO APPROXIMATELY 80.4% OF THE DOLLAR VALUE OF THE CLASS 5 CLAIMS (THE “CONSENTING NOTEHOLDERS”), ALREADY HAVE AGREED TO VOTE TO ACCEPT THE PLAN, SUBJECT TO THE RECEIPT OF THE DISCLOSURE STATEMENT APPROVED BY THE BANKRUPTCY COURT AND OTHER TERMS OF THE PLAN SUPPORT AGREEMENT.

THE DEBTORS BELIEVE THAT THE PLAN IS IN THE BEST INTEREST OF AND PROVIDES THE HIGHEST AND MOST EXPEDITIOUS RECOVERIES TO HOLDERS OF ALL CLAIMS AND EQUITY INTERESTS. ALL HOLDERS OF CLAIMS AND EQUITY INTERESTS ENTITLED TO VOTE TO ACCEPT OR REJECT THE PLAN ARE URGED TO VOTE IN FAVOR OF THE PLAN.

On December 22, 2009, the United States Trustee appointed an official committee of equity security holders (the “Equity Committee”) to represent the interests of holders of equity interests in these Chapter 11 Cases. Based on the diligence that the Equity Committee has done to date, the Equity Committee does not believe that the Plan is in the best interests of equity security holders and recommends that holders of equity interests vote to reject the Plan. The Equity Committee believes that there are alternatives to the Plan that would provide for a higher recovery to holders of equity interests and is currently pursuing those alternatives. The Equity Committee further believes that the Plan is not confirmable if holders of equity interests vote to

reject the Plan because the Equity Committee believes that, based on the value of the equity interests and New Senior Secured Notes that will be distributed under the Plan to holders of the Senior Notes, the holders of the Senior Notes will receive substantially more than full recovery on their claims, resulting in an unfair and inappropriate dilution of recoveries to holders of equity interests. The Equity Committee anticipates being in a position in the coming weeks to propose to the Debtors an alternative to the Plan that would provide for a better recovery to holders of equity interests while also ensuring an appropriate capital structure for the Debtors and addressing the Debtors’ concerns regarding the length of these Chapter 11 Cases. To the extent that the Debtors do not support such an alternative, the Equity Committee may seek approval from the Bankruptcy Court to propose and solicit its own plan of reorganization.

Please note that the Debtors do not share the beliefs of the Equity Committee contained in the paragraph immediately above, do not believe that shareholders would benefit from rejection of the Plan or delay, and recommend that holders of interests accept the Plan at this time as in their best interests. Moreover, holders of 88.1% of the Senior Notes have retained counsel and a financial advisor and have stated that they intend to demonstrate with evidence at the Confirmation Hearing that holders of the Senior Notes are not receiving more than a full recovery of their claims.

VOTING INSTRUCTIONS AND BALLOTS SHALL BE CONTAINED IN THE DISCLOSURE STATEMENT ORDER TO BE ATTACHED HERETO AS EXHIBIT “B”. IN ADDITION, THE SOLICITATION PACKAGE ACCOMPANYING EACH OF THE BALLOTS WILL CONTAIN APPLICABLE VOTING INSTRUCTIONS. THE VOTING INSTRUCTIONS WILL SPECIFY THE VOTING DEADLINE BY WHICH THE BALLOT MUST BE COMPLETED AND RECEIVED BY THE SOLICITATION AGENT.

FOR YOUR ESTIMATED PERCENTAGE RECOVERY UNDER THE PLAN, PLEASE SEE THE CHART SET OUT IN “OVERVIEW OF THE PLAN — SUMMARY OF DISTRIBUTIONS UNDER THE PLAN,” BELOW.

All capitalized terms used in the Disclosure Statement and not defined herein shall have the meanings ascribed thereto in the Plan (see Exhibit “A” to the Plan, Glossary of Defined Terms). For ease of reference, all defined terms used in the Disclosure Statement are listed on Schedule 1 to this Disclosure Statement. Unless otherwise stated, all references herein to “Schedules” and “Exhibits” are references to schedules and exhibits to this Disclosure Statement, respectively.

I. NOTICE TO HOLDERS OF CLAIMS AND EQUITY INTERESTS

The purpose of this Disclosure Statement is to enable you, as a creditor whose Claim is impaired under the Plan or as a stockholder whose Equity Interest is impaired under the Plan, to make an informed decision in exercising your right to accept or reject the Plan. See “Confirmation and Consummation Procedures.”

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THIS DISCLOSURE STATEMENT CONTAINS IMPORTANT INFORMATION THAT MAY BEAR UPON YOUR DECISION TO VOTE TO ACCEPT OR REJECT THE PLAN. PLEASE READ THIS DOCUMENT WITH CARE.

PLAN SUMMARIES AND STATEMENTS MADE IN THIS DISCLOSURE STATEMENT ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE PLAN AND THE EXHIBITS AND SCHEDULES ANNEXED TO THE PLAN AND TO THIS DISCLOSURE STATEMENT. THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE ONLY AS OF THE DATE HEREOF AND THERE CAN BE NO ASSURANCE THAT THE STATEMENTS CONTAINED HEREIN WILL BE CORRECT AT ANY TIME AFTER THE DATE HEREOF. IN THE EVENT OF ANY CONFLICT BETWEEN THE DESCRIPTION SET FORTH IN THIS DISCLOSURE STATEMENT AND THE TERMS OF THE PLAN, THE TERMS OF THE PLAN SHALL GOVERN.

THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125 OF THE BANKRUPTCY CODE, AND RULE 3016(b) OF THE BANKRUPTCY RULES AND NOT NECESSARILY IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAW OR OTHER NON-BANKRUPTCY LAW. THIS DISCLOSURE STATEMENT HAS BEEN NEITHER APPROVED NOR DISAPPROVED BY THE SEC, NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN.

PERSONS OR ENTITIES TRADING IN OR OTHERWISE PURCHASING, SELLING OR TRANSFERRING SECURITIES OR CLAIMS OF HOLDINGS OR ANY OF ITS SUBSIDIARIES AND AFFILIATES SHOULD EVALUATE THIS DISCLOSURE STATEMENT AND THE PLAN IN LIGHT OF THE PURPOSE FOR WHICH THEY WERE PREPARED.

AS TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS AND OTHER ACTIONS OR THREATENED ACTIONS, THIS DISCLOSURE STATEMENT SHALL NOT CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, STIPULATION, OR WAIVER, BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS. THIS DISCLOSURE STATEMENT SHALL NOT BE ADMISSIBLE IN ANY NON-BANKRUPTCY PROCEEDING NOR SHALL IT BE CONSTRUED TO BE CONCLUSIVE ADVICE ON THE TAX, SECURITIES, OR OTHER LEGAL EFFECTS OF THE PLAN AS TO HOLDERS OF CLAIMS AGAINST, OR EQUITY INTERESTS IN, HOLDINGS OR ANY OF ITS SUBSIDIARIES AND AFFILIATES, DEBTORS AND DEBTORS IN POSSESSION IN THESE CASES.

The Debtors filed a motion for a disclosure statement hearing and for an order pursuant to section 1125 of the Bankruptcy Code, finding that the Disclosure Statement contains information of a kind, and in sufficient detail, adequate to enable a hypothetical, reasonable investor typical of the solicited classes of Claims and Equity Interests of the Debtors to make an informed judgment with respect to the acceptance or rejection of the Plan. That motion was granted by the Bankruptcy Court on January 8, 2010. APPROVAL OF THIS DISCLOSURE STATEMENT BY THE BANKRUPTCY COURT DOES NOT CONSTITUTE A DETERMINATION BY

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THE BANKRUPTCY COURT OF THE FAIRNESS OR MERITS OF THE PLAN OR OF THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT.

Each holder of a Claim or Equity Interest entitled to vote to accept or reject the Plan should read this Disclosure Statement and the Plan in their entirety before voting. No solicitation of votes to accept or reject the Plan may be made except pursuant to this Disclosure Statement and section 1125 of the Bankruptcy Code. Except for the Debtors and certain of the professionals they have retained, no person has been authorized to use or promulgate any information concerning the Debtors, their businesses, or the Plan other than the information contained in this Disclosure Statement and if given or made, such information may not be relied upon as having been authorized by the Debtors. You should not rely on any information relating to the Debtors, their businesses or the Plan other than that contained in this Disclosure Statement and the Exhibits hereto.

After carefully reviewing this Disclosure Statement, including the attached Schedules and Exhibits, please indicate your acceptance or rejection of the Plan by voting in favor of or against the Plan on the enclosed ballot that will be enclosed and return the same to the address set forth on the ballot, in the enclosed, postage prepaid, return envelope so that it will be actually received by The Garden City Group, Inc., (the “Solicitation Agent”), no later than the Voting Deadline. All votes to accept or reject the Plan must be cast by using the appropriate ballot. Votes which are cast in any other manner will not be counted. All ballots must be actually received by the Solicitation Agent at a time which will be specified in the Disclosure Statement Order. For detailed voting instructions and the name, address and phone number of the person you may contact if you have questions regarding the voting procedures, see the Disclosure Statement Order which will be attached hereto as Exhibit “B”.

DO NOT RETURN ANY OTHER DOCUMENTS WITH YOUR BALLOT.

You will be bound by the Plan if it is accepted by the requisite holders of Claims and Equity Interests and confirmed by the Bankruptcy Court, even if you do not vote to accept the Plan, or if you are the holder of an unimpaired Claim. See “Confirmation and Consummation Procedures.”

The Confirmation Hearing will be held on February 26, 2010 at 9:30 a.m.

THE DEBTORS URGE ALL HOLDERS OF IMPAIRED CLAIMS AND EQUITY INTERESTS TO ACCEPT THE PLAN.

II. EXPLANATION OF CHAPTER 11

A. Overview of Chapter 11.

Chapter 11 is the principal reorganization chapter of the Bankruptcy Code pursuant to which a debtor in possession may reorganize its business for the benefit of its creditors, stockholders, and other parties in interest. The Debtors commenced the Chapter 11 Cases with

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the filing by the Debtors of petitions for voluntary protection under chapter 11 of the Bankruptcy Code on the Petition Date. Concurrently with the commencement of the Chapter 11 Cases, the Debtors filed a motion for joint administration of the Chapter 11 Cases.

The commencement of a chapter 11 case creates an estate comprising all the legal and equitable interests of the debtor in possession as of the date the petition is filed. Sections 1101, 1107, and 1108 of the Bankruptcy Code provide that a debtor may continue to operate its business and remain in possession of its property as a “debtor in possession” unless the bankruptcy court orders the appointment of a trustee. In the Chapter 11 Cases, each Debtor remains in possession of its property and continues to operate its businesses as a debtor in possession. See “The Reorganization Cases — Continuation of Business after the Petition Date.”

The filing of a chapter 11 petition triggers the automatic stay provisions of the Bankruptcy Code. Section 362 of the Bankruptcy Code provides, among other things, for an automatic stay of all attempts by creditors or other third parties to collect prepetition claims from the debtor or otherwise interfere with its property or business. Exempted from the automatic stay are governmental authorities seeking to exercise regulatory or policing powers. Except as otherwise ordered by the bankruptcy court, the automatic stay remains in full force and effect until the effective date of a confirmed plan of reorganization.

The formulation of a plan of reorganization is the principal purpose of a chapter 11 case. The plan sets forth the means for satisfying the holders of claims against and interests in the debtor’s estate. Unless a trustee is appointed, only the debtor may file a plan during the first 120 days of a chapter 11 case (the “Filing Period”), and the debtor will have 180 days to solicit acceptance of such plan (the “Solicitation Period”). However, section 1121(d) of the Bankruptcy Code permits the bankruptcy court to extend or reduce the Filing Period and Solicitation Period upon a showing of “cause.” The Filing Period and Solicitation Period may not be extended beyond 18 months and 20 months, respectively, from the Petition Date. As the Debtors filed the Plan during the Filing Period, no other creditor or party in interest may file a plan until the expiration of the Solicitation Period. See “The Reorganization Cases — Exclusivity Periods.”

B. Plan of Reorganization.

Although referred to as a plan of reorganization, a plan may provide anything from a complex restructuring of a debtor’s business and its related obligations to a simple liquidation of the debtor’s assets. In either event, upon confirmation of the plan, it becomes binding on the debtor and all of its creditors and equity holders, and the prior obligations owed by the debtor to such parties are compromised and exchanged for the obligations specified in the plan. For a description of key components of the Plan, see “Overview of the Plan,” below.

After a plan of reorganization has been filed, the holders of impaired claims against and equity interests in a debtor are permitted to vote to accept or reject the plan. Before soliciting acceptances of the proposed plan, section 1125 of the Bankruptcy Code requires the debtor to prepare and file a disclosure statement containing adequate information of a kind, and in sufficient detail, to enable a hypothetical reasonable investor to make an informed judgment

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about the plan. This Disclosure Statement is presented to holders of Claims against and Equity Interests in the Debtors to satisfy the requirements of section 1125 of the Bankruptcy Code in connection with the Debtors’ solicitation of votes on the Plan.

C. Confirmation of a Plan of Reorganization.

If all classes of claims and equity interests accept a plan of reorganization, the bankruptcy court may confirm the plan if the bankruptcy court independently determines that the requirements of section 1129(a) of the Bankruptcy Code have been satisfied. See “Confirmation and Consummation Procedures — Confirmation of the Plan.” The Debtors believe that the Plan satisfies all the applicable requirements of section 1129(a) of the Bankruptcy Code.

Chapter 11 of the Bankruptcy Code does not require that each holder of a claim or interest in a particular class vote in favor of a plan of reorganization for the bankruptcy court to determine that the class has accepted the plan. See “Confirmation and Consummation Procedures.”

In addition, classes of claims or equity interests that are not “impaired” under a plan of reorganization are conclusively presumed to have accepted the plan and thus are not entitled to vote. Furthermore, classes that are to receive no distribution under the plan are conclusively deemed to have rejected the plan. See “Confirmation and Consummation Procedures.” Accordingly, acceptances of a plan will generally be solicited only from those persons who hold claims or equity interests in an impaired class. Note Claims - Class 5 and Holdings Equity Interests - Class 6A are the only classes impaired under the Plan and thus the only classes entitled to vote on the Plan. Holdings Priority Claims – Class 1A, GSI Priority Claims – Class 1B, MES Priority Claims – Class 1C, Holdings Secured Claims – Class 2A, GSI Secured Claims – Class 2B, MES Secured Claims – Class 2C, Holdings General Unsecured Claims – Class 3A, GSI General Unsecured Claims – Class 3B, MES General Unsecured Claims – Class 3C, Holdings Intercompany Claims – Class 4A, GSI Intercompany Claims – Class 4B, MES Intercompany Claims – Class 4C, GSI Equity Interests – Class 6B and MES Equity Interests – Class 6C, are unimpaired, are unimpaired under the Plan and are therefore deemed to have accepted the Plan.

In general, a bankruptcy court also may confirm a plan of reorganization even though fewer than all the classes of impaired claims against and equity interests in a debtor accept such plan. For a plan of reorganization to be confirmed, despite its rejection by a class of impaired claims or equity interests, the plan must be accepted by at least one class of impaired claims (determined without counting the vote of insiders) and the proponent of the plan must show, among other things, that the plan does not “discriminate unfairly” and that the plan is “fair and equitable” with respect to each impaired class of claims or equity interests that has not accepted the plan. See “Confirmation and Consummation Procedures — Cramdown.” The Plan has been structured so that it will satisfy the foregoing requirements for each of the Debtors as to any rejecting class of Claims or Equity Interests, and can therefore be confirmed, if necessary, over the objection of any (but not all) classes of Claims or Equity Interests.

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The Debtors negotiated the terms of the Plan with the Consenting Noteholders. As a result of such negotiations, the Consenting Noteholders entered into the Plan Support Agreement, pursuant to which, among other things, the Consenting Noteholders agreed, subject to the terms of the Plan Support Agreement, to vote to accept the Plan. As of the date of the Plan Support Agreement, the Consenting Noteholders collectively held or controlled approximately 88.1% of the outstanding principal amount of the Senior Notes. As a result, approximately 80.4%% of the dollar value of the Class 5 Claims have agreed to vote in favor of the Plan in accordance with the terms of the Plan Support Agreement.

III. OVERVIEW OF THE PLAN

The Plan provides for the treatment of Claims against and Equity Interests in all of the Debtors’ Chapter 11 Cases.

A. Summary of the Terms of the Plan.

The Plan is built around the following key elements:

• The Debtors’ businesses will continue to be operated in substantially their current form.

• As set forth in Section 3.5 of the Plan, each Holder of an Allowed Note Claim will receive the following in full satisfaction of such Allowed Note Claim: (a) a payment in Cash for interest (at the non-default rate) due under such Allowed Note Claim to the extent such interest is accrued, due and payable under the Allowed Note Claim and unpaid as of the Petition Date, at the contractual (non-default) rate provided in such Senior Note or GSI UK Note, as applicable, if any; (ii) a payment in Cash for fees, expenses (including, without limitation, all amounts payable to the Indenture Trustee) and all other amounts (other than principal) due under such Allowed Note Claim to the extent such fees, expenses and other amounts are due and payable under the Allowed Note Claim and unpaid as of the Effective Date; (iii) a Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 5 Note Claims, which total amount shall be equal to 81.4% of the Outstanding Capital Stock of Reorganized Holdings; (iv) a Pro Rata Share of the New Senior Secured Notes; and (v) a Pro Rata Share of the Cash Note Payment.

• As set forth in Section 3.6 of the Plan, on the Effective Date, all Allowed Holdings Equity Interests will be cancelled, and on account of each Holdings Equity Interest, the following will be distributed to such Holder: (i) a Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 5 Note Claims, which total amount shall be equal to 18.6% of the Outstanding Capital Stock of Reorganized Holdings; (ii) a Pro Rata Share of New $1.10 Warrants; and (iii) a Pro Rata Share of New $2.00 Warrants.

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• As set forth in Article VI of the Plan, on or as soon as reasonably practicable after the Effective Date, Reorganized Holdings will enter into, or cause its Subsidiaries to enter into, the following instruments and agreements: (i) a new management incentive plan for certain management of Reorganized Holdings; (ii) New Senior Secured Notes (iii) the New Indenture; (iv) the Security Documents; (v) the New Warrants; (vi) the Reorganized Holdings Constituent Documents and (vii) the Registration Rights Agreement.

B. Summary of Distributions Under the Plan.

The following is a summary of the distributions under the Plan. It is qualified in its entirety by reference to the full text of the Plan, which is attached to this Disclosure Statement as Exhibit “A”. In addition, for a more detailed description of the terms and provisions of the Plan, see “The Chapter 11 Plan,” below.

The claim amounts set forth below are based on information contained in the Debtors’ Schedules and reflect what the Debtors believe to be reasonable estimates. The amounts utilized may differ materially from the outstanding filed Claim amounts.

The following chart summarizes the estimated Plan Distributions to each class on the Plan Distribution Date (unless otherwise provided):

Administrative and Tax Claims²

Classes of Claims3

Treatment of Classes of Claims

Administrative Claims Estimated Allowed Claims: $8,800,000

Each Allowed Administrative Claim shall, at the sole option of the Debtors, receive (i) on the Plan Distribution Date, the amount of such Allowed Claim in Cash, (ii) with respect to Allowed Administrative Claims representing liabilities incurred in the ordinary course of business by the Debtors, payment when and as such Administrative Claims become due and owing by their ordinary course terms, or (iii) such other treatment as may be agreed upon in writing by the Debtors or the Disbursing Agent, as the case may be, and the holder of such Claim; provided, that such treatment shall not provide to the holder of such Claim a return having a present value as of the Effective Date in excess of such Allowed Administrative Claim. If a portion of an Administrative Claim is disputed, the undisputed portion of such Administrative Claim shall be timely paid as provided above.

² Administrative Claims and Tax Claims are treated in accordance with sections 1129(a)(9)(A) and 1129(a)(9)(C) of the Bankruptcy Code, respectively. Such Claims are not designated as classes of Claims for the purposes of this Plan or for the purposes of sections 1123, 1124, 1125, 1126, 1129 of the Bankruptcy Code.

³ The amounts set forth herein are the Debtors’ estimates based on the Debtors’ books and records. The Bar Date (as defined below) has not yet occurred. Actual amounts will depend upon the amounts of Claims timely filed before the Bar Date, final reconciliation and resolution of all Claims, and the negotiation of cure amounts. Accordingly, the actual amounts may vary significantly from the amounts set forth herein.

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Tax Claims Estimated Allowed Claims: $300,000 At the election of the Debtors, each Allowed Tax Claim shall receive, in full satisfaction of such Allowed Tax Claim, (a) the amount of such Allowed Tax Claim, with Post-Confirmation Interest thereon, in equal annual Cash payments on each anniversary of the Effective Date, until the sixth anniversary of the date of assessment of such Tax Claim (provided that the Debtors may prepay the balance of any such Allowed Tax Claim at any time without penalty); (b) a lesser amount in one Cash payment as may be agreed upon in writing by the holder of such Claim; or (c) such other treatment as may be agreed upon in writing by the holder of such Claim; provided, that such agreed-upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such holder’s Allowed Tax Claim. The Confirmation Order shall enjoin any holder of an Allowed Tax Claim from commencing or continuing any action or proceeding against any responsible person, officer or director of the Debtors that otherwise would be liable to such holder for payment of a Tax Claim so long as the Debtors are in compliance with this Section. So long as the holder of an Allowed Tax Claim is enjoined from commencing or continuing any action or proceeding against any responsible person, officer or director under this Section or pursuant to the Confirmation Order, the statute of limitations for commencing or continuing any such action or proceeding shall be tolled.

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Debtor Claims and Equity Interests

Classes of Claims4

Treatment of Classes of Claims

Class 1 — Priority Claims Estimated Allowed Claims: $1,600,000 Unimpaired

Each Allowed Priority Claim against any of the Debtors shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all legal, equitable and contractual rights as to an Allowed Priority Claim shall be fully reinstated and retained, and such Allowed Priority Claim shall, at the sole option of the applicable Debtor, receive the following treatment: (i) be paid on the Plan Distribution Date in full in Cash with Post-Petition Interest from the Petition Date through the Effective Date; (ii) be paid in accordance with the terms under which such Allowed Priority Claim arose, or (iii) receive such other treatment as may be agreed upon in writing by the holder of such Claim; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed Priority Claim.

⁴ See Footnote 3.

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Classes of Claims4

Treatment of Classes of Claims

Class 2 — Secured Claims Estimated Allowed Claims: $1,000,000 Unimpaired

Each Allowed Secured Claim against any of the Debtors shall be unimpaired under the Plan and at the sole option of the applicable Debtor, receive the following treatment: (i) shall receive on the Plan Distribution Date on account of such Allowed Secured Claim a Cash payment in an amount equal to the amount of the Allowed Secured Claim as of the Effective Date with Post-Petition Interest from the Petition Date through the Effective Date, (ii) shall retain its liens securing such Allowed Secured Claim and receive on account of such Allowed Secured Claim deferred cash payments having a present value on the Effective Date equal to the amount of such Allowed Secured Claim with Post-Petition Interest from the Petition Date through the Effective Date, (iii) shall realize the “indubitable equivalent” of such Allowed Secured Claim, (iv) the property securing the Allowed Secured Claim shall be sold free and clear of liens, with such liens to attach to the proceeds of the sale and the treatment of such liens on proceeds as provided in clause (ii), (iii) or (vi) of this subparagraph, (v) if such Allowed Secured Claim is subject to a valid right of recoupment or setoff, such Claim shall be setoff to the extent of the amount subject to setoff in accordance with sections 506(a) and 553 of the Bankruptcy Code; (vi) shall retain its liens securing such Allowed Secured Claim and be paid in accordance with the terms under which such Allowed Secured Claim arose, or (vii) receive such other treatment as may be agreed upon in writing by the holder of such Claim; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed Secured Claim.

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Classes of Claims4	Treatment of Classes of Claims
Class 3 — General Unsecured Claims Estimated Allowed Claims: $5,100,000 Unimpaired	Each Allowed General Unsecured Claim against the Debtors shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all legal, equitable and contractual rights as to such Allowed General Unsecured Claim shall be fully reinstated and retained, and such Allowed General Unsecured Claim shall, at the sole option of the Debtors, receive the following treatment: (i) be paid on the Plan Distribution Date in full in Cash with Post-Petition Interest from the Petition Date through the Effective Date, (ii) be paid in accordance with the terms under which such Allowed General Unsecured Claim arose, or (iii) receive such other treatment as may be agreed upon in writing by the holder of such Claim; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed General Unsecured Claim.
Class 4 — Intercompany Claims: Estimated Allowed Claims $155,900,000 Unimpaired	Each Allowed Intercompany Claim against the Debtors shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all legal, equitable and contractual rights as to an Allowed Intercompany Claim shall be fully reinstated and retained, and such Allowed Intercompany Claim shall, at the sole option of the applicable Debtor, receive the following treatment: (i) be paid in accordance with the terms under which such Allowed Intercompany Claim arose, or (ii) receive such other treatment as may be agreed upon in writing by the holder of such Claim; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed Intercompany Claim.

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Classes of Claims4	Treatment of Classes of Claims
Class 5 — Note Claims: $237,400,000 Impaired	On the Plan Distribution Date, each Allowed Note Claim will receive the following in full satisfaction of such Allowed Note Claim: (a) a payment in Cash for interest (at the non-default rate) due under such Allowed Note Claim to the extent such interest is accrued, due and payable under the Allowed Note Claim and unpaid as of the Petition Date, at the contractual (non-default) rate provided in such Senior Note or GSI UK Note, as applicable, if any; (ii) a payment in Cash for fees, expenses (including, without limitation, all amounts payable to the Indenture Trustee) and all other amounts (other than principal) due under such Allowed Note Claim to the extent such fees, expenses and other amounts are due and payable under the Allowed Note Claim and unpaid as of the Effective Date; (iii) a Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 5 Note Claims, which total amount shall be equal to 81.4% of the Outstanding Capital Stock of Reorganized Holdings; (iv) a Pro Rata Share of the New Senior Secured Notes; and (v) a Pro Rata Share of the Cash Note Payment.
Class 6A — Holdings Equity Interests Estimated Allowed Equity Interests: N/A Impaired	On the Effective Date, all Allowed Holdings Equity Interests will be cancelled, and on account of each Holdings Equity Interest, the following will be distributed to such Holder: (i) a Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 5 Note Claims, which total amount shall be equal to 18.6% of the Outstanding Capital Stock of Reorganized Holdings; (ii) a Pro Rata Share of New $1.10 Warrants; and (iii) a Pro Rata Share of New $2.00 Warrants. All Holdings Equity Interests which are either unexercised or unvested as of the Voting Record Date (and therefore are not included in the definition of Holdings Equity Interests) shall be cancelled on the Effective Date, and the holders of such unexercised or unvested Equity Interests shall neither receive nor retain any property under the Plan on account of such unexercised or unvested Equity Interests unless the Bankruptcy Court orders otherwise.
Class 6B — GSI Equity Interests Estimated Allowed Equity Interests: N/A Unimpaired	Each GSI Equity Interest shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights as to such Equity Interests shall be fully reinstated and retained on and after the Effective Date and shall become Equity Interests held by Reorganized Holdings pursuant to the terms of the Plan.

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Classes of Claims4	Treatment of Classes of Claims
Class 6C — MES Equity Interests Estimated Allowed Equity Interests: N/A Unimpaired	Each MES Equity Interest shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights as to such Equity Interests shall be fully reinstated and retained on and after the Effective Date.

IV. GENERAL INFORMATION

The discussion below briefly describes the Debtors and their businesses as they exist as of the date of this Disclosure Statement.

A. Overview of the Debtors.

The Debtors consist of GSI Group Inc. (“Holdings”), its wholly owned subsidiary GSI Group Corporation (“GSI”), and MES International, Inc. (“MES”), a wholly owned subsidiary of MicroE Systems Corp., which is an indirect wholly owned subsidiary of GSI. Holdings’ other U.S. subsidiaries and Holdings’ foreign subsidiaries have not filed for chapter 11 protection in the U.S., or commenced proceedings outside the U.S.

Holdings, together with its subsidiaries (the “Company”), designs, develops, manufactures and sells photonics-based solutions (consisting of lasers, laser systems and electro-optical components), precision motion devices, associated precision motion control technology and systems. The Company’s customers incorporate its technology into their products or manufacturing processes, for a wide range of applications in the industrial, scientific, electronics, semiconductor, medical and aerospace markets. The Company’s products allow customers to make advances in materials and processing technology and to meet extremely precise manufacturing specifications, including device complexity and miniaturization.

B. Business and Properties of the Debtors.

1. Overview

Holdings, founded in 1968 as General Scanning, Inc. (“General Scanning”), was incorporated in Massachusetts. General Scanning developed, manufactured and sold components and subsystems for high-speed micro positioning of laser beams. In 1999, General Scanning merged with Lumonics Inc., a Canadian company that developed, manufactured and sold laser-based, advanced manufacturing systems for electronics, semiconductor, and general industrial applications. GSI Lumonics Inc., the post-merger entity, incorporated under the laws of New Brunswick, Canada. In 2005, GSI Lumonics Inc. renamed itself GSI Group Inc.

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In August 2008, Holdings acquired Excel Technology, Inc. (“Excel”), a designer, manufacturer and marketer of photonics-based solutions consisting of lasers, laser based systems, precision motion devices and electro-optical components, primarily for industrial and scientific applications. Prior to the acquisition, Excel, which is not a Debtor in the Chapter 11 cases, was headquartered in East Setauket, New York. Excel manufactures its products in plants located in the United States and Germany, and sells its products to customers worldwide, both directly and indirectly through resellers and distributors.

2. Precision Technology Segment

The Company’s Precision Technology segment primarily sells components to original equipment manufacturers (OEMs), who then integrate its products into application specific products or systems. The Company’s OEM products include those based on its core competencies in laser, precision motion and motion control technology.

The Precision Technology segment, which includes the operations of Excel, has seven major product lines, including lasers and laser-based systems, scanners, optics, printed circuit board spindles, encoders, thermal printers and light and color measurement.

Product Line	Key End Markets	Description
Lasers and Laser-Based Systems	Industrial, Electronics, Automotive, Scientific, Medical, Packaging, Homeland Security and Aerospace	Applications include welding, cutting, drilling, surface marking, deep engraving of metal and plastic parts for traceability and identification or performance, marking, engraving and micro-machining, scientific research, remote sensing and automation.
Scanners	Industrial Electronics, Aerospace and Medical Applications	High precision motors that, when coupled with a mirror, can direct a laser beam with high degrees of accuracy. Applications include product laser marking and coding, laser machining and welding, high density via hole drilling of printed circuit boards, retinal scanning, laser-based vision correction, high resolution printing, 2D or 3D imaging, and laser projection and entertainment.
Optics	Aerospace, Telecommunications, Scanning	Super flat and super polished optics, thin-filmed optics and high performance mirrors primarily used with a scanner to direct a laser light. Applications include all of the above, and in addition, the deflection of laser beams in the use of aircraft gyroscopes, and bending optical light beams that transmit telecommunication data.
Printed Circuit Board Spindles	Electronics	High-speed air bearing spindles used in boring very small and precise holes in printed circuit boards. Additional applications include: semiconductor, industrial, and printing.

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Product Line	Key End Markets	Description
Encoders	Electronics	Linear and rotary electro-optical tracking devices that measure movement at accuracy within sub-micron levels. Applications include: motion control of semiconductor and electronic manufacturing equipment, confocal microscopes, positioning magnetic rings on hard drives to store high amounts of data and precision manufacturing and coordinate measuring systems.
Thermal Printers	Medical	Rugged paper tape printers for the medical instruments and defibrillator markets.
Light and Color Measurement	Aerospace, automotive, lighting, motion picture, research and development and related industries	Color metrology systems to a wide variety of industries for research, quality control and on-line testing, including portable battery operated Spectro radio meter, photometers and video photometers.

3. Semiconductor Systems Segment

The Company’s Semiconductor Systems Segment designs, develops and sells production systems that process semiconductor wafers using laser beams and high precision motion technology. The Company sells manufacturing systems to integrated device manufacturers and wafer processors. The Company’s systems perform laser based processing on all of the following types of semiconductors: general wafers used for logic or memory purposes, dynamic random access memory (DRAM, NAND) chips and high performance analog chips.

The Semiconductor Systems segment has three major product lines.

Product Line	Key End Markets	Description
WaferRepair	Semiconductor DRAM and Flash Memory chips	WaferRepair is used to raise production yields for 300mm and 200mm DRAM and NAND wafers to commercially acceptable levels.
WaferTrim	Semiconductor—high performance analog and mixed signal devices	WaferTrim systems enable production of high performance integrated circuits (IC’s) by precisely trimming analog and mixed signal integrated circuits with a laser beam to achieve a specified electrical resistance.
WaferMark	Semiconductor—Silicon suppliers and integrated circuit factories	WaferMark systems are used to mark silicon wafers with characters or markings at various stages of the wafer and integrated circuit manufacturing process. The marks are designed to aid process control and device traceability.

The Semiconductor Systems segment also includes two smaller product lines, CircuitTrim and SVS. CircuitTrim systems are used in the production of thick and thin film resistive components for surface mount technology electronic circuits, known as chip resistors,

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as well as thick and thin film hybrid circuits, and for adjusting the performance of complete multi-chip modules. SVS inspection equipment is used to inspect pre- and post- reflow solder paste and component placement on printed circuit boards.

4. Manufacturing

With the acquisition of Excel, the Company manufactures Precision Technology products at facilities in Bedford and Lexington, Massachusetts; Chatsworth, Oxnard and Santa Clara, California; East Setauket, New York; Orlando, Florida; Mukilteo, Washington; Poole, Rugby and Taunton, United Kingdom; Ludwigsburg, Germany; and Suzhou, China. Semiconductor Systems are manufactured, assembled and tested in Bedford, Massachusetts. Of these manufacturing sites, only the Bedford, Massachusetts site is leased by the Debtors. The other facilities are owned or leased by Holdings’ non-Debtor Subsidiaries. Most of the Company’s products are manufactured under ISO 9001 certification. Manufacturing functions are performed internally when management chooses to maintain control over critical portions of the production process or for cost related reasons. To the extent practical, the Company outsources the remaining portions of the production process. The Semiconductor Systems segment focuses on outsourcing low value parts and modules and internally retains the tasks of final assembly of subsystems, testing and quality control.

All volume manufacturing of legacy laser products are moving from the Rugby, U.K. facilities, to other laser manufacturing sites.

5. Properties

The principal owned and leased properties of the Company are listed in the table below.

Location	Principal Use	Approximate Square Feet	Owned/Leased	Debtor Owned/Leased
Facilities
Bedford, Massachusetts, USA	Manufacturing, R&D, Marketing, Sales and Administrative	147,000	Leased; expires in 2020, with two five-year renewal options	GSI
Rugby, United Kingdom (*)	Manufacturing, R&D, Marketing, Sales and Administrative	113,000	Owned; approximately 14% of the space is leased through 2009 and 2012	No

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Location	Principal Use	Approximate Square Feet	Owned/Leased	Debtor Owned/Leased
Poole, United Kingdom (*)	Manufacturing, R&D, Marketing, Sales and Administrative	88,000 (two sites)	2 units owned; 2 units with land leases through 2073 and 2078, respectively	No
Orlando, Florida, USA	Manufacturing, R&D, Marketing, Sales and Administrative	80,000	Owned	No
East Setauket, New York, USA	Manufacturing, R&D, Marketing, Sales and Administrative	65,000	Owned	No
Mukilteo, Washington, USA	Manufacturing, R&D, Marketing, Sales and Administrative	63,000	Owned	No
Suzhou, People’s Republic of China	Manufacturing, R&D, Marketing, Sales and Administrative	55,000	Leased; expires in 2011	No
Santa Clara, California, USA	Manufacturing, Marketing, Sales and Administrative	44,388	Leased; expires in 2010	No
Lexington, Massachusetts, USA	Manufacturing, Marketing, Sales and Administrative	33,339	Leased; expires in 2016	No
Ludwigsburg, Germany	Manufacturing, R&D, Marketing, Sales and Administrative	22,500	Leased; expires in 2011	No

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Location	Principal Use	Approximate Square Feet	Owned/Leased	Debtor Owned/Leased
Chatsworth, California, USA	Manufacturing, R&D, Marketing, Sales and Administrative	22,000	Owned	No
Taunton, United Kingdom	Manufacturing, R&D, Marketing and Sales	19,000	Leased; expires in 2017	No
Mumbai, India	Service, R&D, Sales and Administrative	16,769	Owned	No
Oxnard, California, USA	Manufacturing and Administrative	14,000	Leased; expires 2009	No

(*) At December 31, 2008, the building was classified as an asset available for sale. On February 23, 2009, the Company sold one of its properties in Poole UK comprising 37,000 square feet of space.

Additional research and development, sales, service and logistics sites are located in California, Colorado, United Kingdom, Germany, France, Italy, Japan, Korea, Taiwan, China, Malaysia and Sri Lanka. These additional offices are in leased facilities occupying approximately 83,000 square feet in the aggregate.

6. Marketing, Sales and Distribution

The Company sells worldwide with a direct sales force and through distributors and sales agents.

• Precision Technology products are sold worldwide mostly through direct sales, as well as through distributors, primarily to OEMs. Precision Technology businesses have sales and service centers located in Massachusetts, Michigan, California, United Kingdom, Germany, Switzerland, Italy, France, Taiwan, China, Singapore, Malaysia, India and Japan. Sumitomo Heavy Industries Ltd. (a significant shareholder of Holdings) is a key distributor for certain products in Japan. Because of the fundamental nature and relatively small physical size of the products, Precision Technology generally employs a factory direct strategy in support of its worldwide customer base, except in its Laser product line where parts and field technical support is significant.

• Semiconductor Systems are sold directly, or, in some territories, through distributors. End users include semiconductor integrated device manufacturers or electronic component and assembly firms. Sales activities are directed from the

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product business unit sites in North America, Europe, Japan and Asia Pacific. Field offices are located close to key customers’ manufacturing sites to maximize sales and support effectiveness. Significant revenues are provided from parts and servicing systems in its installed base at customer locations. The Company maintains field offices in Germany, Japan, South Korea, China, Taiwan and Singapore.

7. Sources of Supply

In the Precision Technology Segment, the Company manufactures many of its own parts, particularly in the air bearing spindle business. However, non-critical machined parts are often purchased externally. The Company also purchases fully-functional electronics as well as certain key components, such as laser diodes, from external sources, and it cannot guarantee that those suppliers will continue to perform in a satisfactory fashion.

In the Semiconductor Systems Segment, the Company purchases major subsystems, such as lasers, motion stages, vision systems and software, fully-functional electronics and frames and racks, from the merchant market. Its optics components are both internally manufactured and externally purchased. In some cases, upper level assemblies and entire systems are outsourced to electronic manufacturing services companies.

8. Patents and Intellectual Property

The Company’s intellectual property includes copyrights, patents, trademarks and trade-names involving proprietary software, technical know-how and expertise, designs, process techniques and inventions. The Company has several patents and pending patents in the United States and foreign countries.

The Company also relies on a combination of copyrights and trade secret laws and restrictions on access to protect its trade secrets and proprietary rights.

9. Human Resources

Employees by functional area:

	Number of Employees	Percentage
Production operations and field service	923	58	%
Research and development	257	16	%
Selling, general and administrative	403	26	%
Total at December 31, 2008	1,583	100	%

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10. Government Regulation

The Company is subject to the laser radiation safety regulations of the Radiation Control for Health and Safety Act administered by the National Center for Devices and Radiological Health, a branch of the United States Food and Drug Administration. Among other things, these regulations require laser manufacturer to file new product and annual reports, to maintain quality control and sales records, to perform product testing, to distribute appropriate operating manuals, to incorporate design and operating features in lasers sold to end-users and to certify and label each laser sold to end-users as one of four classes (based on the level of radiation from the laser that is accessible to users). Various warning labels must be affixed and certain protective devices installed depending on the class of product. The National Center for Devices and Radiological Health is empowered to seek fines and other remedies for violations of the regulatory requirements.

11. Management

Below is a list of the directors and executive officers of each of the Debtors. A brief biography of each of the officers is provided immediately following the list. Following the Effective Date, it is anticipated that the board of directors of Reorganized GSI will be comprised of seven directors (including the Chief Executive Officer of Reorganized Holdings and five members to be appointed by the Noteholders. It is anticipated that the members of the board of directors and the officers of each of the Debtors who are serving as of the Confirmation Date will continue to serve in such capacities until the Effective Date. Entry of the Confirmation Order shall ratify and approve all actions taken by the board of directors and the officers of the Debtors from the Petition Date through and until the Effective Date. The identities of the members of the board of directors for Reorganized GSI will be disclosed prior to the conclusion of the Confirmation Hearing. Such directors shall serve in accordance with the applicable Reorganized Holdings Constituent Documents, as the same may be amended from time to time. Except as otherwise determined by the board of directors of the Reorganized GSI Entities, it is anticipated that the officers of the Debtors will continue as officers of the Reorganized GSI Entities following the Effective Date. See “Article X - Management of the Reorganized Debtors.”

Name	Age	Title
Holdings
Richard B. Black	76	Chairman of the Board of Directors
Sergio Edelstein, Ph.D	55	President and Chief Executive Officer, Director
Garrett A. Garrettson, Ph.D.	66	Director
Phillip A. Griffiths, Ph.D.	71	Director
Marina Hatsopoulos	44	Director
Byron O. Pond	73	Director

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Benjamin J. Virgilio	69	Director
Anthony Bellantuoni	57	Vice President of Human Resources
Philippe Brak	48	President and General Manager
Stephen Webb	48	Managing Director
GSI
Sergio Edelstein, Ph.D	54	President and Chief Executive Officer
Anthony Bellantuoni	57	Vice President and Secretary
MES
Sergio Edelstein, Ph.D	54	President and Chief Executive Officer, Director
Anthony Bellantuoni	57	Vice President and Secretary, Director

Richard B. Black has been a Director of Holdings since 1999 and Chairman of the Board of Directors since 2005. He has been President and Chief Executive Officer of ECRM, Inc., a manufacturer of laser systems equipment for the printing and publishing industry since 2002. He served as Chairman of ECRM from August 1983 until March 2002. Mr. Black also served as a General Partner for OpNet Partners, L.P., a technology investment fund from 2001 through 2007. He served as Vice Chairman of Oak Technology, Inc. from March 1999 until the company was merged with Zoran Corporation in August 2003. He served as President of Oak Technology from January 1998 to March 1999, and was a director at Oak Technology from 1988 to 2003. From 1987 to 1997, Mr. Black served as a General Partner for KBA Partners, L.P., a technology venture capital fund. Prior to that time, he served as president and CEO of AM International, Inc., Alusuisse of America, Inc. and Maremont Corporation. From 1963 to 1966 Mr. Black was an Adjunct Professor of Accounting at Beloit College. In addition to ECRM, he currently serves as a director of the following companies: Alliance Fiber Optic Products, Inc., Applied Optoelectronics, Inc. and Trex Enterprises Corporation. Mr. Black has been a director of Holdings since 1999.

Sergio Edelstein, Ph.D. has been President, Chief Executive Officer, and a member of the Board of Directors of Holdings since July 2006. He also serves on the Board of Directors of MES. From 2004 until joining the Company in July 2006, he served as Group Vice President of the E-Beam & Films Product Group at KLA Tencor. From 2000 to 2004, Mr. Edelstein held the position of Vice President and General Manager of KLA’s Film and Surface Technology Division. Prior to joining KLA Tencor, Mr. Edelstein served as the General Manager of the Tungsten Systems Division at Applied Materials Inc.

Garrett A. Garrettson, Ph.D. has been a Director of Holdings since 2005. He has been the President of G. Garrettson Consulting LLC, a management consulting company since 2004. From December 2005 to January 2008, he was President and CEO of Fresco Technologies, a private digital imaging company. From November 2001 to September 2004, he was the Chief Executive Officer of Clairvoyante, Inc., a provider of flat panel display technology and related intellectual property. From April 2000 to December 2002, he was Chairman of the Board and,

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from April 1996 to April 2000, the Chief Executive Officer of Spectrian Corporation, a telecommunications infrastructure equipment company. From April 1993 until April 1996, he was President and Chief Executive Officer of Censtor, a private magnetic recording head and media company. Mr. Garrettson is currently a director of Catalyst Semiconductor, Iridex and Giga-Tronics, each a publicly held company.

Phillip A. Griffiths, Ph.D. has been a Director of Holdings since 2001. He is a faculty member in the School of Mathematics at the Institute for Advanced Study in Princeton, New Jersey. He is also currently serving as the Chairman of the Board of the Science Initiative Group, an international team of scientific leaders and supporters dedicated to fostering science in developing countries. He was, from 1991 to 2004, Director of the Institute of Advanced Study, where he was responsible for managing the Institute’s various research activities. Prior to joining the Institute in 1991, Dr. Griffiths was Provost and James B. Duke Professor of Mathematics at Duke University for eight years. He has also taught at Harvard University, Princeton University and the University of California, Berkeley. He currently serves as a director of Oppenheimer Funds, Inc.

Marina Hatsopoulos has been a Director of Holdings since 2005. She was the founder of and Chief Executive Officer of Z Corporation, a provider of technology and products to the 3D printing market. Z Corporation was sold to Contex Scanning Technology in 2005. From August 2005 to September 2007, Ms. Hatsopoulos was a director of Contex Holdings, a leading manufacturer of large-format scanners. Ms. Hatsopoulos is currently a director of Tea Forte, a high-growth manufacturer and retailer of premium tea products.

Byron O. Pond has been a Director of Holdings since 2000. From August 2006 through December 2006, Mr. Pond served as Interim Chief Executive Officer of Cooper Tire & Rubber, an automotive supply company. In February 2001, Mr. Pond joined Amcast Industrial Corporation, serving at various times as President, CEO and Chairman before retiring in February 2004. After retirement, Mr. Pond remained as an Amcast director and non-executive Chairman. In November 2004, Mr. Pond resumed the positions of Chairman, President and CEO positions at the board’s request. Amcast filed for protection under Chapter 11 of the U.S. Bankruptcy Code on November 30, 2004. Between 1990 and 1999, Mr. Pond was a senior executive with Arvin Industries, Inc., serving as its President and Chief Executive Officer from 1993 to 1996 and as its Chairman and Chief Executive Officer from 1996 to 1998. He retired as Chairman of Arvin Industries, Inc. in 1999. He currently serves as a director of Cooper Tire and Rubber Company.

Benjamin J. Virgilio has been a Director of Holdings since 1998. He is currently the President and Chief Executive Officer of BKJR, Inc. of Toronto, Canada. From July 2000 until February 2001, Mr. Virgilio was the Chairman of Robotic Technology Systems, Inc. From May 1995 to July 2000, Mr. Virgilio was the President and Chief Executive Officer of Rea International Inc., an automotive fuel systems manufacturer. Prior to May 1995, Mr. Virgilio was a business consultant. From February 1981 to November 1993, he was President and Chief Executive Officer of A.G. Simpson Limited. Mr. Virgilio currently serves as a director of Numatech Industries, and Jacob’s Ladder, a charitable research foundation.

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Anthony Bellantuoni joined Holdings in September of 2007 as Vice President of Human Resources. He also serves as Vice President and Secretary of GSI and MES and a Director of MES. Prior to joining the Company, Mr. Bellantuoni was employed at Dassault Systemes where he served as Vice President of Human Resources for their ENOVIA Division. Prior to that, he was Vice President, Human Resources and Administration for the SIMULIA Division of Dassault Systemes, formerly privately held ABAQUS, Inc. Before joining ABAQUS, Mr. Bellantuoni was Senior Vice President of Human Resources at ePresence, formerly Banyan Systems, and held various human resources management roles at Wang Laboratories, Inc. including assignments in Hawaii, Sydney, Australia and Brussels, Belgium.

Philippe Brak joined the Company on January 2, 2008 as Vice President and General Manager for the Company’s lasers business. Prior to joining the Company, Mr. Brak was President and CEO of NP Photonics, a fiber laser company, where he served initially as Vice President, Sales and Marketing. Before joining NP Photonics, Mr. Brak was employed at Gigabit Optics, where he established its worldwide distribution networks. Prior to that, he spent 16 years at Spectra-Physics Lasers, Inc. in various General Management and Sales and Services Management roles in Europe and in the USA, including Vice President and General Manager for the company’s worldwide OEM business.

Stephen Webb became Managing Director of Westwind Air Bearings Ltd. in February 2003. Westwind was acquired by Holdings in December 2003. From 2001 to 2003, Mr. Webb was Operations Director at Oxford Instruments Analytical, a maker of subsystems for electron microscopes and NMR equipment. Prior to 2001, he was Operations Director at EEV Ltd., a maker of semiconductor and microwave components used in a broad range of niche applications from gas sensing to satellites.

C. Prepetition Financing

The Debtors have no material secured debt. In August 2008, in order to finance a portion of the Excel acquisition, GSI issued and sold the Senior Notes to various investors.

D. Events Leading to the Commencement of the Chapter 11 Cases.

1. Reasons for the Company’s Delay in Filings Periodic Reports, Revenue Recognition Issues and Audit Committee Review

In August 2008, Holdings closed its acquisition of Excel. Delays in the integration of the financial accounting systems of Holdings and Excel following the acquisition initially led to a delay of several weeks in the preparation of Holdings’ Quarterly Report on Form 10-Q for the quarterly period ended September 26, 2008 (the “2008 Q3 Report”). Shortly thereafter and prior to filing the 2008 Q3 Report, on December 4, 2008, Holdings announced that it had identified potential errors in the recognition of revenue related to sales to a customer in the first and second fiscal quarters of 2008 in Holdings’ Semiconductor Systems Segment, which were brought to the attention of the Audit Committee of Holdings’ Board of Directors (the “Audit Committee”) by Holdings’ management. Following an initial internal review, the Audit Committee, in consultation with Holdings’ outside legal counsel and its independent auditors, Ernst & Young (“E&Y”), determined that it was appropriate to undertake an independent review of the potential revenue recognition issues brought to its attention.

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On or about November 25, 2008, the full Audit Committee took over the investigation and initiated a broader review of sales transactions in Holdings’ Semiconductor Systems Segment, along with other sales transactions that contain arrangements with multiple deliverables for fiscal years 2007 and 2008. The review was subsequently expanded to include fiscal year 2006. After the Audit Committee took over the investigation, the Audit Committee retained independent legal counsel and forensic accounting experts to assist it in its review.

Initially, Holdings identified revenue of approximately $8,982,000 recognized in the first fiscal quarter ended March 28, 2008 and revenue of approximately $7,194,000 recognized in the second fiscal quarter ended June 27, 2008 that should have been deferred until the delivery of additional equipment in accordance with EITF 00-21 Revenue Arrangements with Multiple Deliverables. Accordingly, the Audit Committee determined, as announced in a press release on December 4, 2008, that it identified errors in the recognition of revenue related to sales to a customer in the first and second fiscal quarters of 2008 in Holdings’ Semiconductor Systems Segment and that the previously issued financial statements contained in Holdings’ Quarterly Reports on Form 10-Q for the periods ended March 28, 2008 and June 27, 2008 should no longer be relied upon.

Subsequently, Holdings announced that it had identified additional revenue recognition errors related to the timing of revenue recognition from sales to certain Semiconductor Systems Segment customers during fiscal year 2007. The Audit Committee concluded, upon the recommendation of Holdings’ management, that the range of potential adjustments resulting from the identified errors is material to the financial statements of Holdings for the periods indicated and as a result, the Audit Committee determined that the previously issued interim and annual historical financial statements for 2007 should no longer be relied upon. The Audit Committee thereafter expanded the scope of its investigation to include fiscal year 2006.

On March 30, 2009, Holdings announced that it had identified additional revenue recognition errors related to the timing of revenue recognition from sales to certain Semiconductor Systems Segment customers during fiscal year 2006. The Audit Committee concluded, upon the recommendation of Holdings’ management, that the range of potential adjustments resulting from the identified errors is material to the financial statements of Holdings for the periods indicated and as a result, the Audit Committee determined that the previously issued interim and annual historical financial statements for 2006 should no longer be relied upon.

The Audit Committee’s advisors reported the results of the investigation to Holdings’ Audit Committee on April 24, 2009. Holdings voluntarily reported the investigation results to the SEC on April 30, 2009. Thereafter, on June 30, 2009, Holdings announced that it was undertaking a preliminary review of the timing of revenue recognized in connection with multiple element arrangements in its Precision Technology Segment from 2004 through 2008 to determine if adjustments need to be made to those periods.

On May 14, 2009, Holdings received a notice from the SEC indicating that the SEC is conducting a formal investigation, In the Matter of GSI Group, Inc. (3-02420), relating to Holdings’ identified errors in the timing of recognition of revenue from sales to certain Semiconductor Systems Segment customers from 2005 through 2008. Holdings intends to cooperate fully with the SEC’s investigation. Holdings cannot predict the outcome of the investigation at this time.

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On August 31, 2009, Holdings announced approximate ranges of restated revenues in its Precision Technology Segment during fiscal years 2004 through 2008.

2. As of November 18, 2009, Holdings has completed its determination of the revenue adjustments in both its Semiconductor Systems and Precision Technology Segments, and is in the process of finalizing its restated financial reports, which the Company currently expects to file promptly. The Securities Class Action

On December 12, 2008, in connection with the delayed filing of its results for the quarter ended September 26, 2008, and the announcement of a review of revenue transactions, a putative shareholder class action entitled Wiltold Trzeciakowski, Individually and on behalf of all others similarly situated v. GSI Group Inc., Sergio Edelstein, and Robert Bowen, Case No. 08-cv-12065 (GAO) (the “Securities Class Action”), alleging federal securities violations was filed in the United States District Court for the District of Massachusetts (“District Court”) against Holdings and certain of Holdings’ current and former officers and directors. The complaint alleges that Holdings and the individual defendants violated Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, and seeks recovery of damages in an unspecified amount. The action was brought on behalf of a putative class of purchasers of Holdings’ stock (as may be modified, the “Putative Class”) between April 30, 2008 and December 3, 2008 (the “Class Period,” which is subject to amendment). A lead plaintiff (the “Lead Plaintiff”) was appointed on May 8, 2009. Lead Plaintiff alleges that the defendants in the Securities Class Action made false and/or misleading statements and/or alleges that defendants failed to disclose: 1) that Holdings improperly recognized revenue; 2) that as a result, Holdings misstated its financial results during the Class Period, 3) that Holdings’ financial results were not prepared in accordance with Generally Accepted Accounting Principles; 4) that Holdings lacked adequate internal and financial controls; and 5) as a result of the above, Holdings’ financial statements were materially false and misleading. On July 1, 2009, the District Court ordered the Lead Plaintiff to file a consolidated or amended complaint within 30 days of Holdings’ filing of restatements for certain of its historical financial results with the SEC. On December 23, 2009, the parties to the Securities Class Action entered into a stipulation extending the deadline for Lead Plaintiff to file a consolidated or amended complaint against individual defendants Sergio Edestein and Robert Bowen to February 5, 2010. Because of the automatic stay in bankruptcy, Holdings was not involved in the stipulation. However, Lead Plaintiff reserved the right in the stipulation to seek leave to amend its operative complaint at an appropriate later date to litigate the case against Holdings. The defendants reserved the right to file a motion to dismiss or seek alternative relief on the grounds that all claims, including those against the individual defendants, should be stayed. Due to the preliminary status of the action and the uncertainties related to litigation, Holdings cannot predict its ultimate outcome at this time. However, even if Holdings’ defense is successful, defense of the litigation could require significant management time and could be costly. Should Holdings not prevail in this litigation matter, Holdings’ operating results, financial position and cash flows could be adversely impacted.

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Holdings’ current directors and officer insurance policies are comprised of (i) a primary policy with ACE American Insurance Company with a coverage of $10,000,000, (ii) an excess policy with Federal Insurance Company with a coverage of $10,000,000, and (iii) an additional policy with Steadfast Insurance Company covering directors and officers for non-indemnifiable claims with a coverage of $7,000,000. The coverage requires Holdings to itself absorb the first $500,000 of expenses or liability in the nature of a so-called “deductible” or “retention” amount. Holdings believes that the coverage under these policies is sufficient to cover any claims arising out of the Securities Class Action and, to the extent legally required, intends to assume each of these insurance policies as executory contracts. As such, Holdings intends to rely on the above described insurance policies to fully cover any amount that may be asserted pursuant to the Securities Class Action. Lead Plaintiff asserts that the damages in the Securities Class Action may exceed the amount of the available insurance.

Under the Plan, Class 6A (Holdings Equity Interests) includes any Claim subordinated pursuant to section 510(b) of the Bankruptcy Code arising from the rescission of a purchase or sale of any Equity Interest or rights relating to any Equity Interest, or any Claim for damages arising from the purchase or sale of any Equity Interest, including, in each case, common shares of Holdings or any Claim for reimbursement, contribution, or indemnification arising from or relating to any such Claims. Because of the nature of the claims alleged in the Securities Class Action, the Lead Plaintiff and the Putative Class may be entitled to share, to the extent of any liability of Holdings by settlement or judgment not fully covered by applicable insurance, in the distribution to holders of Allowed Class 6A Holdings Equity Interests of New Common Shares, New $1.10 Warrants and New $2.00 Warrants. On account of the insurance coverage described above, Holdings does not believe that any such sharing or dilution would be material.

3. NASDAQ Proceedings

On November 13, 2008, Holdings received a Delinquency Compliance Alert Letter from The Nasdaq Stock Market (“Nasdaq”), indicating that Holdings was not in compliance with Listing Rule 5250(c)(1) (formerly Nasdaq Marketplace Rule 4310(c)(14)) (the “Rule”), since Holdings had not yet filed its 2008 Q3 Report. As requested by Nasdaq, on January 12, 2009, Holdings timely submitted to Nasdaq a compliance plan, which was subsequently supplemented, outlining Holdings’ planned actions to regain compliance with the Rule. Based on Nasdaq’s review of the compliance plan, on February 11, 2009, Nasdaq gave Holdings notice indicating that it had been granted an extension until May 4, 2009 to file its Q3 2008 Report with the SEC and regain compliance with the Rule.

Due to the aforementioned Audit Committee review, Holdings was unable to timely file its Annual Report on Form 10-K for the year ended December 31, 2008, and subsequently received another Delinquency Compliance Alert Letter from Nasdaq on March 27, 2009. Having failed to regain compliance with the Rule within the extension period granted to Holdings by Nasdaq, on May 6, 2009, Nasdaq delivered to Holdings a Staff Determination Notice stating that Holdings’ stock is subject to delisting. Thereafter, in accordance with Nasdaq procedures, Holdings requested a hearing before the Nasdaq Listing Qualifications Panel (the “Panel”) to appeal the Staff Determination and address the delayed filing of Holdings’ periodic reports. The hearing before the Panel was held on June 11, 2009. At Holdings’ request, Nasdaq granted Holdings a stay of delisting pending Holdings’ scheduled hearing.

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In its submission to the Panel, Holdings informed the Panel that the filing delay was due, in large part, to the Audit Committee’s investigation of Holdings’ revenue recognition of sales transactions in Holdings’ Semiconductor Systems Segment. Holdings also informed the Panel that the investigation was completed in May 2009 and, barring any unforeseen issues, Holdings expected to complete its revenue restatement and regain compliance with the Rule by September 30, 2009, and by no means later than October 31, 2009.

Holdings further informed the Panel that it had substantially completed its review of revenue transactions in the Semiconductor Systems segment for fiscal years 2006 through 2008 for purposes of finalizing its financial statements. Finally, Holdings informed the Panel that the Audit Committee referred two additional reviews to Holdings, which Holdings expected to complete within the timeframe set out in the compliance plan: (i) a review of revenue transactions in its Semiconductor Systems segment for fiscal years 2004 and 2005; and (ii) a review of revenue transactions in Holdings’ Precision Technology segment. Because Holdings was managed by persons other than current management in fiscal years 2004 and 2005, that review was not the subject of a protracted independent investigation.

On July 22, 2009, Holdings announced that the Panel granted Holdings’ request for continued listing on Nasdaq. The Panel’s determination was conditioned on Holdings (i) reporting to the Panel on or before August 31, 2009, the status of its public disclosure about the range of adjustments Holdings expects to make to revenue transactions in its Precision Technology Segment for 2004 through 2008 and (ii) filing on or before November 2, 2009, its delayed periodic reports and any required restatements. On August 31, 2009, Holdings issued a press release announcing, among other matters, approximate ranges of restated revenues in its Precision Technology Segment during fiscal years 2004 through 2008. While Holdings continues to work diligently to complete the preparation and filing of its delayed periodic reports, in addition to its restated financial statements for fiscal years 2006, 2007 and 2008, Holdings was not able to meet the November 2, 2009 deadline. Accordingly, on November 3, 2009, Holdings received notification from the Panel that the Panel determined to delist Holdings’ shares from Nasdaq and suspended trading in Holdings’ shares effective at the open of business on November 5, 2009.

As provided under applicable Nasdaq rules, Holdings timely requested a review of the Panel’s delisting determination by the Nasdaq Listing and Hearing Review Council (the “Listing Council”). In addition, in accordance with Nasdaq rules, both the Listing Council and the Board of Directors of The Nasdaq Stock Market LLC (the “Nasdaq Board”) may call the Panel’s decision for review. Under the applicable Nasdaq rules, the Listing Council cannot grant an exception to Holdings beyond November 2, 2009 (which is 360 days from the due date of the first late periodic report). There can be no assurances, however, that Holdings’ request for review will be successful, that either the Listing Council or the Nasdaq Board will call the decision for review, or that Holdings’ common stock will not be delisted.

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4. Discussions with Noteholders

In connection with Holdings’ failure to file the 2008 Q3 Report, on December 12, 2008, Holdings announced that it had received four letters from certain Noteholders of its Senior Notes, alleging that Holdings had failed to comply with the covenant in Section 4.02 of the Senior Note Indenture as a result of Holdings’ failure to file its 2008 Q3 Report within the time period specified by the rules and regulations of the SEC. These Noteholders further alleged that, if such failure continued for 60 days from the date that Holdings received notices of failure from Holders comprising at least 25% of the aggregate principal amount of Senior Notes then outstanding, then such failure would constitute an event of default. Although Holdings did not believe that the letters constituted proper notice as required pursuant to the terms of the Indenture, and notified the trustee under the Indenture as such, Holdings continued to work diligently to complete the review by its Audit Committee and to file its 2008 Q3 Report to avoid any claim of an “Event of Default” from occurring under the Indenture. Upon receipt of the letters from the Noteholders, Holdings began engaging in ongoing discussions with the Noteholders. On February 11, 2009, Holdings announced that it entered into forbearance agreements with certain Noteholders holding greater than 75% of the outstanding aggregate principal amount of the Notes, pursuant to which such Noteholders agreed to forebear from taking any action or exercising any remedies under the Senior Note Indenture as a result of Holdings’ delayed periodic reports until February 27, 2009, pursuant to other terms and conditions more specifically set forth therein.

Subsequent to the Forbearance Agreements, the Debtors continued to engage the Noteholders in discussions regarding possible restructuring of its debt. On June 30, 2009, Holdings announced that it reached an agreement on a non-binding term sheet with the Noteholders to consensually restructure Holdings’ outstanding obligations under the Senior Notes. Since that time, Holdings has conducted an extensive process to identify possible alternatives to the transactions described in the Plan, and has concluded that the transactions described in the Plan provide the highest and best treatment for all creditors of the Debtors’ estates, Holdings’ shareholders and the Company’s customers, vendors and employees.

For a variety of reasons, the Equity Committee believes that the process the Debtors undertook to identify possible alternatives to the transactions negotiated with the holders of Senior Notes was insufficient to enable the Debtors to maximize their value or to establish that the Plan provides the highest and best treatment for Holdings’ shareholders.

Following negotiations between the Debtors and certain of the Noteholders about the restructuring, the Debtors and certain of the Noteholders entered into the Plan Support Agreement on November 19, 2009. On the Petition Date, the Debtors filed a motion for authority to assume and for approval of the Plan Support Agreement. The Bankruptcy Court approved the motion on December 18, 2009. Pursuant to the Plan Support Agreement, as filed with and approved by the Bankruptcy Court, holders of 88.1% of the outstanding principal amount of the Senior Notes have agreed to vote for the Plan to the extent the Debtors continue to comply with the terms and conditions of the Plan Support Agreement.

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Under the terms of the Plan Support Agreement, substantially based on the term sheet announced by the Debtors on June 30, 2009, the Debtors agreed to exchange the Senior Notes and the GSI UK Note for (a) a new $104.1 million secured loan due August 2014, (b) New Common Shares representing 81.4% of Holdings’ fully diluted equity ownership and (c) certain Cash Note Payments, resulting in the reduction of the Debtors’ funded indebtedness by more than $125,000,000 and leaving the Debtors’ remaining debt, including all vendor payables and all or substantially all other claims, unimpaired under the Plan. The Plan Support Agreement further provides that, subject to their fiduciary obligations as debtors in possession based upon advice of counsel, the Debtors agreed to use their best efforts to: (a) support and complete the Restructuring (as defined in the Plan Support Agreement) and all transactions contemplated by the Plan; (b) take any and all necessary and appropriate actions in furtherance of the Restructuring; (c) complete the Restructuring and all transactions contemplated under the Plan within the time-frames outlined in the Plan Support Agreement; (d) obtain any and all required regulatory and/or third-party approvals for the Restructuring; and (e) not directly or indirectly seek, solicit, support, consent to, or participate in the negotiation or formulation of (1) any plan of reorganization, proposal, offer, dissolution, winding up, liquidation, reorganization, merger, or restructuring for the Debtors other than the Plan, (2) any disposition inconsistent with the Plan of all or any substantial portion of the assets of the Debtors, or (3) any other action that is inconsistent with, or that would delay or obstruct the proposed solicitation, confirmation, or consummation of, the Plan. The termination rights of the Noteholders under the Plan Support Agreement are discussed in Section VIII.B. – RISK FACTORS – Termination Rights Under Plan Support Agreement.

5. Debtors’ Ability to Meet their Obligations Arising Prior to and Following the Filing of the Plan

The Debtors have met their obligations as they have come due. These obligations have included approximately $23 million of annual interest payments on the Senior Notes, approximately $17 million of non-recurring professional and other costs during the past 12 months related to the review of revenue transactions in both their Semiconductor Systems and Precision Technology business segments, approximately $5 million of non-recurring professional and other costs related to the debt restructuring and $2 million for severance costs. The Debtors had sufficient cash from operations to meet their obligations arising prior to their filing of the Plan and believe that they will continue to have sufficient cash to readily pay when due all ordinary course obligations arising after the commencement of the Chapter 11 Cases. In fact, the Debtors made several motions with respect to continued payment of their ordinary course and similar obligations following the commencement of the Chapter 11 Cases, including payment of Ordinary Course Professionals, payments of Critical Vendor Claims and continuation of their bonus plans and employee awards programs. The Bankruptcy Court approved all of these motions and the Debtors have continued to meet all of their obligations when due following the Petition Date. In this and every other respect, he Debtors are making every effort to commence and implement these cases with as little disruption as possible to their highly valued customers, employees and vendors. The Debtors have operations and subsidiaries around the World, and the continuity of payments and the honor of ordinary course employment benefit, product warranty, customer service and cash management systems and practices, especially in areas not well versed in U.S. bankruptcy law, is critical to the preservation of the Debtors’ enterprise value and the mitigation of reputational and competitive risk. The Debtors respectfully submit that relief in those respects on short notice is especially appropriate where, as here, the only impaired creditors are those who actively support confirmation of a pre-negotiated plan of reorganization filed on the Petition Date.

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V. FINANCIAL PROJECTIONS AND ASSUMPTIONS

A. Purpose and Objectives.

The value of the securities to be issued pursuant to the Plan depend in part upon the ability of the Debtors to achieve the financial results projected on the basis of their assumptions.

In order to maximize creditor recoveries, the Debtors must seek to maximize the value of their businesses. Additionally, for the Plan to meet the feasibility test of section 1129(a)(11) of the Bankruptcy Code, the Bankruptcy Court must conclude that confirmation of the Plan is not reasonably likely to lead to the liquidation or further reorganization of the Debtors.

With these considerations in mind, the Debtors formulated their projections and assumptions, which in turn served as the basis for the Plan. The Debtors believe that the assumptions that serve as the basis for the projections are reasonable under the circumstances and that achieving the projections set forth in the Disclosure Statement will maximize the value of businesses of the Debtors.

B. Pro Forma Financial Projections.

1. Responsibility For and Purpose of the Projections.

The consolidated financial projections (the “Projections”) for the Company, attached hereto as Exhibit “C”, include the expected financial results of the Reorganized GSI Entities as well as the expected results of the Company’s wholly-owned subsidiaries which are not Debtors and are not involved in the Chapter 11 Cases (collectively, the “Reorganized Company”). The Projections were prepared by the Debtors in good faith using assumptions believed to be reasonable. A significant number of assumptions about the operations of the business after emergence from bankruptcy were based, in part, on economic, competitive, and general business conditions prevailing at the time the Projections were developed. Further, and notwithstanding the uncertainty inherent in bankruptcy, these projections do not contemplate any negative impact on the business arising from the Plan. Any future changes in these conditions, including a delay in the consummation of the Plan, may materially impact the ability of the Reorganized Company to achieve the financial results set forth in the Projections. In addition, the Projections have been prepared on the basis that a debt restructuring will occur and the current principal debt balance of $210.0 million owed on the Senior Note and the $20 million owed on the GSI UK Note will be exchanged for New Senior Secured Notes in the amount of $104.1 million and 81.4% of the Debtors’ equity. Holders of the Senior Notes and GSI UK Notes will share pro-rata in both the New Senior Secured Notes and Debtor’s equity. The holders of the Senior Notes and the GSI UK Note will be allocated $95 million and $9.1 million of the $104.1 million New Senior Secured Notes, respectively. The 81.4% equity in the Debtors’ will be allocated 74.3% and 7.1%

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to the Holders of the Senior Notes and the GSI UK Note, respectively. Due to the fact that the holder of the GSI UK Note is wholly-owned foreign subsidiary of the Company, the note and resulting fees and interest associated with its pro-rata share is not reflected as debt or cash disbursements in the Projections of the Company as it is intercompany and eliminated in consolidation.

2. Inherent Uncertainty of the Projections.

The Projections should be read in conjunction with the assumptions and qualifications set forth herein, the footnotes included in the Projections and the Debtors’ historical consolidated financial information (including the notes and schedules thereto). The Projections cover the operations of the Reorganized Company through 2013. The Projections are based on numerous assumptions, including confirmation and consummation of the Plan in accordance with its terms; realization of the operating strategy of the Reorganized Company; industry performance; no material adverse changes in applicable legislation or regulations, or the administration thereof, or generally accepted accounting principles; general business and economic conditions; competition; retention of key management and other key employees; absence of material contingent or unliquidated litigation, indemnity, or other claims; and other matters, many of which will be beyond the control of the Reorganized Company, and some or all of which may not materialize.

Additionally, to the extent that the assumptions inherent in the Projections are based upon future business decisions and objectives, they are subject to change. Although the Projections are presented with numerical specificity and are based on reasonable expectations developed by the Debtors’ management, the assumptions and estimates underlying the Projections are subject to significant business, economic, and competitive uncertainties and contingencies, many of which will be beyond the control of the Reorganized Company. Accordingly, the Projections are only estimates and are necessarily speculative in nature. It can be expected that some or all of the assumptions in the Projections will not be realized and that actual results will vary from the Projections. Such variations may be material and may increase over time. In light of the foregoing, readers are cautioned not to place undue reliance on the Projections. The projected financial information contained herein should not be regarded as a representation or warranty by the Company, the Debtors, the Debtors’ advisors, or any other Person that the Projections can or will be achieved.

The Projections were not prepared in accordance with standards for projections promulgated by the American Institute of Certified Public Accountants or with a view toward compliance with published guidelines of the SEC regarding projections or forecasts. When an entity emerges from Chapter 11 bankruptcy, the emerging entity is a new legal entity. The new legal form of the emerging entity does not, however, dictate the accounting treatment as either a new or continuing entity. The Reorganized Company may qualify for fresh start accounting. Fresh start accounting represents a change in the historical book basis of the assets and liabilities of the reconstituted entities if the reorganization value of the assets is less than the post-petition liabilities and allowed claims and if the pre-petition shareholders lose control of the reconstituted entity by receiving less than 50% of the voting shares of the emerging entity. If either condition is not met, a new reporting entity is not created for accounting purposes and fresh start

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accounting is not applicable. The Consolidated Balance Sheet included in the Projections has been prepared on the assumption that the Reorganized Company is not required to adopt fresh start accounting. Final entries to convert the debt to equity could cause the audited balance sheet to differ significantly from that reflected in the Projections. Additionally, if the Reorganized Company is required to adopt fresh start accounting, the actual adjustments the Reorganized Company will be required to adopt upon emergence may cause the post-emergence balance sheet to differ significantly from the Consolidated Balance Sheet included in the Projections. However, the required entries under either of these scenarios are not expected to impact cash balances significantly. Moreover, the Projections have not been audited, reviewed or compiled by the Debtors’ independent public accountants.

3. Special Note Regarding Forward Looking Statements.

Statements contained in the Disclosure Statement and incorporated by reference therein, including the Projections, may be considered “forward looking statements” within the meaning of federal securities law. Such forward looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Potential risks and uncertainties include, but are not limited to, general economic and business conditions, the competitive environment in which the Reorganized Company operate and will operate, the success or failure of the Reorganized Company to implement their current business and operational strategies, the level of vendor trade support, labor relations and labor costs, the ability of the Reorganized Company to maintain and improve their net sales and margins, the overall liquidity of the Reorganized Company, the ability of the Reorganized Company to timely complete the Restatements and make the necessary filings with the SEC, and the ability of Reorganized Holdings to regain and maintain listing of its common shares.

VI. THE REORGANIZATION CASES

A. Commencement of the Chapter 11 Cases.

On November 20, 2009, Holdings and the other Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Plan and this Disclosure Statement were originally filed with the Bankruptcy Court together with the petition.

B. Continuation of Business after the Petition Date.

The Debtors will continue to operate their businesses and manage their property as Debtors in Possession after the Petition Date. The Debtors will seek the Bankruptcy Court’s approval for all transactions that were outside the ordinary course of their businesses.

The Debtors are making every effort to commence and implement these cases with as little disruption as possible to their highly valued customers, employees and vendors. As set forth in detail below, the Debtors seek immediate entry of orders to effectuate this goal.

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1. First Day Motions

On the Petition Date, the Debtors filed a series of motions seeking various relief from the Bankruptcy Court designed to minimize any disruption of business operations and to facilitate their reorganization. The Bankruptcy Court held a hearing on the “first day motions” and other matters on November 23, 2009, and approved each request by the Debtors.

a. Joint Administration.

In order to expedite the administration of these Chapter 11 Cases and reduce administrative expenses without prejudicing any creditor’s substantive rights, the Debtors sought authority to consolidate all filings under a single case name, in a single docket. The Bankruptcy Court entered an order granting the motion on November 24, 2009.

b. Consolidated List of Creditors.

The Debtors filed a motion seeking permission to file (i) a consolidated list of creditors and (ii) a consolidated list of the Debtors’ thirty (30) largest creditors, as well as permission to complete all mailings of notices, which was approved by the Bankruptcy Court by order entered on November 24, 2009.

c. Retention of Professionals.

The Debtors sought Bankruptcy Court authority to retain and employ certain professionals (the “Professionals”) to represent them and assist them in connection with their Chapter 11 Cases. Some of these Professionals have been intimately involved with the negotiation and development of the Plan and include, among others: (i) Brown Rudnick LLP, as co-counsel for the Debtors; (ii) Saul Ewing LLP, as co-counsel for the Debtors; (iii) Wilson Sonsini Goodrich & Rosati, as corporate counsel for the Debtors; (iv)The Garden City Group, Inc.(“Garden City”), as Claims and Noticing Agent for the Debtors; and (v) CRG Partners (“CRG”), as financial advisor to the Debtors. The Bankruptcy Court entered an order granting authority to retain Garden City on November 24, 2009. After a subsequent hearing to consider the retention applications of the other Professionals described herein, the Bankruptcy Court authorized their retention by orders entered December 18, 2009.

d. Interim Compensation.

In an effort to enable all parties to monitor the costs of administration, enable the maintenance of a more level cash flow availability and implement efficient cash management, the Debtors have developed procedures for interim compensation and reimbursement of expenses of the Professionals. On the Petition Date, the Debtors sought an order establishing certain procedures with which all Professionals would be required to comply in seeking compensation and reimbursement. The Debtors filed a corrected motion on December 7, 2009, which was revised only to address a specific compensation procedure. The Bankruptcy Court entered an order approving the motion, as corrected, on December 18, 2009.

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e. Ordinary Course Professionals.

On the Petition Date, the Debtors sought authority to continue using the services provided by certain “ordinary course professionals” to represent and advise them in matters unrelated to the commencement or administration of these Chapter 11 Cases, without the need to file separate, formal retention applications. The Debtors filed a corrected motion on December 7, 2009, which was revised only to set forth further procedures with respect to the payment of ordinary course professionals, and, on December 17, 2009, filed revised ordinary course professionals lists which added two additional professionals to the Debtors’ proposed lists. The Bankruptcy Court granted the requested relief, by order entered December 18, 2009.

f. Employee Related Matters.

Of particular importance to the Debtors’ efforts to stabilize their businesses and continue their operations uninterrupted was their ability to maintain the continued support and cooperation of their employees. Accordingly, on the Petition Date, the Debtors sought authority to pay certain prepetition obligations owing to the Debtors’ employees, including, but not limited to: (i) amounts owed to employees for wages and salaries; (ii) reimbursement of pre-petition employee business expenses incurred in the ordinary course, such as travel, meals and lodging; (iii) maintenance of employee health and welfare plans, workers’ compensation, 401(k), and other similar benefits; (v) payment of pre-petition tax and other withholdings to third-parties; and (iv) other miscellaneous employee expenses and benefits (the “Employee Wage Motion”).

On November 24, 2009, the Bankruptcy Court entered an order granting the relief requested in the Employee Wage Motion other than (a) the Debtors’ request for authorization to continue their full Bonus Plan and Awards Program as set forth and defined in the Employee Wage Motion, and (b) any of the relief requested in the Employee Wage Motion as to the Debtors’ Insiders, as such term is defined in section 101(31) of the Bankruptcy Code (the “Continued Employee Programs”). After consideration of the Continued Employee Programs at a final hearing held on December 18, 2009, the Bankruptcy Court entered an Order granting the Employee Wage Motion as it relates to the Continued Employee Programs.

g. Cash Management and Investment and Deposit Policies.

As of the Petition Date, the Debtors had in place a cash management system for the collection of receipts and the disbursement of funds. Contemporaneously with the filing of the Petition, the Debtors filed a motion for an order authorizing the Debtors to continue to use their existing cash management system, bank accounts, and business forms; and continue post-petition their system of intercompany transfers (the “Cash Management Motion”).

Continued use of the existing cash management system is essential to facilitate the Debtors’ smooth and orderly transition into chapter 11, minimize the disruption to their businesses while in chapter 11, and expedite their emergence from chapter 11. Requiring the Debtors to adopt and implement a new cash management system would likely increase the costs of the chapter 11 cases, primarily as a result of the significant time and expense associated with the transition to a new cash management system. For the same reasons, requiring the Debtors to cancel their existing bank accounts and establish new accounts or requiring them to create new business forms would only frustrate the Debtors’ efforts to reorganize expeditiously.

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Section 345 of the Bankruptcy Code establishes certain guidelines for the deposit and investment of funds of the Debtors’ Estates. Upon an appropriate showing, such guidelines may be waived by the Bankruptcy Court, and the Debtors may be authorized to continue to deposit and invest their funds pursuant to an existing investment policy. The Debtors believe that strict adherence to the requirements of section 345 would cause significant disruption to their cash management system, to the detriment of the Debtors’ businesses and creditors. The Debtors also believe that their existing investment policies provide for the secure and efficient investment and management of the Debtors’ funds, and that the disruption that would result from compliance with section 345 is not warranted, particularly in light of the anticipated short duration of the Debtors’ chapter 11 cases. Accordingly, the Debtors sought a waiver of the requirements of section 345 so as to permit them to continue their existing deposit and investment policies.

On November 24, 2009, the Bankruptcy Court entered an interim order granting the relief requested in the Cash Management Motion other than the Debtors’ request for authorization to (a) make transfers to their subsidiaries and affiliates, (b) honor and make payments in respect of post-petition intercompany balances to subsidiaries and affiliates, and (c) make such payments on behalf of their subsidiaries and affiliates to third parties in accordance with prior practice (the “Continued Cash Management Program”). After consideration of the Continued Cash Management Program at a final hearing, the Bankruptcy Court entered a final order on December 18, 2009 granting the Cash Management Motion as it relates to the Continued Cash Management Program.

h. Maintenance of Utility Services.

Prior to the Petition Date, in connection with the operation of their businesses and management of their properties, the Debtors obtained a wide range of utility services (collectively, the “Utility Services”) from certain utility companies (the “Utility Companies”), including electricity, telephone and similar service suppliers for which no alternate service can be expected. It is essential that the Utility Services continue uninterrupted after the Petition Date. Accordingly, on the Petition Date, the Debtors sought an order (i) prohibiting the Utility Companies from altering, refusing or discontinuing service to the Debtors, and (ii) establishing procedures for determining requests for additional adequate assurance. An order granting interim relief requested in the motion was entered by the Bankruptcy Court on November 24, 2009. After a final hearing, on December 18, 2009, the Bankruptcy Court entered a final order granting the utilities motion.

i. Payment of Prepetition Taxes and Government Fees.

In the ordinary course of business, the Debtors incur certain sales, use, franchise, income and other taxes, fees for licenses and reporting, and other similar charges and assessments (collectively, the “Taxes”) that are payable directly to various foreign, state and local taxing authorities (collectively, the “Taxing Authorities”) as such payments become

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due. The Debtors have facilities and operations throughout the United States, and GSI has branch offices located in Korea and Taiwan; accordingly, the Debtors are subject to the payment of Taxes to numerous Taxing Authorities located throughout the country and abroad. On the Petition Date, the Debtors sought entry of an order for authority to pay prepetition Taxes owed to the Taxing Authorities in the ordinary course of business, on an unaccelerated basis, as such payments became due and payable and to the extent adequate funds are available to make such payments. The Bankruptcy Court entered an order granting the motion to pay the Taxes on November 24, 2009.

j. Critical Vendors.

On the Petition Date, the Debtors sought entry of an order for authority to pay, in their discretion, (i) certain prepetition claims of critical vendors (the “Critical Vendor Claims”) and (ii) certain obligations arising under section 503(b)(9) of the Bankruptcy Code in connection with goods supplied by vendors that were received by the Debtors in the ordinary course of their businesses within the twenty day period before the Petition Date. The Debtors believe that payment of the Critical Vendor Claims is vital to the Debtors’ reorganization because the Critical Vendors are the only source from which the Debtors can procure certain goods and services within a timeframe and at a price that will permit the Debtors to continue their businesses. The Bankruptcy Court entered an order authorizing the payment of Critical Vendor Claims on November 24, 2009. After a subsequent hearing on December 18, 2009, the Bankruptcy Court entered an order authorizing payment of the section 503(b)(9) claims.

k. Maintenance of Warranty Practices.

Prior to the Petition Date and in the ordinary course of their businesses, the Debtors engaged in certain practices to develop and sustain positive reputations in the marketplace for their products and services, including providing warranties on equipment (collectively, the “Warranties”). On the Petition Date, the Debtors sought entry of an order for authority to honor, in their discretion and subject to certain conditions, their prepetition obligations to customers under the Warranties and to otherwise continue prepetition warranty practices in the ordinary course of business. On November 24, 2009, the Bankruptcy Court entered an order granting the motion.

l. Compliance with and Confirmation of Certain Provisions of the Bankruptcy Code.

To aid in the administration of the Debtors’ bankruptcy cases and to provide the Debtors with the breathing space to focus on maximizing the value for their stakeholders, the Debtors requested an order that confirms the application of three key protections afforded to the Debtors under the Bankruptcy Code: (a) the automatic stay provisions of section 362; (b) the anti-termination and anti-modification provisions of section 365; and (c) the anti-discrimination provisions of section 525. The Debtors believe that the extensive and global nature of the Debtors’ businesses and their wide-range dealings with non-U.S. creditors and other parties who are unfamiliar with the protections afforded chapter 11 debtors under the Bankruptcy Code require that an order implementing these protections be entered by the bankruptcy court.

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In addition, the Debtors sought entry of an order confirming: (a) the administrative expense priority status of the Debtors’ undisputed and liquidated obligations to suppliers for the postpetition delivery of requested goods; and (b) that the Debtors have the authority to pay such expenses in the ordinary course of their businesses. The Debtors believe that, as a result of the Debtors’ filing of their chapter 11 cases, many suppliers, particularly foreign or unsophisticated suppliers, may perceive a risk that they will not be paid or may be treated as prepetition general unsecured creditors for the cost of any shipments made after the Petition Date. As such, the Debtors sought entry of an order confirming the Debtors’ undisputed and liquidated obligations to suppliers for shipments of goods received after the Petition Date – relief which is uncontroversial and merely confirms the treatment of such postpetition obligations under the Bankruptcy Code.

On November 24, 2009, the Bankruptcy Court entered orders granting the relief requested in both of these motions.

C. Representation of the Debtors.

In 2008, the Debtors retained Wilson Sonsini Goodrich & Rosati (“WSGR”) to provide legal advice with respect to various corporate matters. Subsequently, WSGR has provided legal advice with respect to a variety of issues including the restatement of Holdings’ financial statements and NASDAQ matters described in “Events Leading to the Commencement of the Chapter 11 Cases” above. The Debtors retained Brown Rudnick LLP (“BR”) in March 2009 and Saul Ewing LLP (“SE”) in September 2009 to provide legal advice with respect to the restructuring and bankruptcy proceedings, and preparation of the requisite petitions, pleadings, exhibits, lists and schedules in connection with the commencement of the Chapter 11 Cases.

Prior to the Petition Date, the Debtors employed certain professionals, in the ordinary course of business, to render services to their Estates (collectively, the “Ordinary Course Professionals”), including legal services and certain accounting, tax and consulting services, which were necessary to the day-to-day continuation of the Debtors’ operations.

In addition to WSGR, BR and SE, and the Ordinary Course Professionals, the Debtors requested, and received, approval from the Bankruptcy Court for the retention of Garden City and CRG as described above; Ernst & Young LLP, as Auditor as to accounting restatement matters to the Debtors; and FTI Consulting, Inc., to provide consulting services to the Debtors.

D. Matters Relating to Unexpired Leases and Executory Contracts.

Section 365 of the Bankruptcy Code grants the Debtors the power, subject to the approval of the Bankruptcy Court, to assume or reject executory contracts and unexpired leases. If an executory contract or unexpired lease is assumed, the rights of the Debtor party to such agreement continue as property of the Debtors’ Estates. A subsequent breach of an assumed lease or executory contract creates an Administrative Claim in favor of the non-debtor

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counterparty, entitling it to an Administrative Claim for prepetition obligations as well as post- petition obligations arising as a result of the breach. If an executory contract or unexpired lease is rejected, the non-debtor counterparty to the agreement may file a claim for damages incurred by reason of the rejection, which is treated as a prepetition claim. In the case of rejection of leases of real property, such damage claims are subject to certain claim amount limitations imposed by the Bankruptcy Code. For a description of the special bar date established on account of such claims, see “The Reorganization Cases — Schedules; Bar Date; Claims Objection and Estimation Procedures,” below.

Generally, debtors have until the confirmation date of a chapter 11 plan to assume executory contracts and unexpired leases to which they are a party. An exception to the foregoing is set forth in section 365(d)(4) of the Bankruptcy Code, which provides that if a debtor does not assume or reject an unexpired lease of nonresidential real property under which a debtor is the lessee (i) within 120 days after the petition date, (ii) within a 90-day additional period as the bankruptcy court, for cause, fixes, or (iii) within such additional time as the bankruptcy court, for cause, fixes with the consent of the landlord of the leased premises, then such lease is deemed rejected.

On the Petition Date, the Debtors filed a motion seeking the entry of an order of the Bankruptcy Court authorizing the assumption of the Plan Support Agreement under Section 365 of the Bankruptcy Code (the “Assumption Order”). The Assumption Order was approved on December 18, 2009.

E. Exclusivity Periods.

Pursuant to sections 1121(b) and (c)(3) of the Bankruptcy Code, the Debtors have: (a) the Filing Period within which to file the Plan; and (b) the Solicitation Period to solicit acceptances of this timely filed Plan before other parties in interest are permitted to file plans. As the Debtors’ Plan was filed with the Petition, no other creditor or party in interest may file a plan until the expiration of the Solicitation Period. The initial Solicitation Period will expire on May 19, 2010.

F. Schedules; Bar Dates; Claims Objections and Estimated Amount of Claims.

1. Schedules and Bar Dates.

On January 4, 2010, the Debtors filed their schedules of assets and liabilities, schedules of executory contracts and unexpired leases, and statements of financial affairs.

The Debtors intend to file a motion requesting that the Bankruptcy Court enter an order establishing a specific deadline for filing proofs of claims against the Debtors (the “Bar Date”) and approving the form and manner of notice of such Bar Date. Upon the Bankruptcy Court’s entry of an order establishing a Bar Date, the Debtors intend to mail the notice of Bar Date and a proof of claim form to, among others, all known persons and entities holding potential prepetition claims against the Debtors.

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2. Estimation of Claims.

The Debtors will examine all of the Claims. As of the date hereof, the Debtors estimate the total amount of filed and scheduled Claims against the Debtors will be substantially as follows: Administrative Claims — $8,800,000; Tax Claims — $300,000; Priority Claims — $1,600,000; Secured Claims — $1,000,000; General Unsecured Claims — $5,100,000; Intercompany Claims — $155,900,000; and Note Claims — $237,400,000.

G. Significant Motions During Chapter 11 Cases.

Restrictions on Trading in Equity Securities.

On December 23, 2009, the Debtors filed a motion with the Bankruptcy Court seeking to establish notice and hearing procedures and restrictions on trading in equity securities of the Debtors in order to preserve, to the extent possible, the potential value of the Debtors’ net operating losses and other tax attributes, both during the pendency of the Chapter 11 Cases and following the effective date of a plan. The notification procedures and trading restrictions, if imposed, would apply to an investor that is or becomes a “Substantial Shareholder,” which is defined in the motion as any person or entity which beneficially owns at least 2,152,945 shares (representing approximately 4.5% of all issued and outstanding shares as of December 10, 2009) of the common stock of Holdings. “Beneficial ownership” of Holdings stock is determined in accordance with applicable federal tax rules that, among other things, take into account direct and indirect ownership, ownership by related parties, and options to acquire the stock. The proposed motion was pending as of the filing of this Disclosure Statement, and scheduled to be heard by the Bankruptcy Court on January 8, 2010.

VII. THE CHAPTER 11 PLAN

As a result of the chapter 11 process and through the Plan, the Debtors expect that creditors will obtain a substantially greater recovery from the Estates than the recovery that would be available if the Assets had been liquidated under chapter 7 of the Bankruptcy Code. The Plan is annexed hereto as Exhibit “A” and forms part of this Disclosure Statement. The summary of the Plan set forth below is qualified in its entirety by the more detailed provisions set forth in the Plan.

A. Classification and Treatment of Claims and Equity Interests.

For the purposes of organization, voting and all confirmation matters, except as otherwise provided herein, all Claims against and all Equity Interests in each if the Debtors shall be classified as set forth below.

1. Administrative Claims and Tax Claims.

As provided by section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Tax Claims shall not be classified under the Plan, and shall instead be treated separately as unclassified Claims and in accordance with sections 1129(a)(9)(A) and 1129(a)(9)(C) of the Bankruptcy Code, respectively. Such Claims are not designated as classes of Claims for the purposes of the Plan or for the purposes of sections 1123, 1124, 1125, 1126 or 1129 of the Bankruptcy Code.

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a. Treatment of Administrative Claims.

Pursuant to Section 4.2 of the Plan, all Administrative Claims shall be treated as follows and shall be allocated among the Debtors, as determined by the Bankruptcy Court, on a fair and equitable basis:

The holder of an Administrative Claim, other than (i) a Fee Claim, (ii) a liability incurred and payable in the ordinary course of business by a Debtor (and not past due), or (iii) an Administrative Claim that has been Allowed on or before the Effective Date, must file with the Bankruptcy Court and serve on the Debtors, any Committee and the Office of the United States Trustee, notice of such Administrative Claim within forty (40) days after service of Notice of Confirmation. Such notice must include at a minimum (A) the name of the Debtor(s) which are purported to be liable for the Claim, (B) the name of the holder of the Claim, (C) the amount of the Claim, and (D) the basis of the Claim. Failure to file and serve such notice timely and properly shall result in the Administrative Claim being forever barred and discharged.

Each Professional Person who holds or asserts a Fee Claim shall be required to file with the Bankruptcy Court, and serve on all parties required to receive notice, a Fee Application within thirty (30) days after the Effective Date. The failure to timely file and serve such Fee Application shall result in the Fee Claim being forever barred and discharged.

An Administrative Claim with respect to which notice has been properly filed and served pursuant to Section 4.2(a) of the Plan shall become an Allowed Administrative Claim if no objection is filed within thirty (30) days after the later of (i) the Effective Date, or (ii) the date of service of the applicable notice of Administrative Claim or such later date as may be approved by the Bankruptcy Court on motion of a party in interest, without notice or a hearing. If an objection is filed within such thirty (30) day period (or any extension thereof), the Administrative Claim shall become an Allowed Administrative Claim only to the extent allowed by Final Order. A Fee Claim in respect of which a Fee Application has been properly filed and served pursuant to Section 4.2(b) of the Plan shall become an Allowed Administrative Claim only to the extent allowed by order of the Bankruptcy Court.

Each Allowed Administrative Claim shall, at the sole option of the Debtors, receive (i) on the Plan Distribution Date, the amount of such Allowed Claim in Cash, (ii) with respect to Allowed Administrative Claims representing liabilities incurred in the ordinary course of business by the Debtors, payment when and as such Administrative Claims become due and owing by their ordinary course terms, or (iii) such other treatment as may be agreed upon in writing by the Debtors or the Disbursing Agent, as the case may be, and the holder of such Claim; provided, that such treatment shall not provide to the holder of such Claim a return having a present value as of the Effective Date in excess of such Allowed Administrative Claim. If a portion of an Administrative Claim is disputed, the undisputed portion of such Administrative Claim shall be timely paid as provided above.

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All payments made in respect of Allowed Administrative Claims pursuant to this Section shall be allocated among the Debtors, as determined by the Debtors in consultation with the Disbursing Agent (or, but only if there is a dispute as to the same, by the Bankruptcy Court), on a fair and equitable basis.

b. Treatment of Tax Claims.

Pursuant to Section 4.3 of the Plan, at the election of the Debtors, each Allowed Tax Claim shall receive, in full satisfaction of such Allowed Tax Claim, (a) the amount of such Allowed Tax Claim, with Post-Confirmation Interest thereon, in equal annual Cash payments on each anniversary of the Effective Date, until the sixth anniversary of the date of assessment of such Tax Claim (provided that the Debtors may prepay the balance of any such Allowed Tax Claim at any time without penalty); (b) a lesser amount in one Cash payment as may be agreed upon in writing by the holder of such Claim; or (c) such other treatment as may be agreed upon in writing by the holder of such Claim and the Debtors; provided, that such agreed-upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such holder’s Allowed Tax Claim. The Confirmation Order shall enjoin any holder of an Allowed Tax Claim from commencing or continuing any action or proceeding against any responsible person, officer or director of the Debtors that otherwise would be liable to such holder for payment of a Tax Claim so long as the Debtors are in compliance with Section 4.3 of the Plan. So long as the holder of an Allowed Tax Claim is enjoined from commencing or continuing any action or proceeding against any responsible person, officer or director under Section 4.3 of the Plan or pursuant to the Confirmation Order, the statute of limitations for commencing or continuing any such action or proceeding shall be tolled.

2. Debtor Claims and Equity Interests.

The classes of Claims against the Debtors and the Equity Interests in the Debtors shall be treated under the Plan as follows:

Classes 1A, 1B and 1C (collectively “Class 1”) – Priority Claims. Each Allowed Priority Claim against any of the Debtors shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all legal, equitable and contractual rights as to an Allowed Priority Claim shall be fully reinstated and retained, and such Allowed Priority Claim shall, at the sole option of the applicable Debtor, receive the following treatment: (i) be paid on the Plan Distribution Date in full in Cash with Post-Petition Interest from the Petition Date through the Effective Date; (ii) be paid in accordance with the terms under which such Allowed Priority Claim arose, or (iii) receive such other treatment as may be agreed upon in writing by the holder of such Claim; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed Priority Claim.

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Classes 2A, 2B and 2C (collectively “Class 2”) – Secured Claims. Each Allowed Secured Claim against any of the Debtors shall be unimpaired under the Plan and at the sole option of the applicable Debtor, shall receive the following treatment: (i) shall receive on the Plan Distribution Date on account of such Allowed Secured Claim a Cash payment in an amount equal to the amount of the Allowed Secured Claim as of the Effective Date with Post-Petition Interest from the Petition Date through the Effective Date; (ii) shall retain its liens securing such Allowed Secured Claim and receive on account of such Allowed Secured Claim deferred cash payments having a present value on the Effective Date equal to the amount of such Allowed Secured Claim with Post-Petition Interest from the Petition Date through the Effective Date; (iii) shall realize the “indubitable equivalent” of such Allowed Secured Claim; (iv) the property securing the Allowed Secured Claim shall be sold free and clear of liens, with such liens to attach to the proceeds of the sale and the treatment of such liens on proceeds as provided in clause (ii), (iii) or (vi) of this subparagraph; (v) if such Allowed Secured Claim is subject to a valid right of recoupment or setoff, such Claim shall be setoff to the extent of the amount subject to setoff in accordance with sections 506(a) and 553 of the Bankruptcy Code; (vi) shall retain its liens securing such Allowed Secured Claim and be paid in accordance with the terms under which such Allowed Secured Claim arose; or (vii) shall receive such other treatment as may be agreed upon in writing by the holder of such Claim and such Debtor; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed Secured Claim.

Classes 3A, 3B and 3C (collectively “Class 3”) – General Unsecured Claims. Each Allowed General Unsecured Claim against the Debtors shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all legal, equitable and contractual rights as to such Allowed General Unsecured Claim shall be fully reinstated and retained, and such Allowed General Unsecured Claim shall, at the sole option of the Debtors, receive the following treatment: (i) be paid on the Plan Distribution Date in full in Cash with Post-Petition Interest from the Petition Date through the Effective Date; (ii) be paid in accordance with the terms under which such Allowed General Unsecured Claim arose; or (iii) receive such other treatment as may be agreed upon in writing by the holder of such Claim and Debtors; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed General Unsecured Claim.

Classes 4A, 4B and 4C (collectively “Class 4”) – Intercompany Claims. Each Allowed Intercompany Claim against the Debtors shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all legal, equitable and contractual rights as to an Allowed Intercompany Claim shall be fully reinstated and retained, and such Allowed Intercompany Claim shall, at the sole option of the applicable Debtor, receive the following treatment: (i) be paid in accordance with the terms under which such Allowed Intercompany Claim arose, or (ii) receive such other treatment as may be agreed upon in writing by the holder of such Claim; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed Intercompany Claim.

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Classes 5A, and 5B (collectively “Class 5”) – Note Claims. On the Plan Distribution Date, each Allowed Note Claim shall receive the following in full satisfaction of such Allowed Note Claim:

(i) a payment in Cash for interest (at the non-default rate) due under such Allowed Note Claim to the extent such interest is accrued, due and payable under the Allowed Note Claim and unpaid as of the Petition Date, at the contractual (non-default) rate provided in such Senior Note or GSI UK Note, as applicable, if any;

(ii) a payment in Cash for all reasonable fees, expenses (including, without limitation, all amounts payable to the Indenture Trustee) and all other amounts (other than principal, accrued interest or any penalties) due under such Allowed Note Claim to the extent such fees, expenses and other amounts are due and payable under the Allowed Note Claim and unpaid as of the Effective Date;

(iii) a Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 5 Note Claims, which total amount in the aggregate shall be equal to 81.4% of the Outstanding Capital Stock of Reorganized Holdings;

(iv) a Pro Rata Share of the New Senior Secured Notes; and

(v) a Pro Rata Share of the Cash Note Payment.

Class 6A - Holdings Equity Interest. On the Effective Date, all Allowed Holdings Equity Interests shall be cancelled, and on account of each Holdings Equity Interest there shall be distributed on the Plan Distribution Date:

(i) a Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 6A Holdings Equity Interest, which total amount shall be 18.6% of the Outstanding Capital Stock of Reorganized Holdings;

(ii) a Pro Rata Share of New $1.10 Warrants; and

(iii) a Pro Rata Share of New $2.00 Warrants.

All Holdings Equity Interests which are either unexercised or unvested as of the Voting Record Date (and therefore are not included in the definition of Holdings Equity Interests) and all Rights shall be cancelled and terminated on the Effective Date, and the holders of such unexercised or unvested Equity Interests and Rights shall neither receive nor retain any property under the Plan on account of such unexercised or unvested Equity Interests and Rights unless the Bankruptcy Court orders otherwise.

Class 6B – GSI Equity Interests. Each GSI Equity Interest shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights as to such Equity Interests shall be fully reinstated and retained on and after the Effective Date and shall become Equity Interests held by Reorganized Holdings pursuant to the terms of the Plan.

Class 6C – MES Equity Interests. Each MES Equity Interest shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights as to such Equity Interests shall be fully reinstated and retained on and after the Effective Date.

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B. Means for Implementation of the Plan.

1. Operations between the Confirmation Date and the Effective Date.

During the period from the Confirmation Date through and until the Effective Date, the Debtors shall continue to operate their businesses as Debtors in Possession, subject to the oversight of the Bankruptcy Court as provided in the Bankruptcy Code, the Bankruptcy Rules and all orders of the Bankruptcy Court that are then in full force and effect.

2. Reporting Requirements Under Exchange Act, Listing on Securities Exchange and Registration Rights.

Reorganized Holdings shall use its best efforts to be a mandatory reporting company under Section 11 of the Exchange Act, but it shall have no liability if it is unable to do so. In addition, Reorganized Holdings shall use its best efforts to list, as promptly as practicable after the Effective Date, the New Common Shares on a national securities exchange or for quotation on a national automated interdealer quotation system, but it shall have no liability if it is unable to do so. Persons receiving distributions of New Common Shares, by accepting such distributions, will be deemed to have agreed to cooperate with Reorganized Holdings’ reasonable requests to assist it in its efforts to list the New Common Shares on a national securities exchange or quotation system including, without limitation, by appointing or supporting the appointment of a sufficient number of directors to the board of directors of Reorganized Holdings who satisfy the independence and other requirements of any such national securities exchange or quotation system. On the Effective Date, Reorganized Holdings shall enter into the Registration Rights Agreement.

3. Reorganized Holdings Constituent Documents.

As of the Effective Date, the Reorganized Holdings Constituent Documents shall be authorized by the Plan without further act or action under applicable law, regulation, order or rule and the Debtors and Reorganized GSI Entities, as applicable, are authorized to file such Reorganized Holdings Constituent Documents with the applicable Secretary(s) of State or the Director under the New Brunswick Business Corporations Act, as applicable.

4. New Corporate Structure for Reorganized Holdings.

Except as otherwise set forth in the Plan, prior to or as of the Effective Date the Debtors may cause any or all of the Debtors to engage in any restructuring transactions deemed necessary or appropriate (including, without limitation, those merging, dissolving or transferring assets between or among the Debtors and/or the Non-Debtor Subsidiaries that are not Debtors in the Chapter 11 Cases) to implement the provisions of the Plan or to take any other actions consistent with the Plan and not prohibited by applicable law.

On the Effective Date, (i) Holdings shall transfer the GSI UK Shares to GSI Holdings, and (ii) GSI Holdings shall subsequently transfer the GSI UK Shares to GSI Holdings II.

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5. Cancellation of Holdings Equity Interests, GSI UK Note and Senior Notes.

On the Effective Date, except as otherwise provided for in the Plan, (i) the Holdings Equity Interests, the GSI UK Note and the Senior Notes and any other note, bond, indenture or other instrument or document evidencing or creating any indebtedness or obligation of the Debtors related to the Holdings Equity Interests, the GSI UK Note or the Senior Notes shall be canceled and terminated; and (ii) the obligations of the Debtors under any agreements, indentures or certificates of designation governing the Holdings Equity Interests, the GSI UK Note, the Senior Notes and any other note, bond, indenture or other instrument or document evidencing or creating any indebtedness or obligation of the Debtors related to the Holdings Equity Interests, the GSI UK Note and the Senior Notes shall be discharged; provided, however, that each indenture or other agreement that governs the rights of a Holder of Senior Note Claims and that is administered by an indenture trustee, an agent or a servicer shall continue in effect solely for the purposes of (a) allowing such indenture trustee, agent or servicer to make the distributions to be made on account of such Claims under the Plan as provided in Article III of the Plan, and (b) permitting such indenture trustee, agent or servicer to maintain any rights or liens it may have for fees, costs and expenses under such indenture or other agreement; provided, further, that the provisions of clause (ii) of this paragraph shall not affect the discharge of the Debtors’ liabilities under the Bankruptcy Code and the Confirmation Order or result in any expense or liability to the Reorganized GSI Entities; and provided further that such cancellation and discharge shall not impair the rights of any person to receive distributions under the Plan. Any actions taken by an indenture trustee, an agent or a servicer that are not for the purposes authorized in Section 6.5 of the Plan shall not be binding upon the Debtors.

6. Other General Corporate Matters.

On or after the Effective Date, the Reorganized GSI Entities will be authorized to take such action as is necessary under the laws of the Province of New Brunswick, Canada, the State of Michigan, the State of Delaware, federal law and other applicable law to effect the terms and provisions of the Plan. Without limiting the foregoing, the issuance of the New Common Shares, the approval of the Reorganized Holdings Constituent Documents, the election and the appointment of directors and officers, and any other matter involving the corporate structure of the Reorganized Holdings shall be deemed to have occurred and shall be in effect from and after the Effective Date pursuant to section 303 and other applicable provisions of the Delaware General Corporation Law, section 450.1861 of the Michigan General Corporation Act and section 132 of the New Brunswick Business Corporation Act without any requirement of further action by the stockholders or directors of the Debtors or the Reorganized GSI Entities. All obligations of the Debtors to indemnify and hold harmless their current and former directors, officers and employees, whether arising under the Debtors’ constituent documents, contract, law or equity, shall be assumed by, and assigned to, the Reorganized GSI Entities upon the occurrence of the Effective Date with the same effect as though such obligations constituted executory contracts that are assumed (or assumed and assigned, as applicable) under section 365 of the Bankruptcy Code, and all such obligations shall be fully enforceable in accordance with their terms from and after the Effective Date. Except as provided in Section 6.19 of the Plan, the prosecution of any so indemnified Cause of Action shall, upon the occurrence of the Effective Date, be enjoined and prohibited.

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7. Continued Corporate Existence of the Debtors.

Each of the Debtors shall continue to exist after the Effective Date as a separate entity, with all the powers available to such legal entity, in accordance with applicable law and pursuant to the Reorganized Holdings Constituent Documents, which shall become effective upon the occurrence of the Effective Date. On or after the Effective Date, the Debtors may, within their sole and exclusive discretion, take such action as permitted by applicable law and their constituent documents, as they determine may be reasonable and appropriate.

8. Re-Vesting of Assets.

Upon the occurrence of the Effective Date, except as otherwise expressly provided in the Plan, title to all of the Assets of the Debtors and their Estates shall vest in the Reorganized GSI Entities free and clear of all liens, Claims, Causes of Action, interests, security interests and other encumbrances and without further order of the Bankruptcy Court. On and after the occurrence of the Effective Date, the Reorganized GSI Entities may operate their businesses and may use, acquire and dispose of their Assets free of any restrictions of the Bankruptcy Code.

9. Management.

Except as set forth in Section 6.12 of the Plan, upon the occurrence of the Effective Date, the management and operation of each of the Reorganized GSI Entities shall be the general responsibility of each such entity’s then current board of directors and management. The Confirmation Order shall ratify and approve all actions taken by each of the Debtors from the Petition Date through the Effective Date.

10. Boards of Directors.

On the Effective Date, the board of directors of Reorganized Holdings shall be set at seven members (including the Chief Executive Officer of Reorganized Holdings and five members selected by the Noteholders). The identities of the members of the board of directors of Reorganized Holdings shall be disclosed prior to the conclusion of the Confirmation Hearing. Such directors shall serve in accordance with the applicable Reorganized Holdings Constituent Documents, as the same may be amended from time to time.

On the Effective Date, Reorganized Holdings, as sole stockholder of Reorganized GSI and as contemplated by the Bylaws of Reorganized GSI, shall continue to be authorized to take actions required to be taken by the board of directors of Reorganized GSI. On the Effective Date, the initial board of directors of Reorganized MES shall be comprised of the individuals who hold such positions as of the Effective Date. From and after the Effective Date, the members of the board of directors (or managers, as applicable) of the Reorganized GSI Entities shall be selected and determined in accordance with the provisions of the respective Reorganized Holdings Constituent Documents and applicable law.

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11. Officers.

Except as otherwise determined by the board of directors of the Reorganized GSI Entities, the then current officers of each of the Debtors shall serve in such positions after the Effective Date for each of the Reorganized GSI Entities in accordance with their respective employment agreements, if any, and applicable law. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of the Reorganized GSI Entities shall be selected and appointed by the respective boards of directors of such entities, in accordance with, and pursuant to, the provisions of applicable law and the respective Reorganized Holdings Constituent Documents.

12. Management Incentive Plan.

As soon as reasonably practicable after the Effective Date, the board of directors of Reorganized Holdings will establish and implement a new management incentive plan under which New Common Shares in an amount not to exceed 8% of the Post-Effective Date Fully Diluted Capital Stock of Reorganized Holdings will be reserved for management of Reorganized Holdings. Any such allocation under such new management incentive plan will be determined by the board of directors of Reorganized Holdings, which allocation may consist of, among other things, restricted stock and/or time and performance based options, and will take account of any other bonus and compensation plans. The members of management and the employees entitled to participate in the new management incentive plan, and the awards for each, will be determined by the board of directors of Reorganized Holdings in its sole and absolute discretion.

13. Causes of Action.

Except as otherwise provided in the Plan, all Causes of Action of any of the Debtors and their respective Estates, shall, upon the occurrence of the Effective Date, be transferred to, and be vested in, the Reorganized GSI Entities. Except as otherwise provided in the Plan, the Reorganized GSI Entities’ rights to commence, prosecute or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date. The Plan provides that the Debtors shall waive, and not preserve, any Avoidance Actions.

No Person may rely on the absence of a specific reference in the Plan or the Disclosure Statement to any Cause of Action against them as any indication that the Debtors will not pursue any and all available Causes of Action against them. Under the Plan, the Debtors and the Estates, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against any Person, except only for any Avoidance Action and except as otherwise expressly provided in the Plan or the Plan Documents. Unless any Causes of Action against a Person are expressly waived, relinquished, exculpated, released, compromised or settled in the Plan or a Final Order, the Debtors expressly reserve all such Causes of Action for later adjudication and, therefore, no preclusion doctrine, including without limitation, the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable or otherwise) or laches shall apply to such Causes of Action upon or after the confirmation or consummation of the Plan.

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14. Appointment of the Disbursing Agent.

Upon the occurrence of the Effective Date, Reorganized Holdings shall be appointed to serve as the Disbursing Agent, and shall have all powers, rights, duties and protections afforded the Disbursing Agent under the Plan. Reorganized Holdings may delegate or assign such appointment in its discretion.

15. Sources of Cash for Plan Distributions.

All Cash necessary for the Disbursing Agent to make Plan Distributions and any other payments shall be obtained from the Debtors’ existing Cash balances.

16. Releases by the Debtors.

As of the Effective Date, for good and valuable consideration, the Debtors and the Reorganized GSI Entities (in their individual capacities and as Debtors in Possession) shall be deemed to release and forever waive and discharge all claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Chapter 11 Cases, this Plan or the Disclosure Statement, and that could have been asserted by or on behalf of the Debtors or their Estates or the Reorganized GSI Entities against any of the Released Parties; provided, however, that nothing in Section 6.18 of the Plan shall be construed to release any party or entity from (x) willful misconduct or gross negligence as determined by a Final Order, or (y) any objections by the Debtors or the Reorganized GSI Entities to Claims or Equity Interests filed by such party or entity against any Debtor and/or its Estate.

17. Releases by Creditors and Equity Security Holders.

Subject to the occurrence of the Effective Date, for good and valuable consideration, the adequacy of which is thereby confirmed pursuant to the Plan, each holder of a Claim or Equity Interest that votes to accept the Plan, and/or does not opt out of the Releases on the applicable ballot, solely in its capacity as the holder of such Claim or Equity Interest, shall be presumed conclusively absolutely, unconditionally and irrevocably to have released and forever waived and discharged any Cause of Action and any and all claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities, whether direct or derivative, liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Chapter 11 Cases, the Plan, this Disclosure Statement, any Debtor, the Debtors’ restructuring or the purchase, sale or rescission of the purchase or sale of any

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security of any Debtor, the subject matter of, or the transactions or events giving rise to, any Claim or Equity Interest that is treated in the Plan, the business or contractual arrangements between any Debtor and any Released Party, the restructuring of Claims and Equity Interests prior to or in the Chapter 11 Cases or any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date of the Plan and including any claim that could have been asserted by or on behalf of the Debtors or their Estates or the Reorganized GSI Entities, in each case, against any of the Released Parties; provided, however, that nothing in Section 6.19 of the Plan shall be construed to release any party from willful misconduct or gross negligence as determined by a Final Order.

The Debtors’ current and former directors and officers (specifically, directors and officers of Holdings), including Sergio Edelstein and Robert Bowen, who are defendants in the Securities Class Action, have customary rights of indemnification against the Debtors for claims arising out of their service as directors and officers and related defense expense. Those rights are set forth in both the by-laws of Holdings and separate contractual indemnification agreements entered into with certain directors and officers in 2009. Accordingly, the Debtors believe that it is in their best interest to ensure that any such claims are released to the fullest extent permitted by law in order to minimize the Debtors’ obligations to satisfy indemnity claims, regardless of whether those indemnification claims would be paid in the form of cash or stock.

18. Fixing of Principal Balance of GSI UK Note.

For administrative ease (given that the GSI UK Note is denominated in British pounds and the exchange rate between United States Dollars and British Pounds fluctuates daily, it shall be assumed that the outstanding principal balance of the GSI UK Note is fixed at $20,000,000 for purposes of Plan Distributions, and the difference (in United States Dollars) between $20,000,000 and the value as of the Petition Date (in United States Dollars) of GBP 12,500,000 shall be added or subtracted, as the case may be, to the intercompany account maintained between GSI UK and GSI.

C. Securities to Be Issued Under the Plan.

Pursuant to the Plan, on the Effective Date, all Equity Interests in Holdings will be cancelled and extinguished.

Pursuant to the Plan, the Reorganized GSI Entities are authorized, without further act or action under applicable law, regulation, order, or rule to issue the following securities pursuant to the Plan (the “Plan Securities”): (i) the New Common Shares in Holdings; (ii) the New Senior Secured Notes (described below); and (iii) the New Warrants (as described below). The documents evidencing the Plan Securities will be included in the Plan Supplement.

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1. Authorized Plan Securities.

Pursuant to the Plan and the Reorganized Holdings Constituent Documents, and without further corporate or other action, the following Plan Securities are authorized: (i) an unlimited number of shares of New Common Shares in Reorganized Holdings, (ii) New Senior Secured Notes of Reorganized GSI, and (iii) New Warrants of Reorganized Holdings. The issuance by Reorganized Holdings and Reorganized GSI of the New Common Shares, the New Senior Secured Notes and the New Warrants, as applicable, as provided under the Plan is authorized without the need for any further or other corporate action. Such Plan Securities shall be distributed as described in Article III of the Plan. None of the Plan Securities shall be registered under applicable securities laws and neither the Debtors nor Reorganized Holdings now Reorganized GSI shall have any obligation to register the Plan Securities.

2. New Common Shares.

Reorganized Holdings shall, in exchange for the issuance by Reorganized GSI to Reorganized Holdings of 4,000,000 newly issued shares of common stock of Reorganized GSI, issue from Reorganized Holdings’ treasury to the Senior Noteholders and GSI UK their Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 5 Note Claims.

As of the Effective Date, the New Common Shares authorized for issuance under the Plan shall be issued and distributed pursuant to the Plan to holders of Allowed Note Claims and Allowed Holdings Equity Interests, and such issuance by Reorganized Holdings of the New Common Shares shall be authorized by the Plan without further act or action under applicable law, regulation, order or rule.

The Confirmation Order shall provide that the issuance of the New Common Shares shall be exempt from the registration requirements of the Securities Act in accordance with section 1145 of the Bankruptcy Code and such issuance shall be exempt from the prospectus and registration requirements under applicable Canadian securities laws.

3. New Senior Secured Notes.

As of the Effective Date, the issuance by Reorganized GSI of the New Senior Secured Notes to holders of Allowed Note Claims shall be authorized by the Plan without further act or action under applicable law, regulation, order or rule.

As of the Effective Date, the guarantee by Reorganized Holdings and Reorganized MES of the New Senior Secured Notes shall be authorized without further act or action under applicable law, regulation, order or rule.

The Confirmation Order shall provide that the issuance of the New Senior Secured Notes shall be exempt from the registration requirements of the Securities Act in accordance with section 1145 of the Bankruptcy Code and such issuance shall be exempt from the prospectus and registration requirements under applicable Canadian securities laws.

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On the Effective Date, Reorganized Holdings, Reorganized GSI and Reorganized MES shall enter into, and shall cause their respective Subsidiaries party to the New Indenture to enter into, the New Indenture providing for the issuance of the New Senior Secured Notes and guarantees of such notes. Reorganized GSI shall qualify the New Indenture in accordance with the Trust Indenture Act of 1939.

On or before the Effective Date, (i) Reorganized Holdings shall execute and shall cause its Subsidiaries party to the Security Documents to execute the Security Documents and (ii) if the Security Document is not a document that is to be executed, then Reorganized Holdings shall deliver or cause its Subsidiaries to deliver the Security Documents.

4. The New Warrants.

As of the Effective Date, the issuance by Reorganized Holdings of the New Warrants to holders of Allowed Holdings Equity Interests shall be authorized by the Plan without further act or action under applicable law, regulation, order or rule.

The Confirmation Order shall provide that the issuance of the New Warrants and the New Common Shares issuable upon exercise of the New Warrants shall be exempt from the registration requirements of the Securities Act in accordance with section 1145 of the Bankruptcy Code and such issuance shall be exempt from the prospectus and registration requirements under applicable Canadian securities laws.

D. Securities Law Matters in Implementing the Plan.

1. Plan Securities Issued Pursuant to Section 1145 of the Bankruptcy Code.

Pursuant to the Plan, each holder of an Allowed Note Claim shall receive, among other things, a Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 5 Note Claims, which total amount shall be equal to 81.4% of the Outstanding Capital Stock of Reorganized Holdings, and a Pro Rata Share of the New Senior Secured Notes. Also pursuant to the Plan, each holder of an Allowed Holdings Equity Interest shall receive a Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 6A Holdings Equity Interest, which total amount shall be 18.6% of the Outstanding Capital Stock of Reorganized Holdings, a Pro Rata Share of New $1.10 Warrants and a Pro Rata Share of New $2.00 Warrants. The New Common Shares, New Senior Secured Notes and the New Warrants described herein are collectively referred to as the “Allowed New Securities”.

The Debtors are relying on section 1145 of the Bankruptcy Code and applicable Canadian securities laws to exempt the issuance of the Allowed New Securities from the registration requirements of the Securities Act, any state securities or “blue sky” laws and the prospectus and registration requirements under Canadian securities laws. Section 1145 generally exempts from registration the offer and sale of securities of a debtor under a chapter 11 plan (including, with respect to rights to subscribe for securities in a debtor that are issued under a chapter 11 plan, securities sold upon exercise of such rights) if such securities are offered and sold in exchange for a claim or interest in the debtor or principally in exchange for a claim or interest in the debtor and partly for cash.

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Because the issuance of Allowed New Securities under the Plan will be exempt from registration pursuant to 1145 of the Bankruptcy Code, recipients should generally be able to resell their shares of the Allowed New Securities without registration under the Securities Act or other federal securities laws, unless the recipient is an “underwriter” with respect to such Allowed New Securities Stock (as such term is defined in section 1145(b) of the Bankruptcy Code). In addition, Allowed New Securities generally may be resold without registration under state securities law pursuant to various exemptions provided by the respective laws of the several states. The resale of the Allowed New Securities will be exempt from the prospectus and registration requirements under applicable Canadian securities laws. However, recipients of Allowed New Securities are advised to consult with their own legal advisors as to the availability of any such exemption in any given instance and as to any applicable requirements or conditions to such availability.

Subject to certain limited exceptions, section 1145(b) of the Bankruptcy Code defines “underwriter” for purposes of the Securities Act as one who

(i) purchases a claim against, interest in, or a claim for an administrative expense in the case concerning, the debtor, if such purchase is with a view to distribution of any security received or to be received in exchange for such a claim or interest, or

(ii) offers to sell securities offered or sold under a plan for the holders of such securities, or

(iii) offers to buy securities offered or sold under a plan from holders of such securities, if such offer to buy is (a) with a view to distribution of such securities and (b) under an agreement made in connection with the plan, with the consummation of the plan, or with the offer or sale of securities under the plan, or

(iv) is a control person of the issuer of the securities.

Whether any particular Person would be deemed to be an “underwriter” with respect to the Allowed New Security issued under the Plan would depend upon the facts and circumstances applicable to that Person. Accordingly, the Debtors express no view as to whether any particular Person receiving Allowed New Securities under the Plan would be an “underwriter” within the meaning of section 1145 of the Bankruptcy Code.

Notwithstanding the foregoing, Persons who may be deemed “underwriters” under section 1145(b) of the Bankruptcy Code with respect to the Allowed New Securities may be able to resell such Allowed New Securities without registration pursuant to the provisions of Rule 144 promulgated under the Securities Act or other applicable exemption from registration. Parties who believe they may be “underwriters” under section 1145(b) of the Bankruptcy Code with respect to the Allowed New Securities are advised to consult with their own legal advisors as to the availability of the exemption provided by Rule 144 or any other applicable exemption from registration.

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Reorganized Holdings shall enter into a Registration Rights Agreement with GSI UK providing for two demand registrations for GSI UK with respect to the New Common Shares issued to GSI UK under the Plan. Reorganized Holdings shall also provide certain piggyback registration rights, as set forth in the Registration Rights Agreement, to the Consenting Noteholders with respect to the New Common Shares following the Effective Date pursuant to the Plan Support Agreement. The Plan Support Agreement also contemplates that Reorganized Holdings enter into another Registration Rights Agreement UK with respect to the New Common Shares issued to the Noteholders under the Plan.

2. SEC Reporting Requirements.

Reorganized Holdings shall use its best efforts to be a mandatory reporting company under Section 11 of the Exchange Act, but it shall have no liability if it is unable to do so. Under the New Indenture, it is contemplated that Holdings shall file with the SEC, within six months of the Effective Date of the Plan, (i) a Form 10-K for the fiscal year ended December 31, 2008, and (ii) any other periodic filings required by the Exchange Act or the SEC in order for Holdings to become current with its reporting obligations under the Exchange Act. If the Company does not meet such reporting obligations under the New Indenture, it will be required to pay the applicable interest rate on the New Senior Secured Notes plus an additional two percent per annum.

Reorganized Holdings shall use its best efforts to list, as promptly as practicable after the Effective Date, the New Common Shares on a national securities exchange or for quotation on a national automated interdealer quotation system, but it shall have no liability if it is unable to do so. Persons receiving distributions of New Common Shares, by accepting such distributions, will be deemed to have agreed to cooperate with Reorganized Holdings’ reasonable requests to assist it in its efforts to list the New Common Shares on a national securities exchange or quotation system including, without limitation, by appointing or supporting the appointment of a sufficient number of directors to the board of directors of Reorganized Holdings who satisfy the independence and other requirements of any such national securities exchange or quotation system.

E. Plan Distribution Provisions.

1. Plan Distributions.

The Disbursing Agent shall make all Plan Distributions. In the event a Plan Distribution is payable on a day other than a Business Day, such Plan Distribution shall instead be paid on the immediately succeeding Business Day, but shall be deemed to have been made on the date otherwise due. For federal income tax purposes, except to the extent a Plan Distribution is made in connection with reinstatement of an obligation pursuant to section 1124 of the Bankruptcy Code, a Plan Distribution will be allocated first to the principal amount of a Claim and then, to the extent the Plan Distribution exceeds the principal amount of the Claim, to the portion of the Claim representing accrued but unpaid interest.

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2. Timing of Plan Distributions.

Each Plan Distribution shall be made on the relevant Plan Distribution Date therefor and shall be deemed to have been timely made if made on such date or within ten (10) days thereafter.

3. Address for Delivery of Plan Distributions/Unclaimed Plan Distributions.

Subject to Bankruptcy Rule 9010, any Plan Distribution or delivery to a holder of an Allowed Claim shall be made at the address of such holder as set forth (a) in the Schedules, (b) on the proof of Claim filed by such holder, (c) in any notice of assignment filed with the Bankruptcy Court with respect to such Claim pursuant to Bankruptcy Rule 3001(e), and (d) in any notice served by such holder giving details of a change of address. If any Plan Distribution is returned to the Disbursing Agent as undeliverable, no Plan Distributions shall be made to such holder unless the Disbursing Agent is notified of such holder’s then current address within ninety (90) days after such Plan Distribution was returned. After such date, if such notice was not provided, a holder shall have forfeited its right to such Plan Distribution, and the undeliverable Plan Distributions shall be returned to the Reorganized GSI Entities.

4. De Minimis Plan Distributions.

No Plan Distribution of less than ten dollars ($10.00) need be made by the Disbursing Agent to the holder of any Claim unless a request therefor is made in writing to the Disbursing Agent. If no request is made as provided in the preceding sentence within ninety (90) days of the Effective Date, all such Plan Distributions shall revert to the Reorganized GSI Entities.

5. Time Bar to Cash Payments.

Checks issued in respect of Allowed Claims shall be null and void if not negotiated within one hundred and eighty (180) days after the date of issuance thereof. Requests for reissuance of any voided check shall be made directly to the Disbursing Agent by the holder of the Allowed Claim to whom such check was originally issued. Any claim in respect of such a voided check shall be made within one hundred and eighty (180) days after the date of issuance of such check. If no request is made as provided in the preceding sentence, any claims in respect of such voided check shall be discharged and forever barred and such unclaimed Plan Distribution shall revert to the Reorganized GSI Entities.

6. Manner of Payment under the Plan.

Unless the Person receiving a Plan Distribution agrees otherwise, any Plan Distribution to be made in Cash under the Plan shall be made, at the election of the Disbursing Agent, by check drawn on a domestic bank or by wire transfer from a domestic bank. Cash payments to foreign creditors may, in addition to the foregoing, be made, at the option of the Disbursing Agent in such funds and by such means as are necessary or customary in a particular foreign jurisdiction.

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7. Expenses Incurred on or after the Effective Date and Claims of the Disbursing Agent.

Except as otherwise ordered by the Bankruptcy Court or as provided herein, the amount of any reasonable fees and expenses incurred (or to be incurred) by the Disbursing Agent on or after the Effective Date (including, but not limited to, taxes) shall be paid when due. Professional fees and expenses incurred by the Disbursing Agent from and after the Effective Date in connection with the effectuation of the Plan shall be paid in the ordinary course of business. Any dispute regarding compensation shall be resolved by agreement of the parties, or if the parties are unable to agree, as determined by the Bankruptcy Court.

8. Fractional Plan Distributions.

When any distribution on account of an Allowed Claim or Allowed Equity Interest pursuant to the Plan would otherwise result in the issuance of a number of New Common Shares (including New Common Shares issuable upon the exercise of New Warrants) that is not a whole number, the actual distribution of New Common Shares shall be rounded as follows: (i) fractions of  ¹/2 or greater shall be rounded to the next higher whole number, and (ii) fractions of less than  ¹/2 shall be rounded to the next lower whole number, provided, however, that the Disbursing Agent, or the Indenture Trustee, as the case may be, shall have the authority to further adjust, after taking into account the rounding provided in Section 7.8 of the Plan, the number of New Common Shares to be distributed (including New Common Shares issuable upon the exercise of New Warrants) to each holder of Claims or Equity Interest, as applicable, in Classes 5 and 6A (by increasing or decreasing by 1 the number of such shares) as necessary in order for the holders of Claims or Equity Interest, as applicable, in Classes 5 and 6A, as appropriate, to receive New Common Shares in the amounts specified in Article III of the Plan.

The New Senior Secured Notes shall be issued in a minimum face amount (the “Face Amount Minimum”) and integral multiples (“Integral Multiples”) as provided in the New Indenture. When any distribution on account of an Allowed Claim pursuant to the Plan would otherwise result in the issuance of a New Senior Secured Note (A) in an amount less than the Face Amount Minimum, the face amount of each New Senior Secured Note shall be rounded as follows: (i) amounts that are greater than or equal to 50% of the Face Amount Minimum shall be rounded up to the Face Amount Minimum; and (ii) amounts that are less than 50% of the Face Amount Minimum shall be rounded down and no New Senior Secured Notes shall be issued for such Allowed Clam; and (B) in an amount in excess of the Face Amount Minimum but less than an Integral Multiple, the face amount of each New Senior Secured Note shall be rounded as follows for the portion in excess of the Integral Multiple: (i) amounts that are greater than or equal to 50% of the Integral Multiple shall be rounded to the next higher Integral Multiple; and (ii) amounts that are less than 50% of the Integral Multiple shall be rounded to the next lower Integral Multiple; provided, however, that the Disbursing Agent, or the Indenture Trustee, as the case may be, shall have the authority to further adjust, after taking into account the rounding provided in Section 7.8 of the Plan, the Pro Rata portion of New Senior Secured Notes to be distributed to each holder of Claims in Class 5 (by increasing or decreasing by the Face Amount Minimum the amount of such New Senior Secured Notes) as necessary in order for the holders of Claims in Class 5 as appropriate, to receive New Senior Secured Notes in the amounts specified in Article III of the Plan.

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9. Special Plan Distribution Provisions for Equity Interests.

For the purpose of making Plan Distributions, the transfer ledger in respect of the Equity Interests and Senior Notes shall be closed as of the close of business on the date set forth in the Disclosure Statement Order (or, if not set forth there, on the Confirmation Date), and the Disbursing Agent and its agent shall be entitled to recognize and deal for all purposes herein with only those holders of record stated on the transfer ledger maintained by the stock transfer agent for the Equity Interests and Senior Notes as of the close of business on the Effective Date. On the Confirmation Date, all Equity Interests in Holdings and Senior Notes shall be cancelled and annulled, and all rights thereunder shall be settled and compromised in full in exchange for the Plan Distributions to be made to the holders of such Equity Interests and Senior Note Claims as applicable.

10. Surrender and Cancellation of Instruments.

As a condition to receiving any Plan Distribution, on or before the Plan Distribution Date, the holder of an Allowed Claim or Allowed Equity Interest evidenced by a certificate, instrument or note, other than any such certificate, instrument or note that is being reinstated or being left unimpaired under the Plan, shall (i) surrender such certificate, instrument or note representing such Claim or Equity Interest, including, without limitation, any guaranties except to the extent assumed by the Debtors, and (ii) execute and deliver such other documents as may be necessary to effectuate the Plan. Such certificate, instrument or note, including any such guaranties, shall thereafter be cancelled and extinguished. The Disbursing Agent shall have the right to withhold any Plan Distribution to be made to or on behalf of any holder of such Claims or Equity Interests unless and until (1) such certificates, instruments or notes, including any such guaranties, are surrendered, or (2) any relevant holder provides to the Disbursing Agent an affidavit of loss or such other documents as may be required by the Disbursing Agent together with an appropriate indemnity in the customary form. Any such holder who fails to surrender such certificates, instruments or notes, including any such guaranties, or otherwise fails to deliver an affidavit of loss and indemnity prior to the second anniversary of the Effective Date, shall be deemed to have forfeited its Claims or Equity Interests, as applicable, and shall not participate in any Plan Distribution. All property in respect of such forfeited Claims or Equity Interests, as applicable, shall revert to the Reorganized GSI Entities. In the event such certificate, instrument or note is held in the name of, or by a nominee of, the Depository Trust Company and/or the Indenture Trustee, the Debtors shall seek the cooperation of the Depository Trust Company and/or the Indenture Trustee in facilitating distributions.

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F. Procedures For Resolving And Treating Contested Claims.

1. Objection Deadline.

As soon as practicable, but in no event later than sixty (60) days after the Effective Date (subject to being extended by the order of the Bankruptcy Court upon motion of the Disbursing Agent without notice or a hearing), objections to Claims shall be filed with the Bankruptcy Court and served upon the holders of each of the Claims to which objections are made.

2. Prosecution of Contested Claims.

The Disbursing Agent may object to the allowance of any scheduled or filed Claims as to which liability is disputed in whole or in part. All objections that are filed and prosecuted as provided herein shall be litigated to Final Order or compromised and settled in accordance with Section 8.3 of the Plan.

3. Claims Settlement.

Notwithstanding any requirements that may be imposed pursuant to Bankruptcy Rule 9019, from and after the Effective Date, the Disbursing Agent shall have authority to settle or compromise all Claims and Causes of Action without further review or approval of the Bankruptcy Court.

4. Entitlement to Plan Distributions Upon Allowance.

Notwithstanding any other provision of the Plan, and except as set forth at Section 4.2 of the Plan as to Administrative Claims, no Plan Distribution shall be made with respect to any Claim to the extent it is a Contested Claim, unless and until such Contested Claim becomes an Allowed Claim, subject to the setoff rights as provided in Section 13.19 of the Plan. When a Claim that is not an Allowed Claim as of the Effective Date becomes an Allowed Claim, the holder of such Allowed Claim shall thereupon become entitled to receive the Plan Distributions in respect of such Claim, the same as though such Claim had been an Allowed Claim on the Effective Date, and without interest or other compensation for the time elapsed after the Effective Date.

5. Estimation of Claims.

The Disbursing Agent may, at any time, request that the Bankruptcy Court estimate any Claim pursuant to section 502(c) of the Bankruptcy Code regardless of whether the Disbursing Agent has previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court will retain jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including during the pendency of any appeal relating to any such objection. In the event that the Bankruptcy Court estimates any

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Contested Claim, that estimated amount will constitute the Allowed amount of such Claim for all purposes under the Plan. All of the objection, estimation, settlement and resolution procedures set forth in the Plan are cumulative and not necessarily exclusive of one another. Claims may be estimated and subsequently compromised, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court.

G. Conditions Precedent to Confirmation of the Plan and the Occurrence of the Effective Date.

1. Conditions Precedent to Confirmation.

The following are conditions precedent to confirmation of the Plan:

(a) The Clerk of the Bankruptcy Court shall have entered an order or orders (i) approving the Disclosure Statement as containing “adequate information” pursuant to section 1125 of the Bankruptcy Code, (ii) authorizing the solicitation of votes with respect to the Plan, (iii) determining that all votes are binding and have been properly tabulated as acceptances or rejections of the Plan, (iv) confirming and giving effect to the terms and provisions of the Plan, (v) determining that all applicable tests, standards and burdens in connection with the Plan have been duly satisfied and met by the Debtors and the Plan, (vi) approving the Plan Documents, and (vii) authorizing the Debtors to execute, enter into, and deliver the Plan Documents and to execute, implement, and to take all actions otherwise necessary or appropriate to give effect to, the transactions and transfer of Assets contemplated by the Plan and the Plan Documents;

(b) The Confirmation Order, the Plan Documents and the Plan are each in a form satisfactory to the Debtors; and

(c) The Confirmation Order shall include determinations that all of the settlements and compromises contained in the Plan meet the applicable standards under section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019 for approval and implementation.

2. Conditions Precedent to the Occurrence of the Effective Date.

The following are conditions precedent to the occurrence of the Effective Date:

(a) The Confirmation Order shall have been entered by the Clerk of the Bankruptcy Court and shall have become a Final Order;

(b) All necessary consents, authorizations and approvals shall have been given for the transfers of property and the payments provided for or contemplated by the Plan, including, without limitation, satisfaction or waiver of all conditions to the obligations of the Debtors under the Plan and the Plan Documents;

(c) The New Indenture shall have become effective and all conditions to the effectiveness thereof shall have been satisfied or waived;

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(d) The Confirmation Order shall have been confirmed and recognized by the Court of Queen’s Bench of New Brunswick;

(e) The Security Documents (i) shall be executed and have become effective and all conditions to the effectiveness thereof shall have been satisfied or waived or (ii) if not a document that is to be executed, then delivered;

(f) The Reorganized Holdings Constituent Documents shall have been filed with the applicable authority of their respective jurisdiction of incorporation and/or formation in accordance with such jurisdictions applicable laws;

(g) The unpaid filed and scheduled (excluding Disallowed Claims) Priority Claims (Class 1), Secured Claims (Class 2) and General Unsecured Claims (Class 3) shall not exceed in the aggregate $22,500,000; and

(h) The Effective Date shall have occurred by April 20, 2010 unless such date is extended pursuant to the Plan Support Agreement.

3. Waiver of Conditions.

The conditions set forth in Section 9.1 or Section 9.2 of the Plan may be waived only as set forth in the Plan Support Agreement.

4. Effect of Non-Occurrence of the Effective Date.

If the Effective Date shall not occur, the Plan shall be null and void and nothing contained in the Plan shall: (a) constitute a waiver or release of any Claims against or Equity Interests in a Debtor; (b) prejudice in any manner the rights of the Debtors, including, without limitation, any right to seek a further extension of the exclusivity periods under section 1121(d) of the Bankruptcy Code; or (c) constitute an admission, acknowledgement, offer or undertaking by the Debtors.

H. The Disbursing Agent.

1. Powers and Duties.

Pursuant to the terms and provisions of the Plan, the Disbursing Agent shall be empowered and directed to (a) take all steps and execute all instruments and documents necessary to make Plan Distributions to holders of Allowed Claims and Equity Interests; (b) comply with the Plan and the obligations thereunder; (c) employ, retain or replace professionals to represent it with respect to its responsibilities; (d) object to Claims as specified in Article VIII of the Plan, and prosecute such objections; (e) compromise and settle any issue or dispute regarding the amount, validity, priority, treatment or Allowance of any Claim as provided in Article VIII of the Plan; (f) make annual and other periodic reports regarding the status of

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distributions under the Plan to the holders of Allowed Claims that are outstanding at such time; such reports to be made available upon request to the holder of any Contested Claim; and (g) exercise such other powers as may be vested in the Disbursing Agent pursuant to the Plan, the Plan Documents or order of the Bankruptcy Court.

2. Plan Distributions.

Pursuant to the terms and provisions of the Plan, the Disbursing Agent shall make the required Plan Distributions specified under the Plan on the relevant Plan Distribution Date therefor.

3. Exculpation.

Except as otherwise provided in Section 10.3 of the Plan, the Disbursing Agent, together with its officers, managers, directors, employees, agents , and representatives, are exculpated pursuant to the Plan by all Persons, holders of Claims and Equity Interests, and all other parties in interest, from any and all Causes of Action arising out of the discharge of the powers and duties conferred upon the Disbursing Agent (and each of its respective paying agents), by the Plan, any Final Order of the Bankruptcy Court entered pursuant to or in the furtherance of the Plan, or applicable law, except solely for actions or omissions arising out of the Disbursing Agent’s willful misconduct or gross negligence. No holder of a Claim or an Equity Interest, or representative thereof, shall have or pursue any Cause of Action (a) against the Disbursing Agent or its respective officers, managers, directors, employees, agents and representatives for making Plan Distributions in accordance with the Plan, or (b) against any holder of a Claim or an Equity Interest for receiving or retaining Plan Distributions as provided for by the Plan. Nothing contained in this Section shall preclude or impair any holder of an Allowed Claim or Allowed Equity Interest from bringing an action in the Bankruptcy Court against any Debtor to compel the making of Plan Distributions contemplated by the Plan on account of such Claim or Equity Interest.

I. Treatment Of Executory Contracts And Unexpired Leases.

1. Assumption and Rejection of Executory Contracts and Unexpired Leases.

On the Effective Date, all executory contracts, including the insurance policies discussed in Article IV.D.2. hereof, and unexpired leases of the Debtors shall be assumed pursuant to the provisions of section 365 of the Bankruptcy Code, except: (i) any executory contracts and unexpired leases that are the subject of separate motions to reject filed pursuant to section 365 of the Bankruptcy Code by the Debtors before the Effective Date; (ii) any contracts and leases listed in any Schedule 2 of this Disclosure Statement and any subsequently filed “Schedule of Rejected Executory Contracts and Unexpired Leases” to be filed by the Debtors with the Bankruptcy Court before the entry of, or as an exhibit to, the Confirmation Order; (iii) all executory contracts and unexpired leases rejected under this Plan or by order of the Bankruptcy Court entered before the Effective Date; (iv) any executory contract or unexpired lease that is the

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subject of a dispute over the amount or manner of cure pursuant to the next section hereof and for which the Debtors make a motion to reject such contract or lease based upon the existence of such dispute filed at any time; and (v) any agreement, obligation, security interest, transaction or similar undertaking that the Debtors believe is not executory or a lease that is later determined by the Bankruptcy Court to be an executory contract or unexpired lease that is subject to assumption or rejection under section 365 of the Bankruptcy Code.

Inclusion of a contract, lease or other agreement on any Schedule 2 of this Disclosure Statement shall constitute adequate and sufficient notice that (i) any Claims arising thereunder or related thereto shall be treated as General Unsecured Claims under the Plan, and (ii) the Debtors are no longer bound by, or otherwise obligated to perform, any such obligations, transactions, or undertakings relating thereto or arising thereunder. The inclusion of a contract, lease or other agreement in Section 11.1(a) of the Plan or on Schedule 3 of this Disclosure Statement or the “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases” shall not constitute an admission by the Debtors as to the characterization of whether any such included contract, lease, or other agreement is, or is not, an executory contract or unexpired lease or whether any claimants under any such contract, lease or other agreement are time-barred from asserting Claims against the Debtors. The Debtors reserve all rights with respect to the characterization of any such agreements.

The Plan shall constitute a motion to reject such executory contracts and unexpired leases set forth in any Schedule 2 of this Disclosure Statement and any subsequently filed “Schedule of Rejected Executory Contracts and Unexpired Leases” to be filed by the Debtors with the Bankruptcy Court before the entry of, or as an exhibit to, the Confirmation Order, and the Debtors shall have no liability thereunder except as is specifically provided in the Plan. Entry of the Confirmation Order by the Clerk of the Bankruptcy Court shall constitute approval of such rejections pursuant to section 365(a) of the Bankruptcy Code and a finding by the Bankruptcy Court that each such rejected agreement, executory contract or unexpired lease is burdensome and that the rejection thereof is in the best interests of the Debtors and their Estates.

The Plan shall constitute a motion to assume or assume and assign such executory contracts and unexpired leases assumed or assumed and assigned pursuant to Section 11.1(a) of the Plan and the Debtors shall have no liability thereunder for any breach of any assumed and assigned executory contract or lease occurring after such assignment pursuant to section 365(k) of the Bankruptcy Code, except as is specifically provided in the Plan. Entry of the Confirmation Order by the Clerk of the Bankruptcy Court shall constitute approval of such assumption or assumption and assignment pursuant to sections 365(a), (b) and (f) of the Bankruptcy Code, and a finding by the Bankruptcy Court that the requirements of section 365(f) of the Bankruptcy Code have been satisfied. Any non-Debtor counterparty to an agreement listed on Schedule 3 or the “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases,” or otherwise designated as being assumed in Section 11.1(a) of the Plan, who disputes the assumption and/or assignment of an executory contract or unexpired lease must file with the Bankruptcy Court, and serve upon the Debtors and any Committee, a written objection to the assumption and/or assignment, which objection shall set forth the basis for the dispute by no later than ten (10) Business Days prior to the Confirmation Hearing. The failure to timely object shall be deemed a waiver of any and all objections to the assumption or assumption and assignment of executory contracts and leases as set forth in Schedule 3 of this Disclosure Statement or the “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases” or as otherwise designated as being assumed in Section 11.1(a) of the Plan.

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2. Cure.

At the election of the Debtors, any monetary defaults under each executory contract and unexpired lease to be assumed under this Plan shall be satisfied pursuant to section 365(b)(1) of the Bankruptcy Code: (a) by payment of the default amount in Cash on the Effective Date or as soon thereafter as practicable; or (b) on such other terms as agreed to by the parties to such executory contract or unexpired lease. In the event of a dispute regarding: (i) the amount of any cure payments; (ii) the ability to provide adequate assurance of future performance under the contract or lease to be assumed or assigned; or (iii) any other matter pertaining to assumption or assignment, the cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order resolving the dispute and approving assumption or assignment, as applicable. Schedule 3 of this Disclosure Statement and any subsequently filed “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases” sets forth the Debtors’ cure obligations for each agreement which a cure obligation must be satisfied as a condition to the assumption or assumption and assignment of such agreement. Any non-Debtor counterparty to an agreement listed on Schedule 3 of this Disclosure Statement and any subsequently filed “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases” who disputes the scheduled cure obligation must file with the Bankruptcy Court, and serve upon the Debtors and any Committee, a written objection to the cure obligation, which objection shall set forth the basis for the dispute, the alleged correct cure obligation, and any other objection related to the assumption or assumption and assignment of the relevant agreement by no later than ten (10) Business Days prior to the Confirmation Hearing. If a non-Debtor counterparty fails to file and serve an objection which complies with the foregoing, the cure obligation set forth on Schedule 3 of this Disclosure Statement and any subsequently filed “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases” shall be binding on the non-Debtor counterparty, and the non-Debtor counterparty shall be deemed to have waived any and all objections to the assumption or assumption and assignment of the relevant agreement as proposed by the Debtors.

3. Claims Arising from Rejection, Expiration or Termination.

Claims created by the rejection of executory contracts and unexpired leases or the expiration or termination of any executory contract or unexpired lease prior to the Confirmation Date must be filed with the Bankruptcy Court and served on the Debtors (a) in the case of an executory contract or unexpired lease rejected by the Debtors prior to the Confirmation Date, in accordance with the Bar Date Notice, or (b) in the case of an executory contract or unexpired lease that (i) was terminated or expired by its terms prior to the Confirmation Date, or (ii) is rejected pursuant to Section 11.1 of the Plan, no later than thirty (30) days after the Confirmation Date. Any such Claims for which a proof of claim is not filed and served by the deadlines set forth in the Bar Date Notice or Section 11.3 of the Plan, as applicable, will be forever barred from assertion and shall not be enforceable against the Debtors, the Reorganized GSI Entities, their respective Estates, Affiliates, or Assets. Unless otherwise ordered by the Bankruptcy Court, all such Claims that are timely filed as provided herein shall be treated as General Unsecured Claims under the Plan subject to objection by the Disbursing Agent.

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J. Retention of Jurisdiction.

Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, the Bankruptcy Court shall retain and shall have exclusive jurisdiction over any matter (a) arising under the Bankruptcy Code, (b) arising in or related to the Chapter 11 Case or the Plan, or (c) that relates to the following:

a. To hear and determine any and all motions or applications pending on the Confirmation Date or thereafter brought in accordance with Article XI of the Plan for the assumption, assumption and assignment or rejection of executory contracts or unexpired leases to which any of the Debtors is a party or with respect to which any of the Debtors may be liable, and to hear and determine any and all Claims and any related disputes (including, without limitation, the exercise or enforcement of setoff or recoupment rights, or rights against any third party or the property of any third party resulting therefrom or from the expiration, termination or liquidation of any executory contract or unexpired lease);

b. To determine any and all adversary proceedings, applications, motions, and contested or litigated matters that may be pending on the Effective Date or that, pursuant to the Plan, may be instituted by the Disbursing Agent or the Debtors, as applicable, after the Effective Date;

c. To hear and determine any objections to the allowance of Claims, whether filed, asserted, or made before or after the Effective Date, including, without express or implied limitation, to hear and determine any objections to the classification of any Claim and to allow, disallow or estimate any Contested Claim in whole or in part;

d. To issue such orders in aid of execution of the Plan to the extent authorized or contemplated by section 1142 of the Bankruptcy Code;

e. To consider any modifications of the Plan, remedy any defect or omission, or reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order;

f. To hear and determine all Fee Applications and applications for allowances of compensation and reimbursement of any other fees and expenses authorized to be paid or reimbursed under the Plan or the Bankruptcy Code;

g. To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with the Plan, the Plan Documents or their interpretation, implementation, enforcement, or consummation;

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h. To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with the Confirmation Order (and all exhibits to the Plan) or its interpretation, implementation, enforcement, or consummation;

i. To the extent that Bankruptcy Court approval is required, to consider and act on the compromise and settlement of any Claim or Cause of Action by, on behalf of, or against any Estate;

j. To determine such other matters that may be set forth in the Plan, or the Confirmation Order, or that may arise in connection with the Plan, or the Confirmation Order;

k. To hear and determine matters concerning state, local, and federal taxes, fines, penalties, or additions to taxes for which the Reorganized GSI Entities, the Debtors, the Debtors in Possession, or the Disbursing Agent may be liable, directly or indirectly, in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

l. To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with any setoff and/or recoupment rights of the Debtors or any Person under the Plan;

m. To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with Causes of Action of the Debtors (but excluding Avoidance Actions) commenced by the Disbursing Agent, the Debtors or any third parties, as applicable, before or after the Effective Date;

n. To enter an order or final decree closing the Chapter 11 Case;

o. To issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any Person with consummation, implementation or enforcement of the Plan or the Confirmation Order;

p. To enter any and all appropriate orders necessary to effectuate and otherwise enforce the Implementation Order; and

q. To hear and determine any other matters related hereto and not inconsistent with the Bankruptcy Code.

K. Other Material Provisions of the Plan.

1. Payment of Statutory Fees.

All fees payable pursuant to section 1930 of title 28 of the United States Code, as determined by the Bankruptcy Court at the Confirmation Hearing, shall be paid by the Debtors on or before the Effective Date.

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From and after the Effective Date, the Debtors shall pay the fees assessed under section 1930 of title 28 of the United States Code until entry of an order closing the Chapter 11 Cases.

2. Satisfaction of Claims.

The rights afforded in the Plan and the treatment of all Claims and Equity Interests therein shall be in exchange for and in complete satisfaction, discharge, and release of all Claims and Equity Interests of any nature whatsoever, including any accrued Post-Petition Interest, against the Debtors and the Debtors in Possession, or any of their Estates, Assets, properties, or interests in property. Except as otherwise provided in the Plan, on the Effective Date, all Claims against and Equity Interests in the Debtors and the Debtors in Possession shall be satisfied, discharged, and released in full. Neither the Reorganized GSI Entities nor the Debtors shall be responsible for any pre-Effective Date obligations of the Debtors or the Debtors in Possession, except those expressly assumed by the Reorganized GSI Entities or any such Debtor, as applicable. Except as otherwise provided in the Plan, all Persons shall be precluded and forever barred from asserting against the Reorganized GSI Entities, the Debtors, their respective successors or assigns, or their Estates, Affiliates, Assets, properties, or interests in property any event, occurrence, condition, thing, or other or further Claims, Equity Interests or Causes of Action based upon any act, omission, transaction, or other activity of any kind or nature that occurred or came into existence prior to the Effective Date, whether or not the facts of or legal bases therefore were known or existed prior to the Effective Date.

3. Special Provisions Regarding Insured Claims.

Plan Distributions to each holder of an allowed Insured Claim against any Debtor shall be in accordance with the treatment provided under the Plan for the Class in which such Allowed Insured Claim is classified; provided, however, that there shall be deducted from any Plan Distribution on account of an Insured Claim, for purposes of calculating the Allowed amount of such Claim, the amount of any insurance proceeds actually received by such holder in respect of such Allowed Insured Claim. Nothing in Section 13.3 of the Plan shall constitute a waiver of any claim, right, or Cause of Action the Debtors or their Estates may hold against any Person, including any insurer. Pursuant to section 524(e) of the Bankruptcy Code, nothing in the Plan shall release or discharge any insurer from any obligations to any Person under applicable law or any policy of insurance under which a Debtor is an insured or beneficiary.

4. Subrogation.

To the extent the holder of an Allowed Guarantee Claim (other than Senior Note Claims) receives a Plan Distribution from a Guarantor Debtor and/or its Estate, and except as provided below, such Guarantor Debtor shall be subrogated to the rights of the holder of such Allowed Guarantee Claim to collect and receive a Plan Distribution on account of such Claim from the Obligor Debtor and/or its Estate under the Plan.

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5. Third Party Agreements; Subordination.

The Plan Distributions to the various classes of Claims and Equity Interests hereunder shall not affect the right of any Person to levy, garnish, attach or employ any other legal process with respect to such Plan Distributions by reason of any claimed subordination rights or otherwise. All such rights and any agreements relating thereto shall remain in full force and effect, except as otherwise compromised and settled pursuant to the Plan. Plan Distributions shall be subject to and modified by any Final Order directing distributions other than as provided in the Plan. The right of the Debtors or any Committee to seek subordination of any Claim or Equity Interest pursuant to section 510 of the Bankruptcy Code is fully reserved, and the treatment afforded any Claim or Equity Interest that becomes a Subordinated Claim or subordinated Equity Interest at any time shall be modified to reflect such subordination. Unless the Confirmation Order provides otherwise, no Plan Distributions shall be made on account of a Subordinated Claim or subordinated Equity Interest.

6. Exculpation.

None of the Released Parties shall have or incur any liability to any Person for any act or omission in connection with, or arising out of, the pursuit of confirmation of the Plan, the consummation of the Plan, the negotiation of the Plan Support Agreement, the New Indenture, the New Warrants, the New Senior Secured Notes, the Registration Rights Agreement and the Security Documents, or the implementation or administration of the Plan, the Plan Support Agreement or the property to be distributed under the Plan, except for any willful misconduct or gross negligence, as finally determined by the Bankruptcy Court, and, in all respects shall be entitled to rely upon the advice of counsel and all information provided by other exculpated persons herein without any duty to investigate the veracity or accuracy of such information with respect to their duties and responsibilities under the Plan, the negotiation of the Plan Support Agreement, the New Indenture, the New Warrants, the New Senior Secured Notes, the Registration Right Agreement and the Security Documents.

7. Discharge of Liabilities.

Except as otherwise provided in the Plan, upon the occurrence of the Effective Date, the Debtors shall be discharged from all Claims, Equity Interests and Causes of Action to the fullest extent permitted by section 1141 of the Bankruptcy Code, and all holders of Claims and Equity Interests shall be precluded from asserting against the Reorganized GSI Entities and their Affiliates, the Debtors, their Assets, or any property dealt with under the Plan, any further or other Cause of Action based upon any act or omission, transaction, event, thing, or other activity of any kind or nature that occurred or came into existence prior to the Effective Date.

EXCEPT AS OTHERWISE PROVIDED IN THE PLAN, THE REORGANIZED GSI ENTITIES AND THEIR AFFILIATES SHALL NOT HAVE, AND SHALL NOT BE CONSTRUED TO HAVE OR MAINTAIN ANY LIABILITY, CLAIM, OR OBLIGATION, THAT IS BASED IN WHOLE OR IN PART ON ANY ACT, OMISSION, TRANSACTION, EVENT, OTHER OCCURRENCE OR THING OCCURRING OR IN

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EXISTENCE ON OR PRIOR TO THE EFFECTIVE DATE OF THE PLAN AND NO SUCH LIABILITIES, CLAIMS, OR OBLIGATIONS FOR ANY ACTS SHALL ATTACH TO THE REORGANIZED GSI ENTITIES AND THEIR AFFILIATES.

8. Discharge of Debtors.

Except as otherwise provided in the Plan or the Confirmation Order, on the Effective Date, without further notice or order, all Claims of any nature whatsoever shall be automatically discharged forever. Except as otherwise provided in the Plan or the Confirmation Order, on the Effective Date, the Debtors, their Estates, and all successors thereto shall be deemed fully discharged and released from any and all Claims, including, but not limited to, demands and liabilities that arose before the Effective Date, and all debts of the kind specified in sections 502(g), 502(h), and 502(i) of the Bankruptcy Code, whether or not (a) a proof of claim based upon such debt is filed or deemed filed under section 501 of the Bankruptcy Code; (b) a Claim based upon such debt is allowed under section 502 of the Bankruptcy Code; or (c) the holder of a Claim based upon such debt has accepted the Plan. The Confirmation Order shall be a judicial determination of discharge of all liabilities of the Debtors, their Estates, and all successors thereto. As provided in section 524 of the Bankruptcy Code, such discharge shall void any judgment against the Debtors, their Estates, or any successor thereto at any time obtained to the extent it relates to a discharged Claim, and operates as an injunction against the prosecution of any action against the Reorganized GSI Entities or property of the Debtors or their Estates to the extent it relates to a discharged Claim. Notwithstanding any language to the contrary contained in the Disclosure Statement, Plan and/or Confirmation Order, no provision shall preclude the U.S. Securities and Exchange Commission from enforcing its police or regulatory powers. This paragraph shall not affect or limit the discharge granted to the Debtors under sections 524 and 1141 of the Bankruptcy Code.

9. Governing Law.

Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and the Bankruptcy Rules), the laws of the State of Delaware, without giving effect to the conflicts of laws principles thereof, shall govern the construction of the Plan and any agreements, documents, and instruments executed in connection with the Plan, except as otherwise expressly provided in such instruments, agreements or documents.

10. Interest and Attorneys’ Fees.

Interest accrued after the Petition Date will accrue and be paid on Claims only to the extent specifically provided for in the Plan, the Confirmation Order or as otherwise required by the Bankruptcy Court or by applicable law. No award or reimbursement of attorneys’ fees or related expenses or disbursements shall be allowed on, or in connection with, any Claim or Equity Interest, except as set forth in the Plan, the Plan Support Agreement or as ordered by the Bankruptcy Court.

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All reasonable, due and unpaid fees, costs and expenses of (i) Schulte Roth & Zabel LLP, legal counsel for the Required Noteholders, (ii) local Delaware and Canadian legal counsel for the Required Noteholders and (iii) Houlihan Lokey Howard & Zukin Capital, Inc., financial advisor for the Required Noteholders, shall, in each case, be paid on the Effective Date in accordance with the Plan Support Agreement and the Indenture.

11. Modification of the Plan.

Subject to the limitations set forth in the Plan Support Agreement, modifications of the Plan, as provided in section 1127 of the Bankruptcy Code, may be proposed in writing by the Debtors at any time before confirmation, provided that the Plan, as modified, meets the requirements of sections 1122 and 1123 of the Bankruptcy Code, and the Debtors shall have complied with section 1125 of the Bankruptcy Code. Subject to the terms of the Plan Support Agreement, the Debtors may modify the Plan at any time after confirmation and before substantial consummation, provided that the Plan, as modified, meets the requirements of sections 1122 and 1123 of the Bankruptcy Code and the Bankruptcy Court, after notice and a hearing, confirms the Plan as modified, under section 1129 of the Bankruptcy Code, and the circumstances warrant such modifications. Subject to the terms of the Plan Support Agreement, a holder of a Claim or Equity Interest that has accepted the Plan shall be deemed to have accepted such Plan as modified if the proposed alteration, amendment or modification does not materially and adversely change the treatment of the Claim or Equity Interest of such holder. Nothing in the Plan is intended to modify or alter the rights of the parties under the Plan Support Agreement and any amendment, modification or supplement to the Plan may only be made in accordance with the terms of the Plan Support Agreement.

12. Revocation of Plan.

The Debtors reserve the right to revoke or withdraw the Plan and/or to adjourn the Confirmation Hearing with respect to any one or more of the Debtors prior to the occurrence of the Effective Date. If the Debtors revoke or withdraw the Plan with respect to any one or more of the Debtors, or if the Effective Date does not occur as to any Debtor, then, as to such Debtor, the Plan and all settlements and compromises set forth in the Plan and not otherwise approved by a separate Final Order shall be deemed null and void and nothing contained herein and no acts taken in preparation for consummation of the Plan shall be deemed to constitute a waiver or release of any Claims against or Equity Interests in such Debtor or to prejudice in any manner the rights of any of the Debtors or any other Person in any other further proceedings involving such Debtor.

In the event that the Debtors choose to adjourn the Confirmation Hearing with respect to any one or more of the Debtors, the Debtors reserve the right to proceed with confirmation of the Plan with respect to those Debtors in relation to which the Confirmation Hearing has not been adjourned. With respect to those Debtors for which the Confirmation Hearing has been adjourned, the Debtors reserve the right to amend, modify, revoke or withdraw the Plan and/or submit any new plan of reorganization at such times and in such manner as they consider appropriate, subject to the provisions of the Bankruptcy Code.

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13. Setoff Rights.

In the event that any Debtor has a Claim of any nature whatsoever against the holder of a Claim against such Debtor, then such Debtor may, but is not required to, set off against the Claim (and any payments or other Plan Distributions to be made in respect of such Claim hereunder) such Debtor’s Claim against such holder, subject to the provisions of sections 553, 556 and 560 of the Bankruptcy Code. Neither the failure to set off nor the allowance of any Claim under the Plan shall constitute a waiver or release of any Claims that any Debtor may have against the holder of any Claim.

14. Rates; Currency.

The Plan does not provide for the change of any rate that is within the jurisdiction of any governmental regulatory commission after the occurrence of the Effective Date. Where a Claim has been denominated in foreign currency on a proof of Claim, the Allowed amount of such Claim shall be calculated in legal tender of the United States based upon the conversion rate in place as of the Petition Date, and the amount of such Claim in legal tender of the United States’ as of the Petition Date shall be used for calculating Post-Petition Interest, if any.

15. Injunctions.

On the Effective Date and except as otherwise provided in the Plan, all Persons who have been, are or may be holders of Claims against or Equity Interests in the Debtors shall be permanently enjoined from taking any of the following actions against or affecting the Reorganized GSI Entities and their Affiliates, the Debtors, the Estates, the Assets, or the Disbursing Agent, or any of their current or former respective members, directors, managers, officers, employees and agents and their respective professionals, successors and assigns or their respective assets and property, with respect to such Claims or Equity Interests (other than actions brought to enforce any rights or obligations under the Plan):

(a) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind (including, without limitation, all suits, actions and proceedings that are pending as of the Effective Date, which must be withdrawn or dismissed with prejudice);

(b) enforcing, levying, attaching, collecting or otherwise recovering by any manner or means, whether directly or indirectly, any judgment, award, decree or order;

(c) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance; and

(d) asserting any setoff, right of subrogation or recoupment of any kind; provided, that any defenses, offsets or counterclaims which the Debtors may have or assert in respect of the above referenced Claims or Equity Interests are fully preserved in accordance with Section 13.19 of the Plan.

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16. Binding Effect.

The Plan shall be binding upon the Reorganized GSI Entities and their Affiliates, the Debtors, the holders of all Claims and Equity Interests, parties in interest, Persons and their respective successors and assigns. To the extent any provision of the Disclosure Statement or any other solicitation document may be inconsistent with the terms of the Plan, the terms of the Plan shall be binding and conclusive.

17. Severability.

IN THE EVENT THE BANKRUPTCY COURT DETERMINES THAT ANY PROVISION OF THE PLAN IS UNENFORCEABLE EITHER ON ITS FACE OR AS APPLIED TO ANY CLAIM OR EQUITY INTEREST OR TRANSACTION, THE DEBTORS MAY MODIFY THE PLAN IN ACCORDANCE WITH SECTION 13.17 OF THE PLAN SO THAT SUCH PROVISION SHALL NOT BE APPLICABLE TO THE HOLDER OF ANY SUCH CLAIM OR EQUITY INTEREST OR TRANSACTION. SUCH A DETERMINATION OF UNENFORCEABILITY SHALL NOT (A) LIMIT OR AFFECT THE ENFORCEABILITY AND OPERATIVE EFFECT OF ANY OTHER PROVISION OF THE PLAN OR (B) REQUIRE THE RESOLICITATION OF ANY ACCEPTANCE OR REJECTION OF THE PLAN.

18. No Admissions.

AS TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS AND OTHER CAUSES OF ACTION OR THREATENED CAUSES OF ACTIONS, THE PLAN SHALL NOT CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, STIPULATION OR WAIVER, BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS. THE PLAN SHALL NOT BE ADMISSIBLE IN ANY NON-BANKRUPTCY PROCEEDING NOR SHALL IT BE CONSTRUED TO BE CONCLUSIVE ADVICE ON THE TAX, SECURITIES AND OTHER LEGAL EFFECTS OF THE PLAN AS TO HOLDERS OF CLAIMS AGAINST, AND EQUITY INTERESTS IN, HOLDINGS OR ANY OF ITS SUBSIDIARIES AND AFFILIATES, AS DEBTORS AND DEBTORS IN POSSESSION IN THESE CHAPTER 11 CASES.

VIII.  RISK FACTORS

The holder of a Claim against or Equity Interest in the Debtors should read and carefully consider the following factors, as well as the other information set forth in this Disclosure Statement (and the documents delivered together herewith and/or incorporated by reference herein), before deciding whether to vote to accept or reject the Plan.

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A. General Considerations.

The formulation of a reorganization plan is a principal purpose of a chapter 11 case. The Plan sets forth the means for satisfying the Claims against and Equity Interests in the Debtors. Reorganization of the Debtors’ businesses and operations under the proposed Plan also avoids the potentially adverse impact of a protracted and costly reorganization.

B. Termination Rights Under Plan Support Agreement

The Debtors ability to consummate the transactions contemplated by the Plan is conditioned upon, among other things, satisfaction of the terms contained in the Plan Support Agreement and Plan Documents, which contains certain closing conditions and termination rights.

The Consenting Noteholders are entitled to terminate the Plan Support Agreement if, among other things, (i) the Debtors are in material breach of any of their obligations under the Plan Support Agreement, (ii) the Debtors file any motion or pleading with the Bankruptcy Court that is not consistent in any material respect with the Plan Support Agreement or the Plan, and such motion or pleading has not been withdrawn within five (5) Business Days of the Debtors receiving notice from the Consenting Noteholders that such motion or pleading is inconsistent with the Plan Support Agreement or the Plan, (iii) the Bankruptcy Court grants relief that is materially inconsistent with the Plan Support Agreement or the Plan; (iv) the Debtors fail to obtain an order approving the Disclosure Statement and solicitation procedures by January 10, 2010, (v) the Debtors fail to obtain entry of a Confirmation Order by April 5, 2010, (vi) the Bankruptcy Court enters an order invalidating, disallowing, subordinating, recharacterizing or limiting in any respect, the principal and interest components of the Senior Note Claims or disgorging any amounts from any holder of the Senior Note Claim, (vii) there is a Material Adverse Change (as defined in the Plan Support Agreement), (viii) the Assumption Order has not been obtained within 35 days after the Petition Date, (ix) the Effective Date shall not have occurred by April 20, 2010 unless such date is extended pursuant to the Plan Support Agreement, (x) any Debtor moves (1) to voluntarily dismiss any of the Chapter 11 Cases, (2) for conversion of any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, or (3) for appointment of a trustee or an examiner with expanded powers pursuant to Section 1104 of the Bankruptcy Code in any of the Chapter 11 Cases, (xi) a trustee or an examiner with expanded powers is appointed in any of the Chapter 11 Cases, or any of the Chapter 11 Cases is dismissed or converted to a case under chapter 7 of the Bankruptcy Code, (xii) any court of competent jurisdiction or other competent governmental or regulatory authority shall have issued a final and nonappealable order making illegal or otherwise preventing, prohibiting or materially restricting the Restructuring (as defined in the Plan Support Agreement), or (xiii) any Debtors withdraws the Plan or files, proposes or otherwise supports any plan of reorganization other than the Plan.

Upon termination, any prior vote of any Consenting Noteholder shall be immediately revoked and deemed void ab initio, which would substantially impede the Debtors ability to consummate the proposed restructuring.

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C. Certain Bankruptcy Considerations.

If the Plan is not confirmed and consummated, there can be no assurance that any alternative plan of reorganization would be on terms as favorable to the holders of impaired Claims or Equity Interests as the terms of the Plan. In addition, if a protracted reorganization were to occur, there is a substantial risk that holders of Claims and Equity Interests would receive less than they will receive under the Plan. See Exhibit “D” hereto for a liquidation analysis of the Debtors (the “Liquidation Analysis”).

D. Inherent Uncertainty of Financial Projections.

The Projections set forth in Exhibit “C” hereto cover the Debtors’ operations through fiscal year 2013. These Projections are based on numerous assumptions, including the timing, confirmation and consummation of the Plan in accordance with its terms, the anticipated future performance of the Reorganized GSI Entities, industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Reorganized GSI Entities and some or all of which may not materialize. In addition, unanticipated events and circumstances occurring subsequent to the date that this Disclosure Statement is approved by the Bankruptcy Court may affect the actual financial results of the Reorganized GSI Entities’ operations. These variations may be material and may adversely affect the ability of the Reorganized GSI Entities to make payments with respect to post-Effective Date indebtedness. Because the actual results achieved throughout the periods covered by the Projections may vary from the projected results, the Projections should not be relied upon as a guaranty, representation or other assurance of the actual results that will occur.

Except with respect to the Projections and except as otherwise specifically and expressly stated herein, this Disclosure Statement does not reflect any events that may occur subsequent to the date hereof and that may have a material impact on the information contained in this Disclosure Statement. Neither the Debtors nor the Reorganized GSI Entities intend to update the Projections for the purposes hereof; thus, the Projections will not reflect the impact of any subsequent events not already accounted for in the assumptions underlying the Projections.

E. Claims Estimations.

There can be no assurance that the estimated Claim amounts set forth herein are correct, and the actual amount of Allowed Claims may differ from the estimates. The estimated amounts are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the actual amount of Allowed Claims may vary from those estimated herein.

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IX. CONFIRMATION AND CONSUMMATION PROCEDURES

A. Overview.

A plan of reorganization may provide anything from a complex restructuring of a debtor’s business and its related obligations to a simple liquidation of the debtor’s assets. In either event, upon confirmation of the plan, it becomes binding on the debtor and all of its creditors and equity holders, and the obligations owed by the debtor to such parties are compromised and exchanged for the obligations specified in the plan. Before soliciting acceptances of the proposed plan, section 1125 of the Bankruptcy Code requires the debtor to prepare and file a disclosure statement containing adequate information of a kind, and in sufficient detail, to enable a hypothetical reasonable investor to make an informed judgment about the plan. This Disclosure Statement is presented to holders of Claims against and Equity Interests in the Debtors to satisfy the requirements of section 1125 of the Bankruptcy Code in connection with the Debtors’ solicitation of votes on the Plan.

If all classes of claims and equity interests accept a plan of reorganization, the bankruptcy court may confirm the plan if the bankruptcy court independently determines that the requirements of section 1129(a) of the Bankruptcy Code have been satisfied. Section 1129(a) sets forth the requirements for confirmation of a plan and, among other things, requires that a plan meet the “best interests of creditors” test and be “feasible.” The “best interests” test generally requires that the value of the consideration to be distributed to the holders of claims or equity interests under a plan may not be less than those parties would receive if the debtor were liquidated pursuant to a hypothetical liquidation occurring under chapter 7 of the Bankruptcy Code. Under the “feasibility” requirement, the bankruptcy court generally must find that there is a reasonable probability that the debtor will be able to meet its obligations under its plan without the need for further financial reorganization. The Debtors believe that the Plan satisfies all the applicable requirements of section 1129(a) of the Bankruptcy Code, including, in particular, the best interests of creditors’ test and the feasibility requirement.

The Bankruptcy Code does not require that each holder of a claim or interest in a particular class vote in favor of a plan of reorganization for the bankruptcy court to determine that the class has accepted the plan. Rather, a class of creditors will be determined to have accepted the plan if the bankruptcy court determines that the plan has been accepted by a majority in number and two-thirds in amount of those claims actually voting in such class. Similarly, a class of equity security holders will have accepted the plan if the bankruptcy court determines that the plan has been accepted by holders of two-thirds of the number of shares actually voting in such class.

In addition, classes of claims or equity interests that are not “impaired” under a plan of reorganization are conclusively presumed to have accepted the plan and thus are not entitled to vote. Furthermore, classes that are to receive no distribution under the plan are conclusively deemed to have rejected the plan. Accordingly, acceptances of a plan will generally be solicited only from those persons who hold claims or equity interests in an impaired class. A class is “impaired” if the legal, equitable, or contractual rights associated with the claims or equity interests of that class are modified in any way under the plan. Modification for purposes of

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determining impairment, however, does not include curing defaults and reinstating maturity on the effective date of the plan. Except for Class 1 — Priority Claims, Class 2 — Secured Claims, Class 3 — General Unsecured Claims, Class 4 — Intercompany Claims, Class 6B — GSI Equity Interests, Class 6C — MES Equity Interests, which are unimpaired, the other classes of Claims and Equity Interests are impaired under the Plan and are entitled to vote on the Plan.

The bankruptcy court also may confirm a plan of reorganization even though fewer than all the classes of impaired claims and equity interests accept such plan. For a plan of reorganization to be confirmed despite its rejection by a class of impaired claims or equity interests, the plan must be accepted by at least one class of impaired claims (determined without counting the vote of insiders) and the proponent of the plan must show, among other things, that the plan does not “discriminate unfairly” and that the plan is “fair and equitable” with respect to each impaired class of claims or equity interests that has not accepted the plan.

Under section 1129(b) of the Bankruptcy Code, a plan is “fair and equitable” as to a rejecting class of claims or equity interests if, among other things, the plan provides: (a) with respect to secured claims, that each such holder will receive or retain on account of its claim property that has a value, as of the effective date of the plan, equal to the allowed amount of such claim; and (b) with respect to unsecured claims and equity interests, that the holder of any claim or equity interest that is junior to the claims or equity interests of such class will not receive or retain on account of such junior claim or equity interest any property from the estate, unless the senior class receives property having a value equal to the full amount of its allowed claim.

A plan does not “discriminate unfairly” against a rejecting class of claims or equity interests if (a) the relative value of the recovery of such class under the plan does not differ materially from that of any class (or classes) of similarly situated claims or equity interests, and (b) no senior class of claims or equity interests is to receive more than 100% of the amount of the claims or equity interest in such class.

The Plan has been structured so that it will satisfy the foregoing requirements as to any rejecting class of Claims or Equity Interests, and can therefore be confirmed, if necessary, over the objection of any (but not all) classes of Claims or Equity Interests.

B. Confirmation of the Plan.

1. Elements of Section 1129 of the Bankruptcy Code.

At the Confirmation Hearing, the Bankruptcy Court will confirm the Plan only if all of the conditions to confirmation under section 1129 of the Bankruptcy Code are satisfied.

Such conditions include the following:

a. The Plan complies with the applicable provisions of the Bankruptcy Code.

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b. Each of the Debtors has complied with the applicable provisions of the Bankruptcy Code.

c. The Plan has been proposed in good faith and not by any means proscribed by law.

d. Any payment made or promised by the Debtors or by an entity issuing securities or acquiring property under the Plan for services or for costs and expenses in, or in connection with, the Chapter 11 Cases, or in connection with the Plan and incident to the Chapter 11 Cases, has been disclosed to the Bankruptcy Court; and any such payment made before the confirmation of the Plan is reasonable, or if such payment is to be fixed after confirmation of the Plan, such payment is subject to the approval of the Bankruptcy Court as reasonable.

e. The Debtors have disclosed the identity and affiliations of any individual proposed to serve, after confirmation of the Plan, as a director, officer or voting trustee of the Debtors or a successor to the Debtors under the Plan and the appointment to, or continuance in, such office of such individual is consistent with the interests of creditors and equity holders and with public policy, and the Debtors have disclosed the identity of any insider that will be employed or retained by such Debtor, and the nature of any compensation for such insider.

f. With respect to each impaired class of Claims or Equity Interests, each holder of an impaired Claim or impaired Equity Interest either has accepted the Plan or will receive or retain under the Plan, on account of the Claims or Equity Interests held by such entity, property of a value, as of the applicable consummation date under the Plan, that is not less than the amount that such entity would receive or retain if the Debtors were liquidated on such date under chapter 7 of the Bankruptcy Code. In the event that the Debtors do not move to confirm the Plan nonconsensually, each class of Claims or Equity Interests entitled to vote has either accepted the Plan or is not impaired under the Plan.

g. Except to the extent that the holder of a particular Claim has agreed to a different treatment of such Claim, the Plan provides that Administrative Claims and Priority Claims will be paid in full on the applicable consummation date and that Tax Claims will be paid in full, in cash, on the applicable consummation date or as soon as practicable thereafter; however, the Debtors shall have the right to make deferred cash payments on account of such Tax Claims over a period not exceeding six (6) years after the date of assessment of such Claims, having a value, as of the applicable consummation date, equal to the allowed amount of such Claims.

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h. At least one impaired class of Claims has accepted the Plan, determined without including any acceptance of the Plan by any insider holding a Claim in such class.

i. Confirmation of the Plan is not likely to be followed by the liquidation or the need for further financial reorganization of the Debtors or any other successor to the Debtors under the Plan, unless such liquidation or reorganization is proposed in the Plan. See “Financial Projections and Assumptions.”

j. All fees payable under section 1930 of Bankruptcy Code, as determined by the Bankruptcy Court at the Confirmation Hearing, have been paid or the Plan provides for the payment of all such fees on the Effective Date of the Plan.

The Plan provides for the continuation after the consummation of the Plan of payment of all retiree benefits at the level established under section 1114(e)(1)(B) or (g) of the Bankruptcy Code at any time prior to confirmation of the Plan, for the duration of the period each of the Debtors has obligated itself to provide such benefits.

The Debtors believe that the Plan will satisfy all the statutory provisions of chapter 11 of the Bankruptcy Code, that they have complied or will have complied with all of the provisions of the Bankruptcy Code, and that the Plan is being proposed and will be submitted to the Bankruptcy Court in good faith.

2. Acceptance.

A class of Claims will have accepted the Plan if the Plan is accepted, with reference to a class of Claims, by at least two-thirds in amount and more than one-half in number of the Allowed Claims of each such class of Claims. Each class of Equity Interests will have accepted the Plan if the Plan is accepted with reference to a class of Equity Interests, by at least two-thirds in amount of the Allowed Equity Interests of each class of Equity Interests.

3. Best Interests Test/Liquidation Analysis.

With respect to each impaired class of holders of Claims and Equity Interests, confirmation of the Plan requires that each such holder either (a) accept the Plan or (b) receive or retain under the Plan property of a value, as of the applicable consummation date under the Plan, that is not less than the value such holder would receive or retain if the Debtors were liquidated under chapter 7 of the Bankruptcy Code.

To determine what holders of Claims and Equity Interests of each impaired class would receive if the Debtors were liquidated, the Bankruptcy Court must determine the proceeds that would be generated from the liquidation of the properties and interests in property of the Debtors in a chapter 7 liquidation case. The proceeds that would be available for satisfaction of Unsecured Claims against and Equity Interests in the Debtors would consist of the proceeds

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generated by disposition of the unencumbered equity in the properties and interests in property of the Debtors and the cash held by the Debtors at the time of the commencement of the liquidation case. Such proceeds would be reduced by the costs and expenses of the liquidation and by such additional administration and priority claims that may result from the termination of the business of the Debtors and the use of chapter 7 for the purposes of liquidation.

The costs of liquidation under chapter 7 of the Bankruptcy Code would include the fees payable to a trustee in bankruptcy, and the fees that would be payable to additional attorneys and other professionals that such a trustee may engage, plus any unpaid expenses incurred by the Debtors during the Chapter 11 Cases, such as compensation for attorneys, financial advisors, accountants and costs that are allowed in the chapter 7 case. In addition, Claims would arise by reason of the breach or rejection of obligations incurred and executory contracts entered into or assumed by the Debtors during the pendency of the Chapter 11 Cases.

The foregoing types of Claims and such other Claims which may arise in the liquidation cases or result from the pending Chapter 11 Cases would be paid in full from the liquidation proceeds before the balance of those proceeds would be made available to pay Unsecured Claims arising on or before the Petition Date.

To determine if the Plan is in the best interests of each impaired class, the present value of the distributions from the proceeds of the liquidation of the properties and interests in property of the Debtors (net of the amounts attributable to the aforesaid claims) is then compared with the present value offered to such classes of Claims and Equity Interests under the Plan.

In applying the “best interests” test, it is possible that Claims and Equity Interests in the chapter 7 cases may not be classified according to the seniority of such Claims and Equity Interests as provided in the Plan. In the absence of a contrary determination by the Bankruptcy Court, all Unsecured Claims arising on or before the Petition Date which have the same rights upon liquidation would be treated as one class for the purposes of determining the potential distribution of the liquidation proceeds resulting from the chapter 7 cases of the Debtors. The distributions from the liquidation proceeds would be calculated ratably according to the amount of the Claim held by each creditor. Therefore, creditors who claim to be third-party beneficiaries of any contractual subordination provisions might have to seek to enforce such contractual subordination provisions in the Bankruptcy Court or otherwise. The Debtors believe that the most likely outcome of liquidation proceedings under chapter 7 would be the application of the rule of absolute priority of distributions. Under that rule, no junior creditor receives any distribution until all senior creditors are paid in full with interest, and no stockholder receives any distribution until all creditors are paid in full with interest.

After consideration of the effects that a chapter 7 liquidation would have on the ultimate proceeds available for distribution to creditors in the Chapter 11 Cases, including: (i) the increased costs and expenses of a liquidation under chapter 7 arising from fees payable to a trustee in bankruptcy and professional advisors to such trustee; (ii) the erosion in value of assets in a chapter 7 case in the context of the expeditious liquidation required under chapter 7 and the “forced sale” environment in which such a liquidation would likely occur; (iii) the adverse effects on the salability of business segments as a result of the likely departure of key employees and the loss of customers; and (iv) the substantial increases in claims which would be satisfied

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on a priority basis or on parity with creditors in the Chapter 11 cases, the Debtors believe that confirmation of the Plan will provide each holder of a Claim or Equity Interest with a greater recovery than it would receive pursuant to liquidation of the Debtors under chapter 7 of the Bankruptcy Code.

4. The Liquidation Analysis is attached hereto as Exhibit “D”. Feasibility.

The Bankruptcy Code conditions confirmation of a plan of reorganization on, among other things, a finding that it is not likely to be followed by the liquidation or the need for further financial reorganization of a debtor. For purposes of determining whether the Plan satisfies this condition, the Debtors have analyzed the capacity of each Debtor to service its obligations under the Plan. Based upon their analysis of their Projections, the Debtors believe they will be able to make all payments required to be made under the Plan. See “Financial Projections and Assumptions.”

C. Cramdown.

In the event that any impaired class does not accept the Plan, the Debtors nevertheless may move for confirmation of the Plan. To obtain such confirmation, it must be demonstrated to the Bankruptcy Court that the Plan “does not discriminate unfairly” and is “fair and equitable” with respect to such classes and any other classes of Claims that vote to reject the Plan.

Based on the information available to the Equity Committee and its diligence to date, if holders of equity interests vote to reject the Plan, the Equity Committee believes that the Debtors cannot meet the “cramdown” requirements to confirm the Plan. In particular, the Equity Committee believes that the holders of the Senior Notes are receiving under the Plan payments and property with an aggregate value substantially greater than necessary to pay all such holders the full amount of their Allowed Claims.

The Debtors do not share this opinion, and believe that holders of the Senior Notes likely will receive more, and that the holders of equity interests will likely receive less, or even nothing, if this Plan is not confirmed.

Moreover, holders of 88.1% of the Senior Notes have stated that they intend to demonstrate with evidence at the Confirmation Hearing that holders of the Senior Notes are not receiving distributions greater than the amount of their Allowed Claim.

1. No Unfair Discrimination.

A plan of reorganization “does not discriminate unfairly” if (a) the legal rights of a nonaccepting class are treated in a manner that is consistent with the treatment of other classes whose legal rights are similar to the legal rights of the nonaccepting class, and (b) no class receives payments in excess of that which it is legally entitled to receive for its Claims or Equity Interests. The Debtors believe that under the Plan all impaired classes of Claims and Equity

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Interests are treated in a manner that is consistent with the treatment of other classes of Claims and Equity Interests that are similarly situated, if any, and no class of Claims or Equity Interests will receive payments or property with an aggregate value greater than the aggregate value of the Allowed Claims and Allowed Equity Interests in such class. Accordingly, the Debtors believe the Plan does not discriminate unfairly as to any impaired class of Claims or Equity Interests.

2. Fair and Equitable Test.

The Bankruptcy Code establishes different “fair and equitable” tests for secured creditors, unsecured creditors and holders of equity interest as follows:

a. Secured Creditors. Either (i) each impaired secured creditor retains its liens securing its secured claim and it receives on account of its secured claim deferred cash payments having a present value equal to the amount of its allowed secured claim, (ii) each impaired secured creditor realizes the indubitable equivalent of its allowed secured claim, or (iii) the property securing the claim is sold free and clear of liens, with such liens to attach to the proceeds and the treatment of such liens on proceeds as provided in clause (i) or (ii) of this subparagraph.

b. Unsecured Creditors. Either (i) each impaired unsecured creditor receives or retains under the plan property of a value equal to the amount of its allowed claim or (ii) the holders of claims and interests that are junior to the claims of the dissenting class will not receive any property under the plan of reorganization, subject to the applicability of the judicial doctrine of contributing new value.

c. Holders of Equity Interests. Either (i) each holder of an equity interest will receive or retain under the plan of reorganization property of a value equal to the greater of (a) the fixed liquidation preference or redemption price, if any, of such stock or (b) the value of the stock or (ii) the holders of interests that are junior to the stock will not receive any property under the plan of reorganization, subject to the applicability of the judicial doctrine of contributing new value.

THE DEBTORS MAY MOVE FOR CONFIRMATION OF THE PLAN IF LESS THAN THE REQUISITE HOLDERS OF CLAIMS OR EQUITY INTERESTS IN ANY CLASS VOTE TO ACCEPT THE PLAN.

D. Effect of Confirmation

Under Section 1141 of the Bankruptcy Code, the provisions of a confirmed plan bind the debtor, any entity issuing securities under the plan, any entity acquiring property under the plan, and any creditor or equity security holder, whether or not the claim or interest of such creditor or equity security holder is impaired under the plan and whether or not such creditor or equity security holder voted to accept the plan. Further, after confirmation of a plan, the property dealt with by the plan is free and clear of all claims and interests of creditors and equity security holders, except as otherwise provided in the plan or the confirmation order.

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X. MANAGEMENT OF THE REORGANIZED DEBTORS

The members of the boards of directors or managers of each Debtor who are serving as of the Confirmation Date will continue to serve in such capacities until the Effective Date. Entry of the Confirmation Order shall ratify and approve all actions taken by the board of directors or managers of the Debtors from the Petition Date through and until the Effective Date. From and after the Effective Date, the management of the Debtors shall be selected in accordance with their respective charters, by-laws and applicable law, and the Plan.

XI. CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

CIRCULAR 230 DISCLOSURE: YOU ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF FEDERAL TAX ISSUES IN THIS DOCUMENT IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON BY YOU FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON YOU UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

The following is a discussion of certain significant U.S federal income tax considerations of the Plan under the Internal Revenue Code. This discussion is limited to (i) certain tax considerations for holders of Senior Notes (the “Senior Noteholders”) who are United States persons (as defined in the Internal Revenue Code) and who hold such interests as “capital assets” and will hold the New Senior Secured Notes and the New Common Shares as capital assets (generally property held for investment) within the meaning of section 1221 of the Internal Revenue Code and (ii) shareholders of Holdings who are United States taxpayers (“U.S. Shareholders”). This discussion does not apply to Holders of Claims or interests other than those held by Senior Noteholders or U.S. Shareholders. This general description does not discuss all aspects of U.S. federal income taxation that may be relevant to a Senior Noteholder or a U.S. Shareholder in light of such Person’s personal investment circumstances, or to certain types of Senior Noteholders subject to special treatment under the federal income tax laws (for example, (i) banks, regulated investment companies, real estate investment trusts, insurance companies, employee stock ownership plans, brokers, dealers in securities or currencies, subchapter S corporations, entities treated as partnerships for U.S. federal income tax purposes, and tax exempt organizations, (ii) persons who hold Claims or interests or who will hold the New Senior Secured Notes or the New Common Shares as part of a straddle, hedge, conversion transaction or other integrated investment, (iii) persons whose functional currency is not the U.S. dollar (iv) persons that use a mark to market method of accounting, and (v) persons that are not U.S. persons under the Internal Revenue Code). In addition, this discussion does not address state, local or non-U.S. taxes. Furthermore, estate and gift tax issues are not addressed herein. This discussion is based upon laws, regulations, rulings and decisions now in effect and upon proposed regulations all of which are subject to change (possibly with retroactive effect) by

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legislation, administrative action or judicial decision. No opinion of counsel has been sought or obtained with respect to any U.S. federal income tax consequences of the Plan and no tax opinion is given by this Disclosure Statement. No rulings or determination letters from the IRS or any other taxing authorities have been obtained or sought with respect to the Plan, and the description below is not binding upon the IRS or such other taxing authorities. With respect to some of the federal income tax consequences discussed herein, the tax law is unclear. Accordingly, it is possible that the IRS will disagree with the description below of the tax consequences, and there can be no certainty that the IRS would not prevail in any challenge it may decide to make in that regard.

A. Tax Consequences to the GSI

GSI has filed for a U.S. federal income tax refund for periods ending December 31, 2006 and December 31, 2007, utilizing an NOL carryback for federal income tax purposes of approximately $8 million generated for the period ending December 31, 2008. GSI expects to report additional losses with respect to its 2009 taxable year. The amount of such NOL carryback and other losses remain subject to adjustment by the IRS. Moreover, as discussed below, such NOL carryback and carryovers and certain other tax attributes of GSI may be reduced and/or subjected to limitation upon the implementation of the Plan.

1. Cancellation of Debt (“COD”) Income

Under the Plan, (i) the Senior Noteholders will exchange 100% of the Senior Notes for their Pro Rata Share of the New Senior Secured Notes, the Cash Note Payment and such number of New Common Shares as will result in the Senior Noteholders owning on a fully diluted basis 74.3% of the outstanding New Common Shares and (ii) the shareholders of Holdings will exchange the Holdings Common Shares for New Common Shares and New Warrants (the “Exchange”). As a result of the anticipated Exchange, the amount of GSI’s aggregate outstanding indebtedness will be reduced. In general, for U.S. federal income tax purposes, a debtor will realize COD income when a creditor accepts less than full payment in satisfaction of its debt. Under section 108 of the Internal Revenue Code, if a debtor corporation transfers stock to a creditor in satisfaction of its indebtedness, such corporation shall be treated as having satisfied the indebtedness with an amount of money equal to the fair market value of the stock. Furthermore, when a corporation uses one debt instrument to retire another, it is treated as having satisfied its prior indebtedness for an amount equal to the “issue price” of the new debt instrument as determined under the OID rules of the Internal Revenue Code, as discussed below. Absent an exception, the amount of COD income realized must be included in taxable income. Because the amount of any COD income resulting from this transaction will depend on the fair market value of the New Common Shares following the Effective Date, it is impossible to know in advance whether there will be COD or the amount of any such COD. It should be noted that the cancellation of the GSI UK Note should not give rise to COD income as a result of the exception in section 108(e)(2) of the Internal Revenue Code.

Section 108 of the Internal Revenue Code provides in part that gross income does not include COD income if the discharge occurs in a case under the Bankruptcy Code. Instead, the taxpayer applies the amount of the COD income that would otherwise be included in gross income to reduce the following tax attributes in the following order: net operating losses or net

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operating loss carryovers, carryovers of the general business credit, carryovers of the minimum tax credit, net capital losses or capital loss carryovers, basis of the taxpayer’s depreciable and non-depreciable property, passive activity loss and credit carryovers and carryovers of foreign tax credit. The taxpayer may elect to first reduce the basis of depreciable property.

The Exchange relating to the Senior Noteholders can be classified for federal income tax purposes in a number of manners and there is considerable uncertainty regarding the IRS’s position on the tax treatment such Exchange. The Exchange relating to the Senior Noteholders will be accomplished by (i) Holdings issuing New Common Shares from its treasury and (ii) Holdings transferring the New Common Shares to the Senior Noteholders in exchange for their Senior Note Claims. Holdings and GSI intend to take the position that the appropriate characterization of the Exchange relating to the Senior Noteholders for U.S. federal income tax purposes is as follows: (i) Holdings issues New Common Shares and contributes them to the capital of GSI and (ii) GSI transfers to the Senior Noteholders, in exchange for their Senior Note Claims, the New Common Shares, the New Senior Secured Notes and the Cash Note Payment. The cash payments for interest, fees and other amounts described in the Plan as payable to the Senior Noteholders will not be treated as part of the consideration paid by GSI in the Exchange. The scenario described above is not the only way that the IRS may attempt to characterize the Exchange. No assurance can be given that such treatment of the Exchange relating to the Senior Noteholders will not be successfully challenged by the IRS and treated in a different manner.

If the characterization of the Exchange relating to the Senior Noteholders described above is not successfully challenged by the IRS, then GSI should realize COD income equal to the difference, if any, between (i) the adjusted issue price of the Senior Notes, and (ii) the sum of the fair market value of the New Common Shares, the issue price of the New Senior Secured Notes and the amount of the Cash Note Payment. Because it is impossible to know the fair market value of the New Common Shares (or the Claims) until on or after the Effective Date, it is uncertain whether there will be any COD income, or if there is COD income, the precise amount of such COD income. However, because the realization of any COD income will occur in a title 11 case, GSI will not recognize any such COD income, but instead will reduce its tax attributes after the end of the tax year in which any such COD income is realized. If the Plan does give rise to COD income, GSI has not decided yet whether it will reduce its NOLs or elect to first reduce the basis of some or all of its depreciable property by the amount of excluded COD income.

2. Limitation on Interest Deductions – Section 163(j)

Under some circumstances, a current deduction of interest expense in the United States may be disallowed under section 163(j) of the Internal Revenue Code. Generally, a U.S. corporation’s interest expense deductions are limited when incurred on debt obligations to a related party if the interest income to the related party is not taxed in the United States. Section 163(j) also limits a deduction for interest expense incurred on indebtedness extended by non-related parties if there is a “disqualified guarantee” on such indebtedness and the interest paid on that indebtedness is not subject to a U.S. gross basis tax such as a withholding tax. Under current law, the rules of section 163(j) generally limit a corporation’s interest expense deduction in a taxable year (1) to the extent any excess interest expense (the excess of the corporation’s net interest expense over 50% of its adjusted taxable income), and (2) in any event, only if the debt-to-equity ratio exceeds 1.5:1. Historically, GSI has been subject to section 163(j) limitations and currently estimates having an excess limitation carryforward for 2008 of approximately $10 million.

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The Debtors estimate that, upon emergence, due in part to the cancellation of intercompany debt between Holdings and GSI (the “Intercompany Note”), GSI will not have a debt-to-equity ratio exceeding 1.5:1. Further, as detailed below, it is expected that GSI will not have a net unrealized built-in loss (“NUBIL”) so that the section 382 rules should not limit the use of excess limitation carryforwards. In summary, it is anticipated that the section 163(j) limitations described above should not substantially impact GSI following the Effective Date because of the reduction in GSI’s debt-to-equity ratio and the expected net unrealized built-in gain (“NUBIG”) position that GSI will be in. Therefore, GSI expects to be able to utilize its section 163(j) carryover to offset its taxable income following the Effective Date.

3. Section 382 Limitation

Under section 382 of the Internal Revenue Code, if a loss corporation undergoes an “ownership change,” the amount of its pre-change losses that may be utilized to offset future taxable income generally will be subject to an annual limitation. Such limitation may also apply to subsequently recognized “built-in” losses, i.e., losses economically accrued but unrecognized as of the date of the ownership change. In general, pursuant to section 382(l)(6) of the Internal Revenue Code, the annual limitation for a corporation that undergoes an ownership change pursuant to a plan of reorganization in a title 11 case would be equal to the product of (i) the value of the loss corporation’s outstanding stock immediately after the ownership change (with certain adjustments) and (ii) the “long-term tax-exempt rate” in effect for the month in which the ownership change occurs (which is, for example, 4.33% for November 2009). Any unused portion of the annual limitation would be available in subsequent years. However, if the loss corporation does not continue its historic business or use a significant portion of its business assets in a new business for two years after the ownership change, the annual limitation would be zero.

In general, an ownership change occurs if the percentage of the value of the loss corporation’s stock owned by one or more direct or indirect 5% shareholders (as specially defined for purposes of section 382 of the Internal Revenue Code) has increased by more than 50 percentage points over the lowest percentage of that value owned by such 5% shareholders at any time during a three-year testing period. When determining who is a 5% shareholder for purposes of section 382, any stock owned by a corporation treated as owned proportionately by shareholders. Accordingly, an ownership change can occur where more than 50% of a loss corporation’s stock is acquired indirectly through an acquisition of stock in the loss corporation’s parent. Based on these indirect ownership rules, it is anticipated that the issuance of New Common Shares pursuant to the Plan will constitute an ownership change of GSI.

As stated above, section 382 also can operate to limit built-in losses recognized subsequent to the date of the ownership change. If a loss corporation has a NUBIL at the time of an ownership change (taking into account most assets and all items of “built-in” income and deductions), then any built-in losses recognized (including by way of depreciation deductions) during the following five years (up to the amount of the original net built-in loss) generally will be treated as a pre-change loss and similarly will be subject to the annual limitation. Similarly,

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an excess limitation carryforward under section 163(j) would be limited if GSI were in a NUBIL position. Conversely, if the loss corporation has a NUBIG at the time of an ownership change, any built-in gains recognized during the following five years (up to the amount of the original net built-in gain) generally will increase the annual limitation in the year recognized, such that the loss corporation would be permitted to use its pre-change losses against such built-in gain income in addition to its regular annual allowance. In general, a loss corporation’s NUBIG or NUBIL will be deemed to be zero unless it is greater than the lesser of (i) $10 million or (ii) 15% of the fair market value of its assets (with certain adjustments) before the ownership change (collectively, the “Built-In Thresholds”). Based on the information currently available, GSI estimates it will be in a NUBIG position and that such NUBIG will exceed the Built-In Thresholds. As such, the Debtors do not anticipate that the NUBIL rules will limit its use of its section 163(j) carryforward amount, which is estimated to be $10 million for 2008. However, if GSI determines that it is in a NUBIL position which exceeds the Built-In Thresholds, it is likely that certain losses and deductions which would otherwise be available to GSI to offset its income realized after the Effective Date may be subject to an annual limitation restricting and deferring GSI’s ability to use such losses and deductions.

4. Holdings’ Status as a Non-U.S. Corporation

Holdings is a non-U.S. corporation organized in Canada and will be subject to the Canadian tax laws following the Effective Date. See Article XII below. Following the Effective Date, GSI will continue to be subject to U.S. tax at the applicable U.S. tax rates and will file a U.S. federal income tax return. In addition, distributions or payments from entities in one jurisdiction to entities in another jurisdiction may be subject to withholding taxes. Holdings does not intend to operate in a manner that will cause it to be treated as engaged in a U.S. trade or business or otherwise be subject to U.S. federal income taxes on its net income. However, even if Holdings is not treated as engaged in a U.S. trade or business, unless an exception applies, Holdings generally will be subject to U.S. federal withholding tax on certain “fixed or determinable annual or periodic gains, profits and income” derived from sources within the United States, such as dividends and certain types of interest.

Section 7874 of the Internal Revenue Code, which was added by the American Jobs Creation Act of 2004, is intended to prevent U.S.-based multinationals from improperly avoiding U.S. taxation by inversion. Section 7874(b) of the Internal Revenue Code provides that, in certain instances, a foreign corporation may be treated as a domestic corporation for U.S. federal income tax purposes. However, section 7874 contains an exception for foreign corporations if, on or before March 4, 2003, such entity acquired directly or indirectly more than half of the properties held directly or indirectly by the domestic corporation. Holdings expects to satisfy this safe harbor; however, no assurance can be given that the IRS will agree with this position.

The IRS may also assert that section 269 of the Internal Revenue Code applies to Holdings’ organization in Canada pursuant to the implementation of the Plan. Under section 269, if the IRS determines that the principal purpose of an acquisition was to evade or avoid U.S. federal income tax by allowing the taxpayer to secure the benefit of a deduction, credit, or other allowance which such person or corporation would not otherwise enjoy, the IRS may disallow such deduction, credit or other allowance. Section 269 applies to a direct or indirect acquisition of 50% or more (by vote or value) of a corporation’s stock. GSI believes that, if the Plan was challenged by the IRS, GSI could show, among other things, that the principal purpose for the Plan was not to evade or avoid federal income tax, and, thus, section 269 should not apply. However, no assurance can be given in this regard.

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5. Alternative Minimum Tax (“AMT”)

In general, an AMT is imposed on a corporation’s alternative minimum taxable income at a 20% rate to the extent such tax exceeds the corporation’s regular federal income tax. For purposes of computing taxable income for AMT purposes, certain tax deductions and other beneficial allowances are modified or eliminated. In particular, even though a corporation otherwise might be able to offset all of its taxable income for regular tax purposes by available NOL carryforwards, only 90% of a corporation’s taxable income for AMT purposes may be offset by available NOL carryforwards (as recomputed for AMT purposes).

In addition, if a corporation undergoes an ownership change within the meaning of section 382 of the Internal Revenue Code and is in a NUBIL position (as determined for AMT purposes) on the date of the ownership change, the corporation’s aggregate tax basis in its assets would be adjusted for certain AMT purposes to reflect the fair market value of such assets as of the change date.

6. Corporate Equity Reduction Transaction

Section 172(b)(1)(E) of the Internal Revenue Code contains special rules that limit a corporation’s ability to carryback certain NOLs. Specifically, if there is a corporate equity reduction transaction (“CERT”) and an applicable corporation has a corporate equity reduction interest loss (“CERT Loss”) during the year in which the CERT occurred or any of the two (2) succeeding tax years, then the CERT Loss may not be carried back to a tax year before the year in which the CERT occurred. Section 172(h) defines a CERT as a major stock acquisition or an excess distribution. Additionally, section 172(h) defines a CERT Loss as the excess of: (A) the NOL for the CERT year over (B) the NOL for the CERT year determined without regard to any interest deductions allocable to the CERT otherwise taken into account in computing the loss.

In 2008, GSI acquired Excel in a transaction that qualifies as a CERT. In connection with this transaction, $8 million was identified as a CERT Loss. Accordingly, GSI cannot carryback more than $8 million for 2008 and 2009.

B. Tax Consequences to the Exchanging Senior Noteholders

1. Exchange of the Senior Notes for New Senior Secured Notes, New Common Shares and the Cash Note Payment

If the Senior Notes and the New Senior Secured Notes are not treated as “securities” for U.S. federal income tax purposes, the Exchange should constitute a taxable event to the Senior Noteholders with the Senior Noteholders deemed to have transferred the Senior Notes to GSI in exchange for the New Senior Secured Notes, the New Common Shares and the Cash Note Payment. If the Senior Notes and the New Senior Secured Notes were determined to be “securities,” then recognition of gain realized by holders of the Senior Notes on the Exchange would generally be deferred except to the extent of the receipt of the Cash Note Payment and

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recognition of losses recognized by holders of Senior Notes on the Exchange would be deferred in their entirety. No assurance can be given that the IRS will concur that the Senior Notes are not “securities.” All facts and circumstances pertaining to the origin and character of an instrument generally are relevant in determining its status as a “security.” Prominent factors that courts have relied upon in determining whether an obligation constitutes a “security” for tax purposes include the term of the instrument, whether the instrument is secured, the degree of subordination of the instrument, the ratio of debt to equity of the obligor, the negotiability of the instrument, the creditworthiness of the obligor, the right to vote or otherwise participate in management of the obligor, the convertibility of the instrument into an equity interest of the obligor, whether payments of interest are fixed, variable or contingent, and whether such payments are made on a current basis or are accrued. Courts generally have held that corporate debt obligations evidenced by written instruments with original maturities of ten years or more will be considered securities, while instruments with original maturities of less than five years will not be considered securities.

If the Senior Notes are not “securities,” each Senior Noteholder should recognize gain or loss on the Exchange equal to the difference between (i) the sum of the fair market value of the New Common Shares and the issue price of the New Senior Secured Notes and the amount of the Cash Note Payment received in the Exchange and (ii) the Senior Noteholder’s tax basis in the Senior Notes. Following the Exchange, a Senior Noteholder should have a tax basis in the New Common Shares equal to the fair market value of such stock on the Exchange Date and a tax basis in the New Senior Secured Notes received by such Senior Noteholder equal to the New Senior Secured Notes’ issue price. The issue price of the New Senior Secured Notes should be the stated maturity amount due under such notes.

The Noteholder’s holding period in the New Common Shares and the New Senior Secured Notes will begin on the day following the Exchange.

To the extent a Senior Noteholder receives cash in satisfaction of interest accrued during the holding period of such instrument, such amount will be taxable to the holder as interest income (if not previously included in the holder’s gross income). Conversely, such holder may recognize a deductible loss to the extent that any accrued interest claimed was previously included in the holder’s gross income and is not paid in full.

The extent to which property received by a holder of a debt instrument will be attributable to accrued but unpaid interest is unclear. Pursuant to the Plan, all distributions in respect of any Claim will be allocated first to the principal amount of such Claim, and thereafter to accrued but unpaid interest, if any. Certain legislative history indicates that an allocation of consideration between principal and interest provided in a bankruptcy plan of reorganization generally is binding for U.S. federal income tax purposes. However, there is no assurance that such allocation will be respected by the IRS.

Holders of Claims are urged to consult their own tax advisors regarding the inclusion in income of amounts received in satisfaction of accrued but unpaid interest, the allocation of consideration between principal and interest, and the deductibility of previously included unpaid interest for tax purposes. Furthermore, to the extent a Senior Noteholder receives cash for fees, expenses and other amounts due under an Allowed Senior Note Claim, such amounts will generally be includible in income in accordance with such Senior Noteholder’s general method of tax accounting.

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In connection with the issuance of the New Senior Secured Notes, which may constitute, in part, a significant modification of the Senior Notes, GSI will pay to the Senior Noteholders their pro rata share of the Cash Note Payment. The Cash Note Payment is a sum certain in cash dependent only upon the various dates upon which the Plan Confirmation occurs; the amount of the Cash Note Payment is reduced as the Confirmation Date is delayed. Although the descending amount of the Cash Note Payment is based upon the passage of time until the Confirmation occurs, GSI is under no prior legal obligation to make a payment to the Senior Noteholders with respect to a Confirmation Date occurring under a title 11 case. Accordingly, subject to the consent of the Senior Noteholders, GSI may treat the Cash Note Payment as a payment of principal on the Senior Notes, which would not be deductible by GSI. Although GSI intends to report the Cash Note Payment as a payment of principal of the Senior Notes, the Internal Revenue Service may challenge this treatment and may instead take the position that the Cash Note Payment represents, alternatively, accrued but unpaid interest on the Senior Notes, or fee income for the certain actions, namely the timely consent of the Senior Noteholders to the Plan. Such characterization would alternatively represent deductible interest expense to GSI, subject to any limitations that may apply, or an expense incurred in connection with a refinancing or restructuring of debt, which would be subject to capitalization by GSI and amortizable over the remaining term of the New Senior Secured Notes.

2. Original Issue Discount (“OID”)

The New Senior Secured Notes permit GSI to pay interest at its option in cash or by issuing PIK notes. However, GSI may not pay interest by issuing PIK notes if, preceding the interest payment date, certain financial ratios exist. If the ability of GSI to elect the PIK option is characterized as a “remote contingency” under the Treasury Regulations, such option may be disregarded and the New Senior Secured Notes may be treated as if interest were payable only in cash. Whether a contingency is “remote” is determined on the issue date. However, GSI does not expect that on the issue date of the New Senior Secured Notes the PIK option would be a “remote contingency.” Thus, GSI does not expect to take the position that the New Senior Secured Notes unconditionally require the payment of interest in cash at least annually. Accordingly, none of the interest payments on the New Senior Secured Notes will be “qualified stated interest even” if interest is paid currently in cash. As a result, income inclusions on the New Senior Secured Notes will be determined pursuant to the OID rules, and a holder will be required to include OID in gross income as it accrues, possibly in advance of the receipt of cash, regardless of whether such holder uses the accrual method of accounting.

Under the OID rules, a Senior Noteholder generally will be required to include OID at the applicable stated rate of interest on the New Senior Secured Notes. A payment of interest in the form of additional New Senior Secured Notes will not be treated as a separate payment of interest, but the applicable stated interest on such additional New Senior Secured Notes would be includible OID. If GSI pays cash interest on the New Senior Secured Notes, a holder will not adjust its OID inclusions. Each payment of cash under the New Senior Secured Notes will be treated first as a payment of any accrued OID that has not been allocated to prior payments and

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second as a payment of principal (which is not includable in income). A holder generally will not be required to include separately in income cash payments received on the New Senior Secured Notes to the extent such payments constitute payments of previously accrued OID.

Further, if the issue price of the New Senior Secured Notes is less than the principal amount of such notes, holders may be required to include additional OID. The issue price of the New Senior Secured Notes depends on whether a substantial amount of such notes is considered to be “traded on an established market” within the meaning of the applicable Treasury Regulations. If a substantial amount of the New Senior Secured Notes is considered to be traded on an established market, the issue price of such notes will be their trading price on the issue date. If it is not the case that a substantial amount of the New Senior Secured Notes is considered to be traded on an established market, but a substantial amount of the Senior Notes is considered to be so traded, the fair market value of the Senior Notes on the date of the exchange will be the issue price of the New Senior Secured Notes. If neither the New Senior Secured Notes nor the Senior Notes are considered to be traded on an established market, the issue price of the New Senior Secured Notes will be equal to their stated principal amount. The method for accruing such additional OID, if any, will be based on the “constant yield method” by reference to a hypothetical fixed rate debt instrument, based on LIBOR plus a margin as of the issue date.

C. Holdings Shareholders Resident in United States

The exchange by U.S. shareholders of the Holdings Common Shares for New Common Shares and New Warrants should be a tax-free reorganization for U.S. federal income tax purposes. Accordingly, a U.S. Shareholder generally should not recognize gain or loss on the receipt of such consideration in exchange for the Holdings Common Shares. However, sections 367(a) and (b) of the Internal Revenue Code can override the general non-recognition rule in certain circumstances and require gain recognition.

Generally, section 367(a) requires recognition of gain on transfers of property to foreign corporations. Section 367(a) does not apply to (i) a section 368(a)(1)(E) reorganization or (ii) any section 354 exchange of stock or securities of a foreign corporation under a section 368(a)(1) asset reorganization, unless the exchange is considered an indirect stock transfer under the Treasury Regulations promulgated under section 367(a). Based on the aforementioned exceptions, section 367(a) should not require the recognition of gain on the exchange by U.S. Shareholders of the Holdings Common Shares for New Common Shares and New Warrants because the transaction should be properly characterized as a direct section 368(a)(1) asset reorganization (and/or a section 368(a)(1)(E) reorganization).

Section 367(b) requires exchanging shareholders of a controlled foreign corporation to include certain amounts in gross income as a deemed dividend. Additionally, the Treasury Regulations promulgated under section 367(b) impose certain reporting requirements on transactions in which section 367(b) applies. Holdings anticipates that it should not convert into a controlled foreign corporation as a result of the Plan and, if this is the case, then section 367(b) would not apply.

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If the exchange is tax-free, a U.S. shareholder’s aggregate initial tax basis in the New Common Shares and the New Warrants received in the exchange generally should be the same as such U.S. shareholder’s aggregate tax basis in the Holdings Common Shares exchanged for such consideration (allocated pro rata among the various types of consideration based on the relative fair market value of the property). Any such basis would be increased by any gain recognized in the exchange. A U.S. shareholder’s adjusted tax basis in the Holdings Common Shares generally will be the price paid for the Holdings Common Shares.

D. Backup Withholding

Under certain circumstances a Noteholder may be subject to backup withholding at the rate of 28% with respect to “reportable payments.” The payor will be required to deduct and withhold the prescribed amount if (a) the Noteholder fails to furnish a taxpayer identification number to the payor in the manner required, (b) the IRS notifies the payor that the taxpayer identification number furnished by the Noteholder is incorrect, (c) there has been a failure of the Noteholder to certify under penalty of perjury that the Noteholder is not subject to withholding or (d) the Noteholder is notified by the IRS that such Noteholder failed to report properly payments of interest and dividends and the IRS has notified the payor that such Noteholder is subject to backup withholding.

Backup withholding is not an additional tax. Any amount withheld from a payment to a Noteholder under the backup withholding rules is allowable as a credit against such holder’s U.S. federal income tax liability (and may entitle such Noteholder to a refund), provided that the required information is furnished to the IRS on a timely basis. Certain persons are exempt from backup withholding, including corporations and financial institutions. Noteholders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining such exemption.

XII. CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

The following summary fairly describes certain Canadian federal income tax considerations relating to the Plan in respect of shareholders of Holdings who, for the purposes of the Income Tax Act (Canada) (the “ITA”): (i) hold their shares as capital property; (ii) deal at arm’s length with Holdings; (iii) are not affiliated with Holdings, and (iv) in respect of whom Holding is not a foreign affiliate within the meaning of the ITA, or who hold more than 10% of the New Common Shares. A shareholder will generally be considered to hold shares as capital property, unless the shareholder holds the shares in the course of carrying on a business, acquired the shares in a transaction that is an adventure in the nature of trade, or holds the shares as “mark-to-market” property for the purposes of the ITA. Shareholders should consult their own tax advisors if they have questions as to whether they in fact hold the shares as capital property. Moreover, shareholders who do not hold the shares as capital property should consult their own tax advisors regarding the consequences of the Plan.

This summary is not applicable to a shareholder: (i) that is a “financial institution” for the purposes of the mark-to-market rules contained in the ITA; (ii) that is a “specified financial institution” or “restricted financial institution” as defined in the ITA; (iii) an interest in which is a “tax shelter investment” as defined under the ITA, or (iv) to whom the functional currency reporting rules in subsection 261 of the ITA would apply. Such shareholders should consult their own tax advisors.

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This summary is based upon the current provisions of the ITA, the regulations thereunder (the “Regulations”), the Canada-United States Income Tax Convention, 1980, as amended (the “Tax Treaty”), and counsel’s understanding of the current administrative practices and policies of the Canada Revenue Agency (the “CRA”). This summary also takes into account all specific proposals to amend the ITA and the Regulations (the “Proposed Amendments”) announced by the Minister of Finance (Canada) prior to the date hereof and assumes that all Proposed Amendments will be enacted in their current form. However, there can be no assurance that the Proposed Amendments will be enacted in the form proposed or at all. Except for the Proposed Amendments, this summary does not take into account or anticipate any changes in law, whether by legislative, governmental or judicial action or decision, nor does it take into account provincial, territorial or foreign income tax considerations, which may differ from the Canadian federal income tax considerations discussed below. An advance income tax ruling will not be sought from the CRA in respect of the Exchange.

Although portions of this summary of “Canadian Tax Considerations” that are applicable to shareholders considered to be resident of the United States for purposes of the Tax Treaty (the “US resident shareholders”) may also apply to shareholders residing in other jurisdictions, this summary does not specifically address the tax consequences to such other shareholders and accordingly such other shareholders are urged to contact their own tax advisors to determine the particular tax consequences applicable to them.

The following summary is based on the facts set out in this Disclosure Statement and on additional information provided to Canadian tax counsel by management of Holdings.

This summary is of a general nature only and is not exhaustive of all possible Canadian federal income tax considerations. This summary is not intended to be, nor should it be construed to be, legal or tax advice to any shareholder. Accordingly, shareholders should consult their own tax advisers for advice as to the income tax consequences having regard to their own particular circumstances.

A. Tax Consequences Applicable to Holdings

The issuance of the New Common Shares to the holders of the Senior Note Claims in partial satisfaction of the Senior Note Claims should not give rise to any tax payable by Holdings. Provided that no holder of Senior Note Claims is non-arm’s length to Holdings (as such term is used in the ITA) and there is not a group of holders of Senior Note Claims who act in concert and who would, following the issuance, hold a majority of the New Common Shares, the issuance of the New Common Shares to the holders of the Senior Note Claims will generally not trigger an acquisition of control for purposes of Canadian tax law. An acquisition of control would result in a tax year end for Holdings. In addition, an acquisition of control could limit Holdings’ Canadian NOLs in the years following the ownership change and, therefore, could increase its income for tax purposes. However, the Canadian tax rules provide that on an acquisition of control, Holdings’ losses could be used to offset future income in Holdings provided the business in which the losses arose continues after the acquisition of control with a reasonable expectation of profit in which case the losses can be set off against income from the business in which the losses arose or a similar business.

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The transfer of the GSI UK Shares by Holdings to GSI Holdings should not give rise to any tax payable by Holdings and the transfer from GSI Holdings to GSI Holdings II should not give rise to any tax payable by GSI Holdings provided that Holdings and GSI Holdings (in respect of the first transfer) and GSI Holdings and GSI Holdings II (in respect of the second transfer) jointly elect pursuant to section 85 of the ITA to have each of the respective transfers take place at an amount equal to the adjusted cost base to Holdings of the GSI UK Shares, or the fair market value of such stock, whichever is lower. In such event, (i) the proceeds of disposition of the GSI UK Shares to Holdings or GSI Holdings, as applicable, and (ii) the cost amount of the GSI UK Shares to GSI Holdings or GSI Holdings II, as applicable, shall be deemed to be the amount so elected for the purposes of section 85 of the ITA, namely such adjusted cost base or fair market value, and Holdings or GSI Holdings, as applicable, shall not realize a gain on the transfer of the GSI UK Shares. The transfer will be eligible for election pursuant to section 85 of the ITA provided that Holdings or GSI Holdings, as applicable, holds the GSI UK Shares as capital property. To the extent that the adjusted cost base to Holdings of the GSI UK Shares exceeds the fair market value of such shares, any loss otherwise realizable by Holdings as a result of the transfer to GSI Holdings shall be deemed to be nil at the time of the transfer, and shall be realized by Holdings at such time as the GSI UK Shares are no longer held by Holdings or any affiliate of Holdings.

Provided that the value of the portion of the GSI UK Note Claim against Holdings that is satisfied by the issuance of the New Common Shares to GSI UK is equal to or exceeds the value of such New Common Shares issued to GSI UK, the issuance of such shares will not give rise to any tax consequences to Holdings. In the event that the value of such Claim to Holdings is less than the value of the New Common Shares issued to GSI UK, GSI UK may be subject to a deemed dividend under Section 214(3) of the ITA and Holdings would be subject to withholding tax obligations. Section 214(3) may deem GSI UK to receive from Holdings a dividend equal to the excess of the value of the New Common Shares over the consideration transferred by GSI UK on the issuance of the New Common Shares. The ITA provides that the withholding rate on dividends is 25%, subject to the terms of any applicable tax treaty. Provided that GSI UK is a resident of the U.K. for purposes of the tax convention between Canada and the United Kingdom, the rate of withholding will be reduced to 15%, or 10% in the event that GSI UK holds more than 10% of the voting stock of Holdings following the issuance.

The contribution of the Intercompany Note by Holdings to GSI will not give rise to any tax payable by Holdings in respect of the principal amount of the Claim, however, to the extent that the Intercompany Note has accrued and unpaid interest that is satisfied by the contribution, Holdings will be deemed to have earned such interest income in the year. The contribution will result in the disposition of the Intercompany Note by Holdings and an increase in the value of the common stock held by Holdings in GSI as a result of the elimination of GSI’s obligation to satisfy the Intercompany Note. The disposition of the Intercompany Note may give rise to a capital loss to Holdings to the extent that the increase in the value of the common stock is less than the face amount of the Intercompany Note, together with accrued interest (if any). Holdings will generally be able to claim the resulting capital loss provided that the Intercompany Note was acquired by Holdings for the purpose of gaining or producing income.

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B. Shareholders Resident in Canada

The following portion of this summary of “Canadian Tax Considerations” applies to Holdings’ shareholders who are resident in Canada for the purposes of the ITA. Holdings’ shareholders will likely be considered to have disposed of their shares by reason of the cancellation of all Allowed Holdings Equity Interests (the “Cancellation”). The issuance of New Common Shares and New Warrants after the Cancellation may trigger a taxable event for shareholders.

If the fair market value of the New Warrants exceeds the paid-up capital (as defined under the ITA) of the Holdings Common Shares, the shareholder will realize a deemed dividend equal to the difference between the value of the New Warrants and the paid-up capital of the Holdings Common Shares (the “Deemed Dividend”). The Deemed Dividend must be included in computing the shareholder’s taxable income for the year.

If the fair market value of the New Warrants received by a shareholder exceeds the adjusted cost base to the shareholder of the Holdings Common Shares, the shareholder will realize a capital gain (or capital loss) equal to the amount by which the fair market value of the New Warrants exceeds (or is less than) the sum of the Deemed Dividend and the adjusted cost base of the Holdings Common Shares. One-half of any capital gain will be the shareholder’s taxable capital gain and one-half of any capital loss will be the shareholder’s allowable capital loss. Taxable capital gains must be included in computing the holder’s income. Allowable capital losses may normally be applied to offset any taxable capital gains in the current year, the three preceding years or any future years (subject to and in accordance with rules contained in the ITA).

If the fair market value of the New Common Shares and the New Warrants exceeds the fair market value of the Holdings Common Shares, the shareholder may realize a shareholder benefit equal to the difference. The shareholder benefit must be included in computing the shareholder’s taxable income for the year.

Provided that the value of the New Warrants is less than both the paid-up capital of the Holdings Common Shares and the adjusted cost base of the shareholder in the Holdings Common Shares, the shareholder will not realize either a capital gain or a capital loss on the disposition of the Holdings Common Shares by virtue of the application of section 86 of the ITA. In such case, the cost to the shareholder of the New Common Shares will be equal to the amount, if any, by which the adjusted cost base of the Holdings Common Shares exceeds the fair market value of the New Warrants.

C. Shareholders Resident in United States

The following portion of this summary of “Canadian Tax Considerations” applies to Holdings’ shareholders who are non-residents of Canada and resident of the United States for the purposes of the ITA. As described above, Holdings’ shareholders will likely be considered to have disposed of their shares by reason of the Cancellation. The issuance of New Common Shares and New Warrants may trigger a taxable event for shareholders.

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If a shareholder who is a non-resident of Canada realizes a Deemed Dividend, Canadian withholding tax at a rate of 25% (subject to reduction under the provisions of any applicable income tax treaty or convention) will be payable on the Deemed Dividend. The rate of withholding tax applicable to a Deemed Dividend paid to a shareholder who is a resident of the U.S. for purposes of the Tax Treaty, and qualifies for the benefits of the Tax Treaty will generally be reduced to 15%, or, if the non-resident shareholder is a corporation that owns at least 10% of the voting stock of Holdings, to 5%. Not all persons who are resident of the U.S. for purposes of the Tax Treaty will qualify for benefits of the Tax Treaty.

A shareholder who is a non-resident of Canada will generally be subject to tax under the ITA in respect of any capital gain realized on the transaction only if the Holdings Common Shares constitute ‘taxable Canadian property’ to the non-resident for purposes of the ITA, and the gain is not exempt from tax pursuant to the terms of the Tax Treaty. The Holdings Common Shares are not presently listed on a designated stock exchange and therefore the Holdings Common Shares generally will constitute taxable Canadian property of a non-resident shareholder. Any capital gain realized by a non-resident shareholder may not be subject to tax under the ITA if such capital gain is exempt from Canadian tax pursuant to the Tax Treaty. If a non-resident shareholder to whom Holdings Common Shares are taxable Canadian property is not exempt from tax under the ITA by virtue of the Tax Treaty, the consequences described under “Shareholders Resident in Canada” will generally apply. A shareholder who is a non-resident of Canada is required to file an income tax return in Canada for the year in which such non-resident shareholder disposes of taxable Canadian property.

If the Holdings Common Shares are ‘taxable Canadian property’ to the non-resident shareholder, regardless of whether the capital gain is subject to tax pursuant to the ITA, the non-resident shareholder will have to comply with the administrative provisions of section 116 of the ITA which may result in 25% of the fair market value of the New Common Shares and New Warrants being withheld and remitted to the CRA pending the receipt of a certificate issued by the CRA pursuant to section 116 of the ITA confirming that either no tax is payable or that any tax payable has been received by the CRA.

XIII.  ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN

The Debtors have evaluated numerous alternatives to the Plan, including, without limitation, the sale of the Debtors as a going concern, either as an entirety or on limited bases and the liquidation of the Debtors. After studying these alternatives, the Debtors have concluded that the Plan is the best alternative and will maximize recoveries of holders of Claims and Equity Interests. The following discussion provides a summary of the analysis of the Debtors supporting their conclusion that a liquidation of the Debtors or an alternative plan of reorganization for the Debtors will not provide higher value to holders of Claims and Equity Interests.

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A. Liquidation Under Chapter 7 of the Bankruptcy Code.

If no plan of reorganization can be confirmed, the Chapter 11 Cases of the Debtors may be converted to cases under chapter 7, in which event a trustee would be elected or appointed to liquidate the properties and interests in property of the Debtors for distribution to their creditors in accordance with the priorities established by the Bankruptcy Code. The Debtors believe that liquidation under chapter 7 would result in smaller distributions being made to creditors than those provided for under the Plan because of (1) the increased costs and expenses of a liquidation under chapter 7 arising from fees payable to a trustee for bankruptcy and professional advisors to such trustee; (2) the erosion in value of assets in the context of the expeditious liquidation required under chapter 7 and the “forced sale” environment in which such a liquidation would likely occur; (3) the adverse effects on the salability of business segments as a result of the likely departure of key employees and the loss of customers; and (4) the substantial increases in claims which would have to be satisfied on a priority basis or on parity with creditors in the Chapter 11 Cases. Accordingly, the Debtors believe that confirmation of the Plan will provide each holder of a Claim or Equity Interest with a greater recovery than it would receive pursuant to liquidation of the Debtors under chapter 7.

A discussion of the effects that a chapter 7 liquidation would have on the holders of Claims and Equity Interests is set out in the Liquidation Analysis, attached as Exhibit “D” hereto.

B. Alternative Plans of Reorganization.

If the Plan is not confirmed, any other party in interest could undertake to formulate a different plan of reorganization. Such a plan of reorganization might involve either a reorganization and continuation of the business of the Debtors, the sale of the Debtors as a going concern or an orderly liquidation of the properties and interests in property of the Debtors. With respect to an alternative plan of reorganization, the Debtors have examined various other alternatives in connection with the process involved in the formulation and development of the Plan. The Debtors believe that the Plan, as described herein, enables holders of Claims and Equity Interests to realize the best recoveries under the present circumstances. In a liquidation of the Debtors under chapter 11, the properties and interests in property would be sold in a more orderly fashion and over a more extended period of time than in a liquidation under chapter 7, probably resulting in marginally greater recoveries. Further, if a trustee were not appointed, since one is not required in a chapter 11 case, the expenses for professional fees would most likely be lower than in a chapter 7 case. However, although preferable to a chapter 7 liquidation, the Debtors believe that a liquidation under chapter 11 for the Debtors is a much less attractive alternative because the recovery realized by holders of Claims and Equity Interests under the Plan is likely to be greater than their recovery under a chapter 11 liquidation.

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XIV. CONCLUSION

The Debtors believe that the Plan is in the best interest of all holders of Claims and Equity Interests, and urge all holders of impaired Claims against and Equity Interests in the Debtors to vote to accept the Plan and to evidence such acceptance by returning their ballots in accordance with the instructions accompanying the Disclosure Statement.

Dated: January 8, 2010

Respectfully submitted,
GSI Group Inc.
By:
Name:	Sergio Edelstein
Title:	President and Chief Executive Officer

GSI Group Corporation
By:
Name:	Sergio Edelstein
Title:	President and Chief Executive Officer

MES International, Inc.
By:
Name:	Sergio Edelstein
Title:	President and Chief Executive Officer

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Schedule 1

List of Defined Terms

1.	“2008 Q3 Report”	has the meaning ascribed to it in Article IV.D.1. of the Disclosure Statement.
2.	“Administrative Claim”	has the meaning ascribed to it in the Plan.
3.	“Affiliate”	has the meaning ascribed to it in the Plan.
4.	“Allowed”	has the meaning ascribed to it in the Plan.
5.	“Allowed New Securities”	has the meaning ascribed to it in Article VII.D.1. of the Disclosure Statement.
6	“AMT”	has the meaning ascribed to it XI.A.5. of the Disclosure Statement.
7.	“ARS”	has the meaning ascribed to it in Exhibit C of the Disclosure Statement.
8.	“Assets”	has the meaning ascribed to it in the Plan.
9.	“Assumption Order”	has the meaning ascribed to it in Article XI.D. of the Disclosure Statement
10.	“Audit Committee”	has the meaning ascribed to it in Article IV.D.1. of the Disclosure Statement.
11.	“Avoidance Actions”	has the meaning ascribed to it in the Plan.
12.	“Bankruptcy Code”	has the meaning ascribed to it in the Plan.
13.	“Bankruptcy Court”	has the meaning ascribed to it in the Plan.
14.	“Bankruptcy Rules”	has the meaning ascribed to it in the Plan.
15.	“Bar Date”	has the meaning ascribed to it in Article VI.F.1. of the Disclosure Statement.
16.	“Bar Date Notice”	has the meaning ascribed to it in the Plan.
17.	“Bar Date Order”	has the meaning ascribed to it in the Plan.

97

18.	“BR”	has the meaning ascribed to it in Article VI.C. of the Disclosure Statement.
19.	“Built-In Thresholds”	has the meaning ascribed to it in Article XI.A.3. of the Disclosure Statement.
20.	“Business Day”	has the meaning ascribed to it in the Plan.
21.	“Cancellation”	has the meaning ascribed to it in Article XII.B. of the Disclosure Statement.
22.	“Cash”	has the meaning ascribed to it in the Plan.
23.	“Cash Management Motion”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
24.	“Cash Note Payment”	has the meaning ascribed to it in the Plan.
25.	“Causes of Action”	has the meaning ascribed to it in the Plan.
26.	“CERT”	has the meaning ascribed to it in Article XI.A.6. of the Disclosure Statement.
27.	“CERT Loss”	has the meaning ascribed to it in Article XI.A.6. the Disclosure Statement.
28.	“Chapter 11 Cases”	has the meaning ascribed to it in the Plan.
29.	“Claim”	has the meaning ascribed to it in the Plan.
30.	“Claim Contribution”	has the meaning ascribed to it in Article XI.A.3. the Disclosure Statement.
31.	“Claims Agent”	has the meaning ascribed to it in the Plan.
32.	“Class Period”	has the meaning ascribed to it in Article IV.D.2. of the Disclosure Statement.
33.	“COD”	has the meaning ascribed to it in Article XI.A.1. the Disclosure Statement.
34.	“Committee”	has the meaning ascribed to it in the Plan.
35.	“Company”	has the meaning ascribed to it in Article IV.A. the Disclosure Statement.
36.	“Confirmation Date”	has the meaning ascribed to it in the Plan.

98

37.	“Confirmation Hearing”	has the meaning ascribed to it in the Plan.
38.	“Confirmation Order”	has the meaning ascribed to it in the Plan.
39.	Consenting Noteholders	has the meaning ascribed to it in the Introduction of the Disclosure Statement.
40.	“Contested”	has the meaning ascribed to it in the Plan.
41.	“Continued Cash Management Program”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
42.	“Continued Employee Programs”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
43.	“CRA”	has the meaning ascribed to it in Article XII of the Disclosure Statement.
44.	“CRG”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
45.	“Critical Vendor Claims”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
46.	“Debtor” or “Debtors”	has the meaning ascribed to it in the Introduction of the Disclosure Statement.
47.	“Deemed Dividend”	has the meaning ascribed to it in Article XII.B. of the Disclosure Statement.
48.	“Deemed Exchange”	has the meaning ascribed to it in Article XI.A.1. of the Disclosure Statement.
49.	“Disallowed”	has the meaning ascribed to it in the Plan.
50.	“Disbursing Agent”	has the meaning ascribed to it in the Plan.
51.	“Disclosure Statement Order”	has the meaning ascribed to it in the Plan.
52.	“Disclosure Statement”	has the meaning ascribed to it in the Plan.
53.	“District Court”	has the meaning ascribed to it in Article IV.D.2. of the Disclosure Statement.
54.	“Effective Date”	has the meaning ascribed to it in the Plan.
55.	“Equity Interest”	has the meaning ascribed to it in the Plan.

99

56.	“Employee Wage Motion”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
57.	“Equity Committee”	has the meaning ascribed to it in the Introduction section of the Disclosure Statement.
58.	“Estate”	has the meaning ascribed to it in the Plan.
59.	“Excel”	has the meaning ascribed to it in Article IV.B.1. of the Disclosure Statement.
60.	“Exchange”	has the meaning ascribed to it on in Article XI.A.1.of the Disclosure Statement.
61.	“Exchange Act”	has the meaning ascribed to it in the Plan.
62.	“E&Y”	has the meaning ascribed to it in Article IV.D.1. of the Disclosure Statement.
63.	“Face Amount Minimum”	has the meaning ascribed to it in the Plan.
64.	“Fee Application”	has the meaning ascribed to it in the Plan.
65.	“Fee Claim”	has the meaning ascribed to it in the Plan.
66.	“Filing Period”	has the meaning ascribed to it in Article II.A. of the Disclosure Statement.
67.	“Final Order”	has the meaning ascribed to it in the Plan.
68.	“Garden City”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
69.	“General Scanning”	has the meaning ascribed to it in Article IV.B.1. of the Disclosure Statement.
70.	“General Unsecured Claims”	has the meaning ascribed to it in the Plan.
71.	“GSI”	has the meaning ascribed to it in the Plan.
72.	“GSI Limited Holdings”	has the meaning ascribed to it in the Plan.
73.	“GSI Limited Holdings II”	has the meaning ascribed to it in the Plan.
74.	“GSI UK”	has the meaning ascribed to it in the Plan.

100

75.	“GSI UK Note”	has the meaning ascribed to it in the Plan.
76.	“GSI UK Shares”	has the meaning ascribed to it in the Plan.
77.	“Guarantee Claims”	has the meaning ascribed to it in the Plan.
78.	“Guarantor Debtor”	has the meaning ascribed to it in the Plan.
79.	“Holdings Common Shares”	has the meaning ascribed to it in the Plan.
80.	“Holdings Equity Interest”	has the meaning ascribed to it in the Plan.
81.	“Holdings”	has the meaning ascribed to it in the Plan.
82.	“Implementation Order”	has the meaning ascribed to it in the Plan.
83.	“Indenture Trustee”	has the meaning ascribed to it in the Plan.
84.	“Insured Claim”	has the meaning ascribed to it in the Plan.
85.	“Integral Multiples”	has the meaning ascribed to it in the Plan.
86.	“Intercompany Claim”	has the meaning ascribed to it in the Plan.
87.	“Intercompany Note”	has the meaning ascribed to it in Article XI.A.2. of the Disclosure Statement.
88.	“Internal Revenue Code”	has the meaning ascribed to it in the Plan.
89.	“IRS”	has the meaning ascribed to it in the Plan.
90.	“ITA”	has the meaning ascribed to it in Article XII. of the Disclosure Statement.
91.	“Lead Plaintiff”	has the meaning ascribed to it in Article IV.D.2. of the Disclosure Statement.
92.	“LIBOR”	shall mean London Interbank Offered Rate.
93.	“Liquidation Analysis”	has the meaning ascribed to it in Article VIII.C. of the Disclosure Statement.
94.	“Listing Council”	has the meaning ascribed to it in Article IV.D.2. of the Disclosure Statement.

101

95.	“Management Incentive Plan”	has the meaning ascribed to it in the Plan.
96.	“MES”	has the meaning ascribed to it in Article IV.A. of the Disclosure Statement.
97.	“Nasdaq”	has the meaning ascribed to it in Article IV.D.2. of the Disclosure Statement.
98.	“Nasdaq Board”	has the meaning ascribed to it in Article IV.D.2. of the Disclosure Statement.
99.	“New Common Shares”	has the meaning ascribed to it in the Plan.
100.	“New Indenture”	has the meaning ascribed to it in the Plan.
101.	“New Senior Secured Notes”	has the meaning ascribed to it in the Plan.
102.	“New Warrants”	has the meaning ascribed to it in the Plan.
103.	“NOL”	shall mean net operating loss.
104.	“Note Claims”	has the meaning ascribed to it in the Plan.
105.	“Noteholders”	has the meaning ascribed to it in the Plan.
106.	“Notice of Confirmation”	has the meaning ascribed to it in the Plan.
107.	“NUBIL”	has the meaning ascribed to it in Article XI.A.2. of the Disclosure Statement.
108.	“NUBIG”	has the meaning ascribed to it in Article XI.A.2. of the Disclosure Statement.
109.	“Objection Deadline”	has the meaning ascribed to it in the Plan.
110.	“Obligor Debtor”	has the meaning ascribed to it in the Plan.
111.	“OID”	has the meaning ascribed to it in Article XI.B.2. of the Disclosure Statement.
112.	“Opex”	has the meaning ascribed to it in Exhibit C of the Disclosure Statement.
113.	“Ordinary Course Professionals”	has the meaning ascribed to it in Article VI.C. of the Disclosure Statement.

102

114.	“Outstanding Capital Stock of Reorganized Holdings”	has the meaning ascribed to it in the Plan.
115.	“Panel”	has the meaning ascribed to it in Article IV.D.2. of the Disclosure Statement.
116.	“Person”	has the meaning ascribed to it in the Plan.
117.	“Petition Date”	has the meaning ascribed to it in the Plan.
118.	“PIK”	shall mean payment in kind.
119.	“Plan Distribution Date”	has the meaning ascribed to it in the Plan.
120.	“Plan Distribution”	has the meaning ascribed to it in the Plan.
121.	“Plan Documents”	has the meaning ascribed to it in the Plan.
122.	“Plan Securities”	has the meaning ascribed to it in Article VII.C. of the Disclosure Statement.
123.	“Plan Supplement”	has the meaning ascribed to it in the Plan.
124.	“Plan Support Agreement”	has the meaning ascribed to it in the Plan.
125.	“Plan”	has the meaning ascribed to it in the Introduction in the Disclosure Statement.
126.	“Post-Confirmation Interest”	has the meaning ascribed to it in the Plan.
127.	“Post-Effective Date Fully Diluted Capital Stock of Reorganized Holdings”	has the meaning ascribed to it in the Plan.
128.	“Post-Petition Interest”	has the meaning ascribed to it in the Plan.
129.	“Priority Claim”	has the meaning ascribed to it in the Plan.
130.	“Pro Rata Share”	has the meaning ascribed to it in the Plan.
131.	“Professional Person”	has the meaning ascribed to it in the Plan.
132.	“Professionals”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.

103

133.	“Projections”	has the meaning ascribed to it in Article V.B.1. of the Disclosure Statement. The Projections are attached as Exhibit “C” to the Disclosure Statement.
134.	“Proposed Amendments”	has the meaning ascribed to it in Article XII of the Disclosure Statement.
135.	“Putative Class”	has the meaning ascribed to it in Article IV.D.2. of the Disclosure Statement.
136.	“Registration Rights Agreement”	has the meaning ascribed to it in the Plan.
137.	“Regulations”	has the meaning ascribed to it in Article XII of the Disclosure Statement.
138.	“Released Parties”	has the meaning ascribed to it in the Plan.
139.	“Reorganized Company”	has the meaning ascribed to it in Article V.B.1. of the Disclosure Statement.
140.	“Reorganized GSI Entities”	has the meaning ascribed to it in the Plan.
141.	“Reorganized GSI”	has the meaning ascribed to it in the Plan.
142.	“Reorganized Holdings”	has the meaning ascribed to it in the Plan.
143.	“Reorganized Holdings Constituent Documents”	has the meaning ascribed to it in the Plan.
144.	“Reorganized MES”	has the meaning ascribed to it in the Plan.
145.	“Restatements”	has the meaning ascribed to it in Exhibit C of the Disclosure Statement.
146.	“Required Noteholders”	has the meaning ascribed to it in the Plan.
147.	“Rights”	has the meaning ascribed to it in the Plan.
148.	“Rule”	has the meaning ascribed to it in Article IV.D.2. of the Disclosure Statement.
149.	“SE”	has the meaning ascribed to it in Article VI.C. of the Disclosure Statement.
150.	“SEC”	means the Securities and Exchange Commission.

104

151.	“Schedules”	has the meaning ascribed to it in the Plan.
152.	“Secured Claim”	has the meaning ascribed to it in the Plan.
153.	“Securities Act”	has the meaning ascribed to it in the Plan.
154.	“Securities Class Action”	has the meaning ascribed to it in Article IV.D.2. of the Disclosure Statement.
155.	“Security Documents”	has the meaning ascribed to it in the Plan.
156.	“Senior Note Claim”	has the meaning ascribed to it in the Plan.
157.	“Senior Noteholder(s)”	has the meaning ascribed to it in Article XI of the Disclosure Statement.
158.	“Senior Notes”	has the meaning ascribed to it in the Plan.
159.	“Senior Notes Indenture”	has the meaning ascribed to it in the Plan.
160.	“Solicitation Agent”	has the meaning ascribed to it in Article I of the Disclosure Statement.
161.	“Solicitation Period”	has the meaning ascribed to it in Article II.A. of the Disclosure Statement.
162.	“Subordinated Claim”	has the meaning ascribed to it in the Plan.
163.	“Subsidiary”	has the meaning ascribed to it in the Plan.
164.	“Substantial Shareholder”	has the meaning ascribed to it in Article VI.G. of the Disclosure Statement.
165.	“Tax Claim”	has the meaning ascribed to it in the Plan.
166.	“Tax Treaty”	has the meaning ascribed to it in Article XII of the Disclosure Statement.
167.	“Taxes”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
168.	“Taxing Authorities”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
169.	“Treasury Regulations”	shall mean the United States Treasury Regulations promulgated under the Internal Revenue Code of 1986, as amended.

105

170.	“US resident shareholders”	has the meaning ascribed to it in Article XII of the Disclosure Statement.
171.	“U.S. Shareholders”	has the meaning ascribed to it in Article XI of the Disclosure Statement.
172.	“Utility Companies”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
173.	“Utility Services”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
174.	“Voting Deadline”	means the deadline for voting on the Plan, as established by order of the Bankruptcy Court.
175.	“Voting Record Date”	has the meaning ascribed to it in the Plan.
176.	“Warranties”	has the meaning ascribed to it in Article VI.B.1. of the Disclosure Statement.
177.	“WSGR”	has the meaning ascribed to it in Article VI.C. of the Disclosure Statement.

106

EXHIBIT “A”

First Modified Joint Chapter 11 Plan of Reorganization for the Debtors

EXHIBIT “B”

Disclosure Statement Order

EXHIBIT “C”

Projections

EXHIBIT “D”

Liquidation Analysis

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:   MES INTERNATIONAL, INC., et al., ¹   Debtors.                                        )
) ) ) ) ) ) ) Chapter 11   Case No. 09-14109 (PJW)   Jointly Administered

FIRST MODIFIED JOINT CHAPTER 11 PLAN OF REORGANIZATION

FOR MES INTERNATIONAL, INC., GSI GROUP INC. AND

GSI GROUP CORPORATION

Dated: January 6, 2010	BROWN RUDNICK LLP
	Co-Counsel to Debtors-in-Possession
	William R. Baldiga, Esq.
	One Financial Center
	Boston, Massachusetts 02111
	Tel: (617) 856-8200
	Fax: (617) 856-8201
	SAUL EWING LLP
	Co-Counsel to Debtors-in-Possession
	Mark Minuti, Esq.
	222 Delaware Avenue, Suite 1200
	P. O. Box 1266
	Wilmington, DE 19899
	(302) 421-6840 (office)
	(302) 421-5873 (fax)

¹ The Debtors and the last four digits of their respective taxpayer identification numbers are as follows:

MES International, Inc. (1964); GSI Group Inc. (0412); and GSI Group Corporation (9358). The Debtors’ headquarters is located at 125 Middlesex Turnpike, Bedford, MA 01730.

TABLE OF CONTENTS

		Page
ARTICLE I. DEFINITIONS AND INTERPRETATION		1
1.1.	Definitions	1
1.2.	Interpretation	1
1.3.	Application of Definitions and Rules of Construction Contained in the Bankruptcy Code	1
1.4.	Other Terms	1
1.5.	Appendices and Plan Documents	1
ARTICLE II. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS		2
2.1.	Administrative Claims and Tax Claims	2
2.2.	Claims and Equity Interests	2
2.3.	Elimination of Classes	3
2.4.	Impairment Controversies	3
ARTICLE III. PROVISIONS FOR TREATMENT OF CLAIMS AND EQUITY INTERESTS UNDER THE PLAN		3
3.1.	Classes 1A, 1B and 1C (collectively “Class 1”) – Priority Claims	3
3.2.	Classes 2A, 2B and 2C (collectively “Class 2”) – Secured Claims	4
3.3.	Classes 3A, 3B and 3C (collectively “Class 3”) – General Unsecured Claims	4
3.4.	Classes 4A, 4B and 4C (collectively “Class 4”) – Intercompany Claims	4
3.5.	Classes 5A, and 5B (collectively “Class 5”) – Note Claims	5
3.6.	Class 6A – Holdings Equity Interest	5
3.7.	Class 6B – GSI Equity Interests	6
3.8.	Class 6C – MES Equity Interests	6
ARTICLE IV. PROVISIONS FOR TREATMENT OF UNCLASSIFIED CLAIMS UNDER THE PLAN		6
4.1.	Unclassified Claims	6
4.2.	Treatment of Administrative Claims	6
4.3.	Treatment of Tax Claims	7
ARTICLE V. ACCEPTANCE OR REJECTION OF THE PLAN; EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS OR EQUITY INTERESTS		8
5.1.	Classes Entitled to Vote	8
5.2.	Class Acceptance Requirement	8
5.3.	Cramdown	8
5.4.	Confirmation in All Cases	8
ARTICLE VI. MEANS FOR IMPLEMENTATION OF THE PLAN		9
6.1.	Operations between the Confirmation Date and the Effective Date	9
6.2.	Reporting Requirements Under Exchange Act, Listing on Securities Exchange and Registration Rights	9

6.3.	Reorganized Holdings Constituent Documents	9
6.4.	New Corporate Structure for Reorganized Holdings	9
6.5.	Cancellation of Holdings Equity Interests, Rights, GSI UK Note and Senior Notes	10
6.6.	New Common Shares and New Warrants	10
6.7.	New Senior Secured Notes	11
6.8.	Other General Corporate Matters	11
6.9.	Continued Corporate Existence of the Debtors	12
6.10.	Re-vesting of Assets	12
6.11.	Management	12
6.12.	Boards of Directors	12
6.13.	Officers	13
6.14.	Management Incentive Plan	13
6.15.	Causes of Action	13
6.16.	Appointment of the Disbursing Agent	14
6.17.	Sources of Cash for Plan Distributions	14
6.18.	Releases by the Debtors	14
6.19.	Releases by Creditors and Equity Security Holders	14
6.20.	Fixing of Principal Balance of GSI UK Note	15
ARTICLE VII. PLAN DISTRIBUTION PROVISIONS		15
7.1.	Plan Distributions	15
7.2.	Timing of Plan Distributions	15
7.3.	Address for Delivery of Plan Distributions/Unclaimed Plan Distributions	16
7.4.	De Minimis Plan Distributions	16
7.5.	Time Bar to Cash Payments	16
7.6.	Manner of Payment under the Plan	16
7.7.	Expenses Incurred on or after the Effective Date and Claims of the Disbursing Agent	16
7.8.	Fractional Plan Distributions	17
7.9.	Special Plan Distribution Provisions for Equity Interests and Senior Note Claims	17
7.10.	Surrender and Cancellation of Instruments	18
ARTICLE VIII. PROCEDURES FOR RESOLVING AND TREATING CONTESTED CLAIMS		18
8.1.	Objection Deadline	18
8.2.	Prosecution of Contested Claims	19
8.3.	Claims Settlement	19
8.4.	Entitlement to Plan Distributions Upon Allowance	19
8.5.	Estimation of Claims	19
ARTICLE IX. CONDITIONS PRECEDENT TO CONFIRMATION OF THE PLAN AND THE OCCURRENCE OF THE EFFECTIVE DATE		20
9.1.	Conditions Precedent to Confirmation	20
9.2.	Conditions Precedent to the Occurrence of the Effective Date	20
9.3.	Waiver of Conditions	21
9.4.	Effect of Non-Occurrence of the Effective Date	21

ii

ARTICLE X. THE DISBURSING AGENT		21
10.1.	Powers and Duties	21
10.2.	Plan Distributions	21
10.3.	Exculpation	22
ARTICLE XI. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES		22
11.1.	Assumption and Rejection of Executory Contracts and Unexpired Leases	22
11.2.	Cure	23
11.3.	Claims Arising from Rejection, Expiration or Termination	24
ARTICLE XII. RETENTION OF JURISDICTION		25
ARTICLE XIII. MISCELLANEOUS PROVISIONS		26
13.1.	Payment of Statutory Fees	26
13.2.	Satisfaction of Claims	26
13.3.	Special Provisions Regarding Insured Claims	27
13.4.	Subrogation	27
13.5.	Third Party Agreements; Subordination	27
13.6.	Exculpation	28
13.7.	Discharge of Liabilities	28
13.8.	Discharge of Debtors	28
13.9.	Notices	29
13.10.	Headings	30
13.11.	Governing Law	30
13.12.	Expedited Determination	30
13.13.	Exemption from Transfer Taxes	30
13.14.	Retiree Benefits	30
13.15.	Notice of Entry of Confirmation Order and Relevant Dates	30
13.16.	Interest and Attorneys’ Fees	30
13.17.	Modification of the Plan	31
13.18.	Revocation of Plan	31
13.19.	Setoff Rights	32
13.20.	Compliance with Tax Requirements	32
13.21.	Rates; Currency	32
13.22.	Injunctions	32
13.23.	Binding Effect	33
13.24.	Severability	33
13.25.	No Admissions	33

iii

TABLE OF EXHIBITS

Exhibit	Name
A	Glossary of Defined Terms
B	List of Plan Documents

iv

MES International, Inc., GSI Group Inc. and GSI Group Corporation, debtors and debtors in possession in the above-captioned chapter 11 cases for which joint administration has been granted, hereby collectively and jointly propose the following chapter 11 plan of reorganization:

ARTICLE I.

DEFINITIONS AND INTERPRETATION

1.1. Definitions.

The capitalized terms used herein shall have the respective meanings set forth in the Glossary of Defined Terms attached hereto as Exhibit “A”.

1.2. Interpretation.

Unless otherwise specified, all section, article and exhibit references in the Plan are to the respective section in, article of, or exhibit to, the Plan, as the same may be amended, supplemented, waived or modified from time to time in accordance with the terms hereof. Words denoting the singular number shall include the plural number and vice versa, as appropriate, and words denoting one gender shall include the other gender. The Disclosure Statement may be referred to for purposes of interpretation to the extent any term or provision of the Plan is determined by the Bankruptcy Court to be ambiguous.

1.3. Application of Definitions and Rules of Construction Contained in the Bankruptcy Code.

Words and terms defined in section 101 of the Bankruptcy Code shall have the same meanings when used in the Plan, unless a different definition is given in the Glossary of Defined Terms. The rules of construction contained in section 102 of the Bankruptcy Code shall apply to the construction of the Plan.

1.4. Other Terms.

The words “herein,” “hereof,” “hereto,” “hereunder” and others of similar import refer to the Plan as a whole and not to any particular section, subsection or clause contained in the Plan.

1.5. Appendices and Plan Documents.

All appendices to the Plan and the Plan Documents are incorporated into the Plan by this reference and are a part of the Plan as if set forth in full herein. All Plan Documents shall be filed with the Clerk of the Bankruptcy Court not less than ten (10) days prior to the commencement of the Confirmation Hearing. Holders of Claims and Equity Interests may obtain a copy of the Plan Documents, once filed, by a written request sent to the following address:

Brown Rudnick LLP

One Financial Center

Boston, Massachusetts 02111

Attention: William R. Baldiga, Esq.

E-mail: wbaldiga@brownrudnick.com

Telephone: (617) 856-8200

Facsimile: (617) 856-8201

ARTICLE II.

CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS

For the purposes of organization, voting and all other confirmation matters, except as otherwise provided herein, all Claims against and all Equity Interests in each of the Debtors shall be classified as set forth in this Article II.

2.1. Administrative Claims and Tax Claims.

As provided by section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Tax Claims shall not be classified under the Plan, and shall instead be treated separately as unclassified Claims on the terms set forth in Article IV.

2.2. Claims and Equity Interests.

The classes of Claims against the Debtors and the Equity Interests in the Debtors shall be classified under the Plan as follows:

Class	Designation	Impairment	Whether Entitled to Vote
Class 1A	Holdings Priority Claims	Unimpaired	No (deemed to accept)
Class 1B	GSI Priority Claims	Unimpaired	No (deemed to accept)
Class 1C	MES Priority Claims	Unimpaired	No (deemed to accept)
Class 2A	Holdings Secured Claims	Unimpaired	No (deemed to accept)
Class 2B	GSI Secured Claims	Unimpaired	No (deemed to accept)
Class 2C	MES Secured Claims	Unimpaired	No (deemed to accept)
Class 3A	Holdings General Unsecured Claims	Unimpaired	No (deemed to accept)
Class 3B	GSI General Unsecured Claims	Unimpaired	No (deemed to accept)
Class 3C	MES General Unsecured Claims	Unimpaired	No (deemed to accept)
Class 4A	Holdings Intercompany Claims	Unimpaired	No (deemed to accept)
Class 4B	GSI Intercompany Claims	Unimpaired	No (deemed to accept)

2

Class	Designation	Impairment	Whether Entitled to Vote
Class 4C	MES Intercompany Claims	Unimpaired	No (deemed to accept)
Class 5A	Holdings Note Claims	Impaired	Yes
Class 5B	GSI Note Claims	Impaired	Yes
Class 6A	Holdings Equity Interests	Impaired	Yes
Class 6B	GSI Equity Interests	Unimpaired	No (deemed to accept)
Class 6C	MES Equity Interests	Unimpaired	No (deemed to accept)

2.3. Elimination of Classes.

Any Class of Claims that does not consist, as of the date of the Confirmation Hearing, of at least one Allowed Claim, Disputed Claim or a Claim temporarily Allowed under Rule 3018 of the Bankruptcy Rules, shall be deemed deleted from this Plan for all purposes.

2.4. Impairment Controversies.

If a controversy arises as to whether any Claim or Equity Interest, or any class of Claims or Equity Interests, is impaired under the Plan, the Bankruptcy Court shall, after notice and a hearing, determine such controversy.

ARTICLE III.

PROVISIONS FOR TREATMENT OF CLAIMS

AND EQUITY INTERESTS UNDER THE PLAN

The classes of Claims against the Debtors and Equity Interests in the Debtors shall be treated under the Plan as follows:

3.1. Classes 1A, 1B and 1C (collectively “Class 1”) – Priority Claims.

Each Allowed Priority Claim against any of the Debtors shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all legal, equitable and contractual rights as to an Allowed Priority Claim shall be fully reinstated and retained, and such Allowed Priority Claim shall, at the sole option of the applicable Debtor, receive the following treatment: (i) be paid on the Plan Distribution Date in full in Cash with Post-Petition Interest from the Petition Date through the Effective Date; (ii) be paid in accordance with the terms under which such Allowed Priority Claim arose, or (iii) receive such other treatment as may be agreed upon in writing by the holder of such Claim; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed Priority Claim.

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3.2. Classes 2A, 2B and 2C (collectively “Class 2”) – Secured Claims.

Each Allowed Secured Claim against any of the Debtors shall be unimpaired under the Plan and, at the sole option of the applicable Debtor, shall receive the following treatment: (i) shall receive on the Plan Distribution Date on account of such Allowed Secured Claim a Cash payment in an amount equal to the amount of the Allowed Secured Claim as of the Effective Date with Post-Petition Interest from the Petition Date through the Effective Date; (ii) shall retain its liens securing such Allowed Secured Claim and receive on account of such Allowed Secured Claim deferred cash payments having a present value on the Effective Date equal to the amount of such Allowed Secured Claim with Post-Petition Interest from the Petition Date through the Effective Date; (iii) shall realize the “indubitable equivalent” of such Allowed Secured Claim; (iv) the property securing the Allowed Secured Claim shall be sold free and clear of liens, with such liens to attach to the proceeds of the sale and the treatment of such liens on proceeds as provided in clause (ii), (iii) or (vi) of this subparagraph; (v) if such Allowed Secured Claim is subject to a valid right of recoupment or setoff, such Claim shall be setoff to the extent of the amount subject to setoff in accordance with sections 506(a) and 553 of the Bankruptcy Code; (vi) shall retain its liens securing such Allowed Secured Claim and be paid in accordance with the terms under which such Allowed Secured Claim arose; or (vii) shall receive such other treatment as may be agreed upon in writing by the holder of such Claim and such Debtor; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed Secured Claim.

3.3. Classes 3A, 3B and 3C (collectively “Class 3”) – General Unsecured Claims.

Each Allowed General Unsecured Claim against the Debtors shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all legal, equitable and contractual rights as to such Allowed General Unsecured Claim shall be fully reinstated and retained, and such Allowed General Unsecured Claim shall, at the sole option of the Debtors, receive the following treatment: (i) be paid on the Plan Distribution Date in full in Cash with Post-Petition Interest from the Petition Date through the Effective Date, (ii) be paid in accordance with the terms under which such Allowed General Unsecured Claim arose, or (iii) receive such other treatment as may be agreed upon in writing by the holder of such Claim and the Debtors; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed General Unsecured Claim.

3.4. Classes 4A, 4B and 4C (collectively “Class 4”) – Intercompany Claims.

Each Allowed Intercompany Claim against the Debtors shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all legal, equitable and contractual rights as to an Allowed Intercompany Claim shall be fully reinstated and retained, and such Allowed Intercompany Claim shall, at the sole option of the applicable Debtor, receive the following treatment: (i) be paid in accordance with the terms under which such Allowed Intercompany Claim arose, or (ii) receive such other treatment as may be agreed upon in writing by the holder of such Claim; provided that such agreed upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such Allowed Intercompany Claim.

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3.5. Classes 5A, and 5B (collectively “Class 5”) – Note Claims.

On the Plan Distribution Date, each Allowed Note Claim shall receive the following in full satisfaction of such Allowed Note Claim:

(i) a payment in Cash for interest (at the non-default rate) due under such Allowed Note Claim to the extent such interest is accrued, due and payable under the Allowed Note Claim and unpaid as of the Petition Date, at the contractual (non-default) rate provided in such Senior Note or GSI UK Note, as applicable, if any;

(ii) a payment in Cash for all reasonable fees, expenses (including, without limitation, all amounts payable to the Indenture Trustee) and all other amounts (other than principal, accrued interest or any penalties) due under such Allowed Note Claim to the extent such fees, expenses and other amounts are due and payable under the Allowed Note Claim and unpaid as of the Effective Date;

(iii) a Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 5 Note Claims, which total amount in the aggregate shall be equal to 81.4% of the Outstanding Capital Stock of Reorganized Holdings;

(iv) a Pro Rata Share of the New Senior Secured Notes; and

(v) a Pro Rata Share of the Cash Note Payment.

3.6. Class 6A - Holdings Equity Interest.

On the Effective Date, all Allowed Holdings Equity Interests shall be cancelled, and on account of each Holdings Equity Interest there shall be distributed on the Plan Distribution Date:

(i) a Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 6A Holdings Equity Interest, which total amount shall be 18.6% of the Outstanding Capital Stock of Reorganized Holdings;

(ii) a Pro Rata Share of New $1.10 Warrants; and

(iii) a Pro Rata Share of New $2.00 Warrants.

All Holdings Equity Interests which are either unexercised or unvested as of the Voting Record Date (and therefore are not included in the definition of Holdings Equity Interests) and all Rights shall be cancelled and terminated on the Effective Date, and the holders of such unexercised or unvested Equity Interests and Rights shall neither receive nor retain any property under the Plan on account of such unexercised or unvested Equity Interests and Rights unless the Bankruptcy Court orders otherwise.

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3.7. Class 6B – GSI Equity Interests.

Each GSI Equity Interest shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights as to such Equity Interests shall be fully reinstated and retained on and after the Effective Date and shall become Equity Interests held by Reorganized Holdings pursuant to the terms of the Plan.

3.8. Class 6C – MES Equity Interests.

Each MES Equity Interest shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights as to such Equity Interests shall be fully reinstated and retained on and after the Effective Date.

ARTICLE IV.

PROVISIONS FOR TREATMENT

OF UNCLASSIFIED CLAIMS UNDER THE PLAN

4.1. Unclassified Claims.

Administrative Claims and Tax Claims are treated in accordance with sections 1129(a)(9)(A) and 1129(a)(9)(C) of the Bankruptcy Code, respectively. Such Claims are not designated as classes of Claims for the purposes of this Plan or for the purposes of sections 1123, 1124, 1125, 1126 or 1129 of the Bankruptcy Code.

4.2. Treatment of Administrative Claims.

All Administrative Claims shall be treated as follows:

(a) Time for Filing Administrative Claims.

The holder of an Administrative Claim, other than (i) a Fee Claim, (ii) a liability incurred and payable in the ordinary course of business by a Debtor (and not past due), or (iii) an Administrative Claim that has been Allowed on or before the Effective Date, must file with the Bankruptcy Court and serve on the Debtors, any Committee and the Office of the United States Trustee, notice of such Administrative Claim within forty (40) days after service of Notice of Confirmation. Such notice must include at a minimum (A) the name of the Debtor(s) which are purported to be liable for the Claim, (B) the name of the holder of the Claim, (C) the amount of the Claim, and (D) the basis of the Claim. Failure to file and serve such notice timely and properly shall result in the Administrative Claim being forever barred and discharged.

(b) Time for Filing Fee Claims.

Each Professional Person who holds or asserts a Fee Claim shall be required to file with the Bankruptcy Court, and serve on all parties required to receive notice, a Fee Application within thirty (30) days after the Effective Date. The failure to timely file and serve such Fee Application shall result in the Fee Claim being forever barred and discharged.

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(c) Allowance of Administrative Claims and Fee Claims.

An Administrative Claim with respect to which notice has been properly filed and served pursuant to Section 4.2(a) shall become an Allowed Administrative Claim if no objection is filed within thirty (30) days after the later of (i) the Effective Date, or (ii) the date of service of the applicable notice of Administrative Claim or such later date as may be approved by the Bankruptcy Court on motion of a party in interest, without notice or a hearing. If an objection is filed within such thirty (30) day period (or any extension thereof), the Administrative Claim shall become an Allowed Administrative Claim only to the extent allowed by Final Order. A Fee Claim in respect of which a Fee Application has been properly filed and served pursuant to Section 4.2(b) shall become an Allowed Administrative Claim only to the extent allowed by order of the Bankruptcy Court.

(d) Payment of Allowed Administrative Claims.

Each Allowed Administrative Claim shall, at the sole option of the Debtors, receive (i) on the Plan Distribution Date, the amount of such Allowed Claim in Cash, (ii) with respect to Allowed Administrative Claims representing liabilities incurred in the ordinary course of business by the Debtors, payment when and as such Administrative Claims become due and owing by their ordinary course terms, or (iii) such other treatment as may be agreed upon in writing by the Debtors or the Disbursing Agent, as the case may be, and the holder of such Claim; provided, that such treatment shall not provide to the holder of such Claim a return having a present value as of the Effective Date in excess of such Allowed Administrative Claim. If a portion of an Administrative Claim is disputed, the undisputed portion of such Administrative Claim shall be timely paid as provided above.

(e) Allocation of Payments.

All payments made in respect of Allowed Administrative Claims pursuant to this Section shall be allocated among the Debtors, as determined by the Debtors in consultation with the Disbursing Agent (or, but only if there is a dispute as to the same, by the Bankruptcy Court), on a fair and equitable basis.

4.3. Treatment of Tax Claims.

At the election of the Debtors, each Allowed Tax Claim shall receive, in full satisfaction of such Allowed Tax Claim, (a) the amount of such Allowed Tax Claim, with Post-Confirmation Interest thereon, in equal annual Cash payments on each anniversary of the Effective Date, until the sixth anniversary of the date of assessment of such Tax Claim (provided that the Debtors may prepay the balance of any such Allowed Tax Claim at any time without penalty); (b) a lesser amount in one Cash payment as may be agreed upon in writing by the holder of such Claim; or (c) such other treatment as may be agreed upon in writing by the holder of such Claim and the Debtors; provided, that such agreed-upon treatment may not provide the holder of such Claim with a return having a present value as of the Effective Date that is greater than the amount of such holder’s Allowed Tax Claim. The Confirmation Order shall enjoin any holder of an Allowed Tax Claim from commencing or continuing any action or proceeding against any responsible person, officer or director of the Debtors that otherwise would be liable to such

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holder for payment of a Tax Claim so long as the Debtors are in compliance with this Section. So long as the holder of an Allowed Tax Claim is enjoined from commencing or continuing any action or proceeding against any responsible person, officer or director under this Section or pursuant to the Confirmation Order, the statute of limitations for commencing or continuing any such action or proceeding shall be tolled.

ARTICLE V.

ACCEPTANCE OR REJECTION OF THE PLAN;

EFFECT OF REJECTION BY ONE OR MORE

CLASSES OF CLAIMS OR EQUITY INTERESTS

5.1. Classes Entitled to Vote.

Each Class of Claims or Equity Interests that is impaired and will (or may) receive or retain property or any interest in property under this Plan, shall be entitled to vote to accept or reject this Plan. By operation of law, each Class of Claims that is unimpaired is deemed to have accepted the Plan and, therefore, is not entitled to vote to accept or reject the Plan.

5.2. Class Acceptance Requirement.

A class of Claims shall have accepted the Plan if it is accepted by at least two-thirds (2/3) in amount and more than one-half (1/2) in number of the Allowed Claims in such class that have voted on the Plan. A class of Equity Interests shall have accepted the Plan if it is accepted by holders of at least two-thirds (2/3) of the Allowed Equity Interests in such class that actually vote on the Plan.

5.3. Cramdown.

If all applicable requirements for confirmation of this Plan are met as set forth in section 1129(a)(1) through (16) of the Bankruptcy Code, except subsection (8) thereof, then this Plan shall be treated as a request that the Bankruptcy Court confirm this Plan in accordance with section 1129(b) of the Bankruptcy Code notwithstanding the failure to satisfy the requirements of section 1129(a)(8), on the basis that the Plan is fair and equitable and does not discriminate unfairly with respect to each class of Claims or Equity Interests that is impaired under, and has not accepted, this Plan.

5.4. Confirmation in All Cases.

Except as provided in Section 13.18, the Plan shall not be deemed to have been confirmed in any respect unless and until the Plan has been confirmed as to each of the Debtors.

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ARTICLE VI.

MEANS FOR IMPLEMENTATION OF THE PLAN

6.1. Operations between the Confirmation Date and the Effective Date.

During the period from the Confirmation Date through and until the Effective Date, the Debtors shall continue to operate their businesses as Debtors in Possession, subject to the Bankruptcy Code, the Bankruptcy Rules and all orders of the Bankruptcy Court that are then in full force and effect.

6.2. Reporting Requirements Under Exchange Act, Listing on Securities Exchange and Registration Rights.

(a) Reporting Requirements and Listing. Reorganized Holdings shall use its best efforts to be a mandatory reporting company under Section 11 of the Exchange Act, but it shall have no liability if it is unable to do so. In addition, Reorganized Holdings shall use its best efforts to list, as promptly as practicable after the Effective Date, the New Common Shares on a national securities exchange or for quotation on a national automated interdealer quotation system, but it shall have no liability if it is unable to do so. Persons receiving distributions of New Common Shares, by accepting such distributions, will be deemed to have agreed to cooperate with Reorganized Holdings’ reasonable requests to assist it in its efforts to list the New Common Shares on a national securities exchange or quotation system including, without limitation, by appointing or supporting the appointment of a sufficient number of directors to the board of directors of Reorganized Holdings who satisfy the independence and other requirements of any such national securities exchange or quotation system.

(b) Registration Rights Agreement. On the Effective Date, Reorganized Holdings shall enter into the Registration Rights Agreement.

6.3. Reorganized Holdings Constituent Documents.

As of the Effective Date, the Reorganized Holdings Constituent Documents are hereby authorized without further act or action under applicable law, regulation, order or rule and the Debtors and Reorganized GSI Entities, as applicable, are authorized to file such Reorganized Holdings Constituent Documents with the applicable Secretary(s) of State or the Director under the New Brunswick Business Corporations Act, as applicable.

6.4. New Corporate Structure for Reorganized Holdings.

(a) General. Except as otherwise set forth in the Plan, prior to or as of the Effective Date the Debtors may cause any or all of the Debtors to engage in any restructuring transactions deemed necessary or appropriate (including, without limitation, those merging, dissolving or transferring assets between or among the Debtors and/or the Non-Debtor Subsidiaries that are not Debtors in the Chapter 11 Cases) to implement the provisions of this Plan or to take any other actions consistent with this Plan and not prohibited by applicable law.

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(b) GSI UK Transfer. On the Effective Date, (i) Holdings shall transfer the GSI UK Shares to GSI Limited Holdings, and (ii) GSI Limited Holdings shall subsequently transfer the GSI UK Shares to GSI Limited Holdings II.

6.5. Cancellation of Holdings Equity Interests, Rights, GSI UK Note and Senior Notes.

On the Effective Date, except as otherwise provided for herein:

(i) the Holdings Equity Interests, the GSI UK Note and the Senior Notes and any other note, bond, indenture or other instrument or document evidencing or creating any indebtedness or obligation of the Debtors related to the Holdings Equity Interests, the GSI UK Note or the Senior Notes shall be canceled and terminated; and

(ii) the obligations of the Debtors under any agreements, indentures or certificates of designation governing the Holdings Equity Interests, the GSI UK Note, the Senior Notes and any other note, bond, indenture or other instrument or document evidencing or creating any indebtedness or obligation of the Debtors related to the Holdings Equity Interests, the GSI UK Note and the Senior Notes shall be discharged;

provided, however, that each indenture or other agreement that governs the rights of a Holder of Senior Note Claims and that is administered by an indenture trustee, an agent or a servicer shall continue in effect solely for the purposes of (a) allowing such indenture trustee, agent or servicer to make the distributions to be made on account of such Claims under the Plan as provided in Article III hereof, and (b) permitting such indenture trustee, agent or servicer to maintain any rights or liens it may have for fees, costs and expenses under such indenture or other agreement; provided, further, that the provisions of clause (ii) of this paragraph shall not affect the discharge of the Debtors’ liabilities under the Bankruptcy Code and the Confirmation Order or result in any expense or liability to the Reorganized GSI Entities; and provided further that such cancellation and discharge shall not impair the rights of any person to receive distributions under the Plan. Any actions taken by an indenture trustee, an agent or a servicer that are not for the purposes authorized in this Section 6.5 of the Plan shall not be binding upon the Debtors.

6.6. New Common Shares and New Warrants.

Reorganized Holdings shall, in exchange for the issuance by Reorganized GSI to Reorganized Holdings of 4,000,000 newly issued shares of common stock of Reorganized GSI, issue from Reorganized Holdings’ treasury to the Senior Noteholders and GSI UK their Pro Rata Share of the total amount of New Common Shares to be issued in respect of all of the Class 5 Note Claims.

As of the Effective Date, the issuance by Reorganized Holdings of the New Common Shares and the New Warrants is hereby authorized without further act or action under applicable law, regulation, order or rule.

The Confirmation Order shall provide that the issuance of the New Common Shares, the New Warrants and the Common Shares issuable upon exercise of the New Warrants shall be exempt from the registration requirements of the Securities Act in accordance with section 1145 of the Bankruptcy Code and applicable Canadian securities laws.

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6.7. New Senior Secured Notes.

(a) Authorization and Issuance.

As of the Effective Date, the issuance by Reorganized GSI of the New Senior Secured Notes is hereby authorized without further act or action under applicable law, regulation, order or rule.

As of the Effective Date, the guarantee by Reorganized Holdings and Reorganized MES of the New Senior Secured Notes is hereby authorized without further act or action under applicable law, regulation, order or rule.

The Confirmation Order shall provide that the issuance of the New Senior Secured Notes shall be exempt from the registration requirements of the Securities Act in accordance with section 1145 of the Bankruptcy Code and applicable Canadian securities laws.

(b) New Indenture. On the Effective Date, Reorganized Holdings, Reorganized GSI and Reorganized MES shall enter into, and shall cause their respective Subsidiaries party to the New Indenture to enter into, the New Indenture providing for the issuance of the New Senior Secured Notes and guarantees of such notes. Reorganized GSI shall qualify the New Indenture in accordance with the Trust Indenture Act of 1939.

(c) Security Documents. On or before the Effective Date, (i) Reorganized Holdings shall execute and shall cause its Subsidiaries party to the Security Documents to execute the Security Documents and (ii) if the Security Document is not a document that is to be executed, then Reorganized Holdings shall deliver or cause its Subsidiaries to deliver the Security Documents.

6.8. Other General Corporate Matters.

On or after the Effective Date, the Reorganized GSI Entities will be authorized to take such action as is necessary under the laws of the Province of New Brunswick, Canada, the State of Michigan, the State of Delaware, federal law and other applicable law to effect the terms and provisions of this Plan. Without limiting the foregoing, the issuance of the New Common Shares, the approval of the Reorganized Holdings Constituent Documents, the election and the appointment of directors and officers, and any other matter involving the corporate structure of the Reorganized Holdings shall be deemed to have occurred and shall be in effect from and after the Effective Date pursuant to section 303 and other applicable provisions of the Delaware General Corporation Law, section 450.1861 of the Michigan General Corporation Act and section 132 of the New Brunswick Business Corporation Act without any requirement of further action by the stockholders or directors of the Debtors or the Reorganized GSI Entities. All obligations of the Debtors to indemnify and hold harmless their current and former directors, officers and employees, whether arising under the Debtors’ constituent documents, contract, law or equity, shall be assumed by, and assigned to, the Reorganized GSI Entities upon the occurrence of the Effective Date with the same effect as though such obligations constituted executory contracts that are assumed (or assumed and assigned, as applicable) under section 365

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of the Bankruptcy Code, and all such obligations shall be fully enforceable in accordance with their terms from and after the Effective Date. Except as provided in Section 6.19 hereof, the prosecution of any so indemnified Cause of Action shall, upon the occurrence of the Effective Date, be enjoined and prohibited.

6.9. Continued Corporate Existence of the Debtors.

Each of the Debtors shall continue to exist after the Effective Date as a separate entity, with all the powers available to such legal entity, in accordance with applicable law and pursuant to the Reorganized Holdings Constituent Documents, which shall become effective upon the occurrence of the Effective Date. On or after the Effective Date, the Debtors may, within their sole and exclusive discretion, take such action as permitted by applicable law and their constituent documents, as they determine may be reasonable and appropriate.

6.10. Re-vesting of Assets.

Upon the occurrence of the Effective Date, except as otherwise expressly provided in the Plan, title to all of the Assets of the Debtors and their Estates shall vest in the Reorganized GSI Entities free and clear of all liens, Claims, Causes of Action, interests, security interests and other encumbrances and without further order of the Bankruptcy Court. On and after the occurrence of the Effective Date, the Reorganized GSI Entities may operate their businesses and may use, acquire and dispose of their Assets free of any restrictions of the Bankruptcy Code.

6.11. Management.

Except as set forth in Section 6.12 hereof, upon the occurrence of the Effective Date, the management and operation of each of the Reorganized GSI Entities shall be the general responsibility of each such entity’s then current board of directors and management. The Confirmation Order shall ratify and approve all actions taken by each of the Debtors from the Petition Date through the Effective Date.

6.12. Boards of Directors.

(a) Reorganized Holdings. On the Effective Date, the board of directors of Reorganized Holdings shall be set at seven members (including the Chief Executive Officer of Reorganized Holdings and five members selected by the Noteholders). The identities of the members of the board of directors of Reorganized Holdings shall be disclosed prior to the conclusion of the Confirmation Hearing. Such directors shall serve in accordance with the applicable Reorganized Holdings Constituent Documents, as the same may be amended from time to time.

(b) Reorganized GSI. On the Effective Date, Reorganized Holdings, as sole stockholder of Reorganized GSI and as contemplated by the Bylaws of Reorganized GSI, shall continue to be authorized to take actions required to be taken by the board of directors of Reorganized GSI.

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(c) Reorganized MES. On the Effective Date, the initial board of directors of Reorganized MES shall be comprised of the individuals who hold such positions as of the Effective Date.

(d) Continuing Directors. From and after the Effective Date, the members of the board of directors (or managers, as applicable) of the Reorganized GSI Entities shall be selected and determined in accordance with the provisions of the respective Reorganized Holdings Constituent Documents and applicable law.

6.13. Officers.

Except as otherwise determined by the board of directors of the Reorganized GSI Entities, the then current officers of each of the Debtors shall serve in such positions after the Effective Date for each of the Reorganized GSI Entities in accordance with their respective employment agreements, if any, and applicable law. Subject to any applicable employment agreements and applicable law, from and after the Effective Date, the officers of the Reorganized GSI Entities shall be selected and appointed by the respective boards of directors of such entities, in accordance with, and pursuant to, the provisions of applicable law and the respective Reorganized Holdings Constituent Documents.

6.14. Management Incentive Plan.

As soon as reasonably practicable after the Effective Date, the board of directors of Reorganized Holdings will establish and implement a new management incentive plan under which New Common Shares in an amount not to exceed 8% of the Post-Effective Date Fully Diluted Capital Stock of Reorganized Holdings will be reserved for management of Reorganized Holdings. Any such allocation under such new management incentive plan will be determined by the board of directors of Reorganized Holdings, which allocation may consist of, among other things, restricted stock and/or time and performance based options, and will take account of any other bonus and compensation plans. The members of management and the employees entitled to participate in the new management incentive plan, and the awards for each, will be determined by the board of directors of Reorganized Holdings in its sole and absolute discretion.

6.15. Causes of Action.

Except as otherwise provided in the Plan, all Causes of Action of any of the Debtors and their respective Estates, shall, upon the occurrence of the Effective Date, be transferred to, and be vested in, the Reorganized GSI Entities. Except as otherwise provided in the Plan, the Reorganized GSI Entities’ rights to commence, prosecute or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date. The Debtors hereby waive, and do not preserve, any Avoidance Actions.

No Person may rely on the absence of a specific reference in the Plan or the Disclosure Statement to any Cause of Action against them as any indication that the Debtors will not pursue any and all available Causes of Action against them. The Debtors and the Estates, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against any Person, except only for any Avoidance Action and except as otherwise expressly provided in the Plan or the Plan Documents. Unless any Causes of

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Action against a Person are expressly waived, relinquished, exculpated, released, compromised or settled in the Plan or a Final Order, the Debtors expressly reserve all such Causes of Action for later adjudication and, therefore, no preclusion doctrine, including without limitation, the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable or otherwise) or laches shall apply to such Causes of Action upon or after the confirmation or consummation of the Plan.

6.16. Appointment of the Disbursing Agent.

Upon the occurrence of the Effective Date, Reorganized Holdings shall be appointed to serve as the Disbursing Agent, and shall have all powers, rights, duties and protections afforded the Disbursing Agent under the Plan. Reorganized Holdings may delegate or assign such appointment in its discretion.

6.17. Sources of Cash for Plan Distributions.

All Cash necessary for the Disbursing Agent to make Plan Distributions and any other payments shall be obtained from the Debtors’ existing Cash balances.

6.18. Releases by the Debtors.

As of the Effective Date, for good and valuable consideration, the Debtors and the Reorganized GSI Entities (in their individual capacities and as Debtors in Possession) shall be deemed to release and forever waive and discharge all claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Chapter 11 Cases, this Plan or the Disclosure Statement, and that could have been asserted by or on behalf of the Debtors or their Estates or the Reorganized GSI Entities against any of the Released Parties; provided, however, that nothing in this Section shall be construed to release any party or entity from (x) willful misconduct or gross negligence as determined by a Final Order, or (y) any objections by the Debtors or the Reorganized GSI Entities to Claims or Equity Interests filed by such party or entity against any Debtor and/or its Estate.

6.19. Releases by Creditors and Equity Security Holders.

Subject to the occurrence of the Effective Date, for good and valuable consideration, the adequacy of which is hereby confirmed, each holder of a Claim or Equity Interest that votes to accept the Plan, solely in its capacity as the holder of such Claim or Equity Interest, shall be presumed conclusively absolutely, unconditionally and irrevocably to have released and forever waived and discharged any Cause of Action and any and all claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities, whether direct or derivative, liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or part on any act,

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omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Chapter 11 Cases, this Plan, the Disclosure Statement, any Debtor, the Debtors’ restructuring or the purchase, sale or rescission of the purchase or sale of any security of any Debtor, the subject matter of, or the transactions or events giving rise to, any Claim or Equity Interest that is treated in the Plan, the business or contractual arrangements between any Debtor and any Released Party, the restructuring of Claims and Equity Interests prior to or in the Chapter 11 Cases or any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date of the Plan and including any claim that could have been asserted by or on behalf of the Debtors or their Estates or the Reorganized GSI Entities, in each case, against any of the Released Parties; provided, however, that nothing in this Section shall be construed to release any party from willful misconduct or gross negligence as determined by a Final Order.

6.20. Fixing of Principal Balance of GSI UK Note.

For administrative ease (given that the GSI UK Note is denominated in British pounds and the exchange rate between United States Dollars and British Pounds fluctuates daily, it shall be assumed that the outstanding principal balance of the GSI UK Note is fixed at $20,000,000 for purposes of Plan Distributions, and the difference (in United States Dollars) between $20,000,000 and the value as of the Petition Date (in United States Dollars) of GBP 12,500,000 shall be added or subtracted, as the case may be, to the intercompany account maintained between GSI UK and GSI.

ARTICLE VII.

PLAN DISTRIBUTION PROVISIONS

7.1. Plan Distributions.

The Disbursing Agent shall make all Plan Distributions. In the event a Plan Distribution is payable on a day other than a Business Day, such Plan Distribution shall instead be paid on the immediately succeeding Business Day, but shall be deemed to have been made on the date otherwise due. For federal income tax purposes, except to the extent a Plan Distribution is made in connection with reinstatement of an obligation pursuant to section 1124 of the Bankruptcy Code, a Plan Distribution will be allocated first to the principal amount of a Claim and then, to the extent the Plan Distribution exceeds the principal amount of the Claim, to the portion of the Claim representing accrued but unpaid interest.

7.2. Timing of Plan Distributions.

Each Plan Distribution shall be made on the relevant Plan Distribution Date therefor and shall be deemed to have been timely made if made on such date or within ten (10) days thereafter.

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7.3. Address for Delivery of Plan Distributions/Unclaimed Plan Distributions.

Subject to Bankruptcy Rule 9010, any Plan Distribution or delivery to a holder of an Allowed Claim shall be made at the address of such holder as set forth (a) in the Schedules, (b) on the proof of Claim filed by such holder, (c) in any notice of assignment filed with the Bankruptcy Court with respect to such Claim pursuant to Bankruptcy Rule 3001(e), and (d) in any notice served by such holder giving details of a change of address. If any Plan Distribution is returned to the Disbursing Agent as undeliverable, no Plan Distributions shall be made to such holder unless the Disbursing Agent is notified of such holder’s then current address within ninety (90) days after such Plan Distribution was returned. After such date, if such notice was not provided, a holder shall have forfeited its right to such Plan Distribution, and the undeliverable Plan Distributions shall be returned to the Reorganized GSI Entities.

7.4. De Minimis Plan Distributions.

No Plan Distribution of less than ten dollars ($10.00) need be made by the Disbursing Agent to the holder of any Claim unless a request therefor is made in writing to the Disbursing Agent. If no request is made as provided in the preceding sentence within ninety (90) days of the Effective Date, all such Plan Distributions shall revert to the Reorganized GSI Entities.

7.5. Time Bar to Cash Payments.

Checks issued in respect of Allowed Claims shall be null and void if not negotiated within one hundred and eighty (180) days after the date of issuance thereof. Requests for reissuance of any voided check shall be made directly to the Disbursing Agent by the holder of the Allowed Claim to whom such check was originally issued. Any claim in respect of such a voided check shall be made within one hundred and eighty (180) days after the date of issuance of such check. If no request is made as provided in the preceding sentence, any claims in respect of such voided check shall be discharged and forever barred and such unclaimed Plan Distribution shall revert to the Reorganized GSI Entities.

7.6. Manner of Payment under the Plan.

Unless the Person receiving a Plan Distribution agrees otherwise, any Plan Distribution to be made in Cash under the Plan shall be made, at the election of the Disbursing Agent, by check drawn on a domestic bank or by wire transfer from a domestic bank. Cash payments to foreign creditors may, in addition to the foregoing, be made, at the option of the Disbursing Agent in such funds and by such means as are necessary or customary in a particular foreign jurisdiction.

7.7. Expenses Incurred on or after the Effective Date and Claims of the Disbursing Agent.

Except as otherwise ordered by the Bankruptcy Court or as provided herein, the amount of any reasonable fees and expenses incurred (or to be incurred) by the Disbursing Agent on or after the Effective Date (including, but not limited to, taxes) shall be paid when due. Professional fees and expenses incurred by the Disbursing Agent from and after the Effective Date in connection with the effectuation of the Plan shall be paid in the ordinary course of business. Any dispute regarding compensation shall be resolved by agreement of the parties, or if the parties are unable to agree, as determined by the Bankruptcy Court.

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7.8. Fractional Plan Distributions.

(a) When any distribution on account of an Allowed Claim or Allowed Equity Interest pursuant to the Plan would otherwise result in the issuance of a number of New Common Shares (including New Common Shares issuable upon the exercise of New Warrants) that is not a whole number, the actual distribution of New Common Shares shall be rounded as follows: (i) fractions of  ¹/2 or greater shall be rounded to the next higher whole number, and (ii) fractions of less than  ¹/2 shall be rounded to the next lower whole number, provided, however, that the Disbursing Agent, or the Indenture Trustee, as the case may be, shall have the authority to further adjust, after taking into account the rounding provided in this Section 7.8, the number of New Common Shares to be distributed (including New Common Shares issuable upon the exercise of New Warrants) to each holder of Claims or Equity Interest, as applicable, in Classes 5 and 6A (by increasing or decreasing by 1 the number of such shares) as necessary in order for the holders of Claims or Equity Interest, as applicable, in Classes 5 and 6A, as appropriate, to receive New Common Shares in the amounts specified in Article III hereto.

(b) The New Senior Secured Notes shall be issued in a minimum face amount (the “Face Amount Minimum”) and integral multiples (“Integral Multiples”) as provided in the New Indenture. When any distribution on account of an Allowed Claim pursuant to the Plan would otherwise result in the issuance of a New Senior Secured Note (A) in an amount less than the Face Amount Minimum, the face amount of each New Senior Secured Note shall be rounded as follows: (i) amounts that are greater than or equal to 50% of the Face Amount Minimum shall be rounded up to the Face Amount Minimum; and (ii) amounts that are less than 50% of the Face Amount Minimum shall be rounded down and no New Senior Secured Notes shall be issued for such Allowed Clam; and (B) in an amount in excess of the Face Amount Minimum but less than an Integral Multiple, the face amount of each New Senior Secured Note shall be rounded as follows for the portion in excess of the Integral Multiple: (i) amounts that are greater than or equal to 50% of the Integral Multiple shall be rounded to the next higher Integral Multiple; and (ii) amounts that are less than 50% of the Integral Multiple shall be rounded to the next lower Integral Multiple; provided, however, that the Disbursing Agent, or the Indenture Trustee, as the case may be, shall have the authority to further adjust, after taking into account the rounding provided in this Section 7.8, the Pro Rata portion of New Senior Secured Notes to be distributed to each holder of Claims in Class 5 (by increasing or decreasing by the Face Amount Minimum the amount of such New Senior Secured Notes) as necessary in order for the holders of Claims in Class 5 as appropriate, to receive New Senior Secured Notes in the amounts specified in Article III hereto.

7.9. Special Plan Distribution Provisions for Equity Interests and Senior Note Claims.

For the purpose of making Plan Distributions, the transfer ledger in respect of the Equity Interests and Senior Notes shall be closed as of the close of business on the date set forth in the Disclosure Statement Order (or, if not set forth there, on the Confirmation Date), and the

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Disbursing Agent and its agent shall be entitled to recognize and deal for all purposes herein with only those holders of record stated on the transfer ledger maintained by the stock transfer agent for the Equity Interests and Senior Notes as of the close of business on the Confirmation Date. On the Effective Date, all Equity Interests in Holdings and Senior Notes shall be cancelled and annulled, and all rights thereunder shall be settled and compromised in full in exchange for the Plan Distributions to be made to the holders of such Equity Interests and Senior Note Claims as applicable.

7.10. Surrender and Cancellation of Instruments.

As a condition to receiving any Plan Distribution, on or before the Plan Distribution Date, the holder of an Allowed Claim or Allowed Equity Interest evidenced by a certificate, instrument or note, other than any such certificate, instrument or note that is being reinstated or being left unimpaired under the Plan, shall (i) surrender such certificate, instrument or note representing such Claim or Equity Interest, including, without limitation, any guaranties except to the extent assumed by the Debtors, and (ii) execute and deliver such other documents as may be necessary to effectuate the Plan. Such certificate, instrument or note, including any such guaranties, shall thereafter be cancelled and extinguished. The Disbursing Agent shall have the right to withhold any Plan Distribution to be made to or on behalf of any holder of such Claims or Equity Interests unless and until (1) such certificates, instruments or notes, including any such guaranties, are surrendered, or (2) any relevant holder provides to the Disbursing Agent an affidavit of loss or such other documents as may be required by the Disbursing Agent together with an appropriate indemnity in the customary form. Any such holder who fails to surrender such certificates, instruments or notes, including any such guaranties, or otherwise fails to deliver an affidavit of loss and indemnity prior to the second anniversary of the Effective Date, shall be deemed to have forfeited its Claims or Equity Interests, as applicable, and shall not participate in any Plan Distribution. All property in respect of such forfeited Claims or Equity Interests, as applicable, shall revert to the Reorganized GSI Entities. In the event such certificate, instrument or note is held in the name of, or by a nominee of, the Depository Trust Company, the Debtors shall seek the cooperation of the Depository Trust Company and/or the Indenture Trustee in facilitating distributions.

ARTICLE VIII.

PROCEDURES FOR RESOLVING

AND TREATING CONTESTED CLAIMS

8.1. Objection Deadline.

As soon as practicable, but in no event later than sixty (60) days after the Effective Date (subject to being extended by the order of the Bankruptcy Court upon motion of the Disbursing Agent without notice or a hearing), objections to Claims shall be filed with the Bankruptcy Court and served upon the holders of each of the Claims to which objections are made.

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8.2. Prosecution of Contested Claims.

The Disbursing Agent may object to the allowance of any scheduled or filed Claims as to which liability is disputed in whole or in part. All objections that are filed and prosecuted as provided herein shall be litigated to Final Order or compromised and settled in accordance with Section 8.3.

8.3. Claims Settlement.

Notwithstanding any requirements that may be imposed pursuant to Bankruptcy Rule 9019, from and after the Effective Date, the Disbursing Agent shall have authority to settle or compromise all Claims and Causes of Action without further review or approval of the Bankruptcy Court.

8.4. Entitlement to Plan Distributions Upon Allowance.

Notwithstanding any other provision of the Plan, and except as set forth at Section 4.2 of this Plan as to Administrative Claims, no Plan Distribution shall be made with respect to any Claim to the extent it is a Contested Claim, unless and until such Contested Claim becomes an Allowed Claim, subject to the setoff rights as provided in Section 13.19. When a Claim that is not an Allowed Claim as of the Effective Date becomes an Allowed Claim, the holder of such Allowed Claim shall thereupon become entitled to receive the Plan Distributions in respect of such Claim, the same as though such Claim had been an Allowed Claim on the Effective Date, and without interest or other compensation for the time elapsed after the Effective Date.

8.5. Estimation of Claims.

The Disbursing Agent may, at any time, request that the Bankruptcy Court estimate any Claim pursuant to section 502(c) of the Bankruptcy Code regardless of whether the Disbursing Agent has previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court will retain jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including during the pendency of any appeal relating to any such objection. In the event that the Bankruptcy Court estimates any Contested Claim, that estimated amount will constitute the Allowed amount of such Claim for all purposes under the Plan. All of the objection, estimation, settlement and resolution procedures set forth in the Plan are cumulative and not necessarily exclusive of one another. Claims may be estimated and subsequently compromised, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court.

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ARTICLE IX.

CONDITIONS PRECEDENT TO

CONFIRMATION OF THE PLAN AND

THE OCCURRENCE OF THE EFFECTIVE DATE

9.1. Conditions Precedent to Confirmation.

The following are conditions precedent to confirmation of the Plan:

(a) The Clerk of the Bankruptcy Court shall have entered an order or orders (i) approving the Disclosure Statement as containing “adequate information” pursuant to section 1125 of the Bankruptcy Code, (ii) authorizing the solicitation of votes with respect to the Plan, (iii) determining that all votes are binding and have been properly tabulated as acceptances or rejections of the Plan, (iv) confirming and giving effect to the terms and provisions of the Plan, (v) determining that all applicable tests, standards and burdens in connection with the Plan have been duly satisfied and met by the Debtors and the Plan, (vi) approving the Plan Documents, and (vii) authorizing the Debtors to execute, enter into, and deliver the Plan Documents and to execute, implement, and to take all actions otherwise necessary or appropriate to give effect to, the transactions and transfer of Assets contemplated by the Plan and the Plan Documents;

(b) The Confirmation Order, the Plan Documents and the Plan are each in a form satisfactory to the Debtors; and

(c) The Confirmation Order shall include determinations that all of the settlements and compromises contained in the Plan meet the applicable standards under section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019 for approval and implementation.

9.2. Conditions Precedent to the Occurrence of the Effective Date.

The following are conditions precedent to the occurrence of the Effective Date:

(a) The Confirmation Order shall have been entered by the Clerk of the Bankruptcy Court and shall have become a Final Order;

(b) All necessary consents, authorizations and approvals shall have been given for the transfers of property and the payments provided for or contemplated by the Plan, including, without limitation, satisfaction or waiver of all conditions to the obligations of the Debtors under the Plan and the Plan Documents;

(c) The New Indenture shall have become effective and all conditions to the effectiveness thereof shall have been satisfied or waived;

(d) The Confirmation Order shall have been confirmed and recognized by the Court of Queen’s Bench of New Brunswick;

(e) The Security Documents (i) shall be executed and have become effective and all conditions to the effectiveness thereof shall have been satisfied or waived or (ii) if not a document that is to be executed, then delivered;

(f) The Reorganized Holdings Constituent Documents shall have been filed with the applicable authority of their respective jurisdiction of incorporation and/or formation in accordance with such jurisdictions applicable laws;

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(g) The unpaid filed and scheduled (excluding Disallowed Claims) Priority Claims (Class 1), Secured Claims (Class 2) and General Unsecured Claims (Class 3) shall not exceed in the aggregate $22,500,000;

(h) The Effective Date shall have occurred by April 20, 2010 unless such date is extended pursuant to the Plan Support Agreement.

9.3. Waiver of Conditions.

The conditions set forth in Section 9.1 or Section 9.2 may be waived only as set forth in the Plan Support Agreement.

9.4. Effect of Non-Occurrence of the Effective Date.

If the Effective Date shall not occur, the Plan shall be null and void and nothing contained in the Plan shall: (a) constitute a waiver or release of any Claims against or Equity Interests in a Debtor; (b) prejudice in any manner the rights of the Debtors, including, without limitation, any right to seek a further extension of the exclusivity periods under section 1121(d) of the Bankruptcy Code; or (c) constitute an admission, acknowledgement, offer or undertaking by the Debtors.

ARTICLE X.

THE DISBURSING AGENT

10.1.  Powers and Duties.

Pursuant to the terms and provisions of the Plan, the Disbursing Agent shall be empowered and directed to (a) take all steps and execute all instruments and documents necessary to make Plan Distributions to holders of Allowed Claims and Equity Interests; (b) comply with the Plan and the obligations thereunder; (c) employ, retain or replace professionals to represent it with respect to its responsibilities; (d) object to Claims as specified in Article VIII, and prosecute such objections; (e) compromise and settle any issue or dispute regarding the amount, validity, priority, treatment or Allowance of any Claim as provided in Article VIII; (f) make annual and other periodic reports regarding the status of distributions under the Plan to the holders of Allowed Claims that are outstanding at such time; such reports to be made available upon request to the holder of any Contested Claim; and (g) exercise such other powers as may be vested in the Disbursing Agent pursuant to the Plan, the Plan Documents or order of the Bankruptcy Court.

10.2.  Plan Distributions.

Pursuant to the terms and provisions of the Plan, the Disbursing Agent shall make the required Plan Distributions specified under the Plan on the relevant Plan Distribution Date therefor.

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10.3.  Exculpation.

Except as otherwise provided in this Section, the Disbursing Agent, together with its officers, managers, directors, employees, agents, and representatives, are exculpated pursuant to the Plan by all Persons, holders of Claims and Equity Interests, and all other parties in interest, from any and all Causes of Action arising out of the discharge of the powers and duties conferred upon the Disbursing Agent (and each of its respective paying agents), by the Plan, any Final Order of the Bankruptcy Court entered pursuant to or in the furtherance of the Plan, or applicable law, except solely for actions or omissions arising out of the Disbursing Agent’s willful misconduct or gross negligence. No holder of a Claim or an Equity Interest, or representative thereof, shall have or pursue any Cause of Action (a) against the Disbursing Agent or its respective officers, managers, directors, employees, agents and representatives for making Plan Distributions in accordance with the Plan, or (b) against any holder of a Claim or an Equity Interest for receiving or retaining Plan Distributions as provided for by the Plan. Nothing contained in this Section shall preclude or impair any holder of an Allowed Claim or Allowed Equity Interest from bringing an action in the Bankruptcy Court against any Debtor to compel the making of Plan Distributions contemplated by the Plan on account of such Claim or Equity Interest.

ARTICLE XI.

TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

11.1.  Assumption and Rejection of Executory Contracts and Unexpired Leases.

(a) On the Effective Date, all executory contracts and unexpired leases of the Debtors shall be assumed pursuant to the provisions of section 365 of the Bankruptcy Code, except: (i) any executory contracts and unexpired leases that are the subject of separate motions to reject filed pursuant to section 365 of the Bankruptcy Code by the Debtors before the Effective Date; (ii) any contracts and leases listed in any Schedule 2 attached to the Disclosure Statement and any subsequently filed “Schedule of Rejected Executory Contracts and Unexpired Leases” to be filed by the Debtors with the Bankruptcy Court before the entry of, or as an exhibit to, the Confirmation Order; (iii) all executory contracts and unexpired leases rejected under this Plan or by order of the Bankruptcy Court entered before the Effective Date; (iv) any executory contract or unexpired lease that is the subject of a dispute over the amount or manner of cure pursuant to the next section hereof and for which the Debtors make a motion to reject such contract or lease based upon the existence of such dispute filed at any time; and (v) any agreement, obligation, security interest, transaction or similar undertaking that the Debtors believe is not executory or a lease that is later determined by the Bankruptcy Court to be an executory contract or unexpired lease that is subject to assumption or rejection under section 365 of the Bankruptcy Code.

(b) Inclusion of a contract, lease or other agreement on any Schedule 2 attached to the Disclosure Statement shall constitute adequate and sufficient notice that (i) any Claims arising thereunder or related thereto shall be treated as General Unsecured Claims under the Plan, and (ii) the Debtors are no longer bound by, or otherwise obligated to perform, any such obligations, transactions, or undertakings relating thereto or arising thereunder. The

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inclusion of a contract, lease or other agreement in Section 11.1(a) or on Disclosure Statement Schedule 3 or the “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases” shall not constitute an admission by the Debtors as to the characterization of whether any such included contract, lease or other agreement is, or is not, an executory contract or unexpired lease or whether any claimants under any such contract, lease or other agreement are time-barred from asserting Claims against the Debtors. The Debtors reserve all rights with respect to the characterization of any such agreements.

(c) The Plan shall constitute a motion to reject such executory contracts and unexpired leases set forth in any Schedule 2 attached to the Disclosure Statement and any subsequently filed “Schedule of Rejected Executory Contracts and Unexpired Leases” to be filed by the Debtors with the Bankruptcy Court before the entry of, or as an exhibit to, the Confirmation Order, and the Debtors shall have no liability thereunder except as is specifically provided in the Plan. Entry of the Confirmation Order by the Clerk of the Bankruptcy Court shall constitute approval of such rejections pursuant to section 365(a) of the Bankruptcy Code and a finding by the Bankruptcy Court that each such rejected agreement, executory contract or unexpired lease is burdensome and that the rejection thereof is in the best interests of the Debtors and their Estates.

(d) The Plan shall constitute a motion to assume or assume and assign such executory contracts and unexpired leases assumed or assumed and assigned pursuant to Section 11.1(a) and the Debtors shall have no liability thereunder for any breach of any assumed and assigned executory contract or lease occurring after such assignment pursuant to section 365(k) of the Bankruptcy Code, except as is specifically provided in the Plan. Entry of the Confirmation Order by the Clerk of the Bankruptcy Court shall constitute approval of such assumption or assumption and assignment pursuant to sections 365(a), (b) and (f) of the Bankruptcy Code, and a finding by the Bankruptcy Court that the requirements of section 365(f) of the Bankruptcy Code have been satisfied. Any non-Debtor counterparty to an agreement listed on Schedule 3 or the “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases,” or otherwise designated as being assumed in Section 11.1(a), who disputes the assumption and/or assignment of an executory contract or unexpired lease must file with the Bankruptcy Court, and serve upon the Debtors and any Committee, a written objection to the assumption and/or assignment, which objection shall set forth the basis for the dispute by no later than ten (10) Business Days prior to the Confirmation Hearing. The failure to timely object shall be deemed a waiver of any and all objections to the assumption or assumption and assignment of executory contracts and leases as set forth in Schedule 3 or the “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases” or as otherwise designated as being assumed in Section 11.1(a).

11.2.  Cure.

At the election of the Debtors, any monetary defaults under each executory contract and unexpired lease to be assumed under this Plan shall be satisfied pursuant to section 365(b)(1) of the Bankruptcy Code: (a) by payment of the default amount in Cash on the Effective Date or as soon thereafter as practicable; or (b) on such other terms as agreed to by the parties to such executory contract or unexpired lease. In the event of a dispute regarding: (i) the amount of any

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cure payments; (ii) the ability to provide adequate assurance of future performance under the contract or lease to be assumed or assigned; or (iii) any other matter pertaining to assumption or assignment, the cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order resolving the dispute and approving assumption or assignment, as applicable. Schedule 3 attached to the Disclosure Statement and any subsequently filed “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases” sets forth the Debtors’ cure obligations for each agreement which a cure obligation must be satisfied as a condition to the assumption or assumption and assignment of such agreement. Any non-Debtor counterparty to an agreement listed on Schedule 3 attached to the Disclosure Statement and any subsequently filed “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases” who disputes the scheduled cure obligation must file with the Bankruptcy Court, and serve upon the Debtors and any Committee, a written objection to the cure obligation, which objection shall set forth the basis for the dispute, the alleged correct cure obligation, and any other objection related to the assumption or assumption and assignment of the relevant agreement by no later than ten (10) Business Days prior to the Confirmation Hearing. If a non-Debtor counterparty fails to file and serve an objection which complies with the foregoing, the cure obligation set forth on Schedule 3 attached to the Disclosure Statement and any subsequently filed “Schedule of Assumed and Assumed and Assigned Executory Contracts and Unexpired Leases” shall be binding on the non-Debtor counterparty, and the non-Debtor counterparty shall be deemed to have waived any and all objections to the assumption or assumption and assignment of the relevant agreement as proposed by the Debtors.

11.3.  Claims Arising from Rejection, Expiration or Termination.

Claims created by the rejection of executory contracts and unexpired leases or the expiration or termination of any executory contract or unexpired lease prior to the Confirmation Date must be filed with the Bankruptcy Court and served on the Debtors (a) in the case of an executory contract or unexpired lease rejected by the Debtors prior to the Confirmation Date, in accordance with the Bar Date Notice, or (b) in the case of an executory contract or unexpired lease that (i) was terminated or expired by its terms prior to the Confirmation Date, or (ii) is rejected pursuant to Section 11.1, no later than thirty (30) days after the Confirmation Date. Any such Claims for which a proof of claim is not filed and served by the deadlines set forth in the Bar Date Notice or this Section 11.3, as applicable, will be forever barred from assertion and shall not be enforceable against the Debtors, the Reorganized GSI Entities, their respective Estates, Affiliates, or Assets. Unless otherwise ordered by the Bankruptcy Court, all such Claims that are timely filed as provided herein shall be treated as General Unsecured Claims under the Plan subject to objection by the Disbursing Agent.

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ARTICLE XII.

RETENTION OF JURISDICTION

Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, the Bankruptcy Court shall retain and shall have exclusive jurisdiction over any matter (a) arising under the Bankruptcy Code, (b) arising in or related to the Chapter 11 Case or the Plan, or (c) that relates to the following:

(i) To hear and determine any and all motions or applications pending on the Confirmation Date or thereafter brought in accordance with Article XI hereof for the assumption, assumption and assignment or rejection of executory contracts or unexpired leases to which any of the Debtors is a party or with respect to which any of the Debtors may be liable, and to hear and determine any and all Claims and any related disputes (including, without limitation, the exercise or enforcement of setoff or recoupment rights, or rights against any third party or the property of any third party resulting therefrom or from the expiration, termination or liquidation of any executory contract or unexpired lease);

(ii) To determine any and all adversary proceedings, applications, motions, and contested or litigated matters that may be pending on the Effective Date or that, pursuant to the Plan, may be instituted by the Disbursing Agent or the Debtors, as applicable, after the Effective Date;

(iii) To hear and determine any objections to the allowance of Claims, whether filed, asserted, or made before or after the Effective Date, including, without express or implied limitation, to hear and determine any objections to the classification of any Claim and to allow, disallow or estimate any Contested Claim in whole or in part;

(iv) To issue such orders in aid of execution of the Plan to the extent authorized or contemplated by section 1142 of the Bankruptcy Code;

(v) To consider any modifications of the Plan, remedy any defect or omission, or reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order;

(vi) To hear and determine all Fee Applications and applications for allowances of compensation and reimbursement of any other fees and expenses authorized to be paid or reimbursed under the Plan or the Bankruptcy Code;

(vii) To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with the Plan, the Plan Documents or their interpretation, implementation, enforcement, or consummation;

(viii) To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with the Confirmation Order (and all exhibits to the Plan) or its interpretation, implementation, enforcement, or consummation;

(ix) To the extent that Bankruptcy Court approval is required, to consider and act on the compromise and settlement of any Claim or Cause of Action by, on behalf of, or against any Estate;

(x) To determine such other matters that may be set forth in the Plan, or the Confirmation Order, or that may arise in connection with the Plan, or the Confirmation Order;

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(xi) To hear and determine matters concerning state, local, and federal taxes, fines, penalties, or additions to taxes for which the Reorganized GSI Entities, the Debtors, the Debtors in Possession, or the Disbursing Agent may be liable, directly or indirectly, in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

(xii) To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with any setoff and/or recoupment rights of the Debtors or any Person under the Plan;

(xiii) To hear and determine all controversies, suits, and disputes that may relate to, impact upon, or arise in connection with Causes of Action of the Debtors (but excluding Avoidance Actions) commenced by the Disbursing Agent, the Debtors or any third parties, as applicable, before or after the Effective Date;

(xiv) To enter an order or final decree closing the Chapter 11 Case;

(xv) To issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any Person with consummation, implementation or enforcement of the Plan or the Confirmation Order;

(xvi) To enter any and all appropriate orders necessary to effectuate and otherwise enforce the Implementation Order; and

(xvii) To hear and determine any other matters related hereto and not inconsistent with the Bankruptcy Code.

ARTICLE XIII.

MISCELLANEOUS PROVISIONS

13.1.  Payment of Statutory Fees.

All fees payable pursuant to section 1930 of title 28 of the United States Code, as determined by the Bankruptcy Court at the Confirmation Hearing, shall be paid by the Debtors on or before the Effective Date.

From and after the Effective Date, the Debtors shall pay the fees assessed under section 1930 of title 28 of the United States Code until entry of an order closing the Chapter 11 Cases.

13.2.  Satisfaction of Claims.

The rights afforded in the Plan and the treatment of all Claims and Equity Interests herein shall be in exchange for and in complete satisfaction, discharge, and release of all Claims and Equity Interests of any nature whatsoever, including any accrued Post-Petition Interest, against the Debtors and the Debtors in Possession, or any of their Estates, Assets, properties, or interests in property. Except as otherwise provided herein, on the Effective Date, all Claims against and Equity Interests in the Debtors and the Debtors in Possession shall be satisfied, discharged, and released in full. Neither the Reorganized GSI Entities nor the Debtors shall be responsible for

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any pre-Effective Date obligations of the Debtors or the Debtors in Possession, except those expressly assumed by the Reorganized GSI Entities or any such Debtor, as applicable. Except as otherwise provided herein, all Persons shall be precluded and forever barred from asserting against the Reorganized GSI Entities, the Debtors, their respective successors or assigns, or their Estates, Affiliates, Assets, properties, or interests in property any event, occurrence, condition, thing, or other or further Claims, Equity Interests or Causes of Action based upon any act, omission, transaction, or other activity of any kind or nature that occurred or came into existence prior to the Effective Date, whether or not the facts of or legal bases therefore were known or existed prior to the Effective Date.

13.3.  Special Provisions Regarding Insured Claims.

Plan Distributions to each holder of an allowed Insured Claim against any Debtor shall be in accordance with the treatment provided under the Plan for the Class in which such Allowed Insured Claim is classified; provided, however, that there shall be deducted from any Plan Distribution on account of an Insured Claim, for purposes of calculating the Allowed amount of such Claim, the amount of any insurance proceeds actually received by such holder in respect of such Allowed Insured Claim. Nothing in this Section 13.3 shall constitute a waiver of any claim, right, or Cause of Action the Debtors or their Estates may hold against any Person, including any insurer. Pursuant to section 524(e) of the Bankruptcy Code, nothing in the Plan shall release or discharge any insurer from any obligations to any Person under applicable law or any policy of insurance under which a Debtor is an insured or beneficiary.

13.4.  Subrogation.

To the extent the holder of an Allowed Guarantee Claim (other than Senior Note Claims) receives a Plan Distribution from a Guarantor Debtor and/or its Estate, and except as provided below, such Guarantor Debtor shall be subrogated to the rights of the holder of such Allowed Guarantee Claim to collect and receive a Plan Distribution on account of such Claim from the Obligor Debtor and/or its Estate under the Plan.

13.5.  Third Party Agreements; Subordination.

The Plan Distributions to the various classes of Claims and Equity Interests hereunder shall not affect the right of any Person to levy, garnish, attach or employ any other legal process with respect to such Plan Distributions by reason of any claimed subordination rights or otherwise. All such rights and any agreements relating thereto shall remain in full force and effect, except as otherwise compromised and settled pursuant to the Plan. Plan Distributions shall be subject to and modified by any Final Order directing distributions other than as provided in the Plan. The right of the Debtors or any Committee to seek subordination of any Claim or Equity Interest pursuant to section 510 of the Bankruptcy Code is fully reserved, and the treatment afforded any Claim or Equity Interest that becomes a Subordinated Claim or subordinated Equity Interest at any time shall be modified to reflect such subordination. Unless the Confirmation Order provides otherwise, no Plan Distributions shall be made on account of a Subordinated Claim or subordinated Equity Interest.

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13.6.  Exculpation.

None of the Released Parties shall have or incur any liability to any Person for any act or omission in connection with, or arising out of, the pursuit of confirmation of the Plan, the consummation of the Plan, the negotiation of the Plan Support Agreement, the New Indenture, the New Warrants, the New Senior Secured Notes, the Registration Rights Agreement and the Security Documents, or the implementation or administration of the Plan, the Plan Support Agreement or the property to be distributed under the Plan, except for any willful misconduct or gross negligence, as finally determined by the Bankruptcy Court, and, in all respects shall be entitled to rely upon the advice of counsel and all information provided by other exculpated persons herein without any duty to investigate the veracity or accuracy of such information with respect to their duties and responsibilities under the Plan, the negotiation of the Plan Support Agreement, the New Indenture, the New Warrants, the New Senior Secured Notes, the Registration Right Agreement and the Security Documents.

13.7.  Discharge of Liabilities.

Except as otherwise provided in the Plan, upon the occurrence of the Effective Date, the Debtors shall be discharged from all Claims, Equity Interests and Causes of Action to the fullest extent permitted by section 1141 of the Bankruptcy Code, and all holders of Claims and Equity Interests shall be precluded from asserting against the Reorganized GSI Entities and their Affiliates, the Debtors, their Assets, or any property dealt with under the Plan, any further or other Cause of Action based upon any act or omission, transaction, event, thing, or other activity of any kind or nature that occurred or came into existence prior to the Effective Date.

EXCEPT AS OTHERWISE PROVIDED IN THE PLAN, THE REORGANIZED GSI ENTITIES AND THEIR AFFILIATES SHALL NOT HAVE, AND SHALL NOT BE CONSTRUED TO HAVE OR MAINTAIN ANY LIABILITY, CLAIM OR OBLIGATION THAT IS BASED IN WHOLE OR IN PART ON ANY ACT, OMISSION, TRANSACTION, EVENT, OTHER OCCURRENCE OR THING OCCURRING OR IN EXISTENCE ON OR PRIOR TO THE EFFECTIVE DATE OF THE PLAN AND NO SUCH LIABILITIES, CLAIMS OR OBLIGATIONS FOR ANY ACTS SHALL ATTACH TO THE REORGANIZED GSI ENTITIES AND THEIR AFFILIATES.

13.8.  Discharge of Debtors.

Except as otherwise provided in the Plan or the Confirmation Order, on the Effective Date, without further notice or order, all Claims of any nature whatsoever shall be automatically discharged forever. Except as otherwise provided in the Plan or the Confirmation Order, on the Effective Date, the Debtors, their Estates and all successors thereto shall be deemed fully discharged and released from any and all Claims, including, but not limited to, demands and liabilities that arose before the Effective Date, and all debts of the kind specified in sections 502(g), 502(h), and 502(i) of the Bankruptcy Code, whether or not (a) a proof of claim based upon such debt is filed or deemed filed under section 501 of the Bankruptcy Code; (b) a Claim based upon such debt is allowed under section 502 of the Bankruptcy Code; or (c) the holder of a Claim based upon such debt has accepted the Plan. The Confirmation Order shall be a judicial

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determination of discharge of all liabilities of the Debtors, their Estates, and all successors thereto. As provided in section 524 of the Bankruptcy Code, such discharge shall void any judgment against the Debtors, their Estates or any successor thereto at any time obtained to the extent it relates to a discharged Claim, and operates as an injunction against the prosecution of any action against the Reorganized GSI Entities or property of the Debtors or their Estates to the extent it relates to a discharged Claim. Notwithstanding any language to the contrary contained in the Disclosure Statement, Plan and/or Confirmation Order, no provision shall preclude the U.S. Securities and Exchange Commission from enforcing its police or regulatory powers.

13.9.  Notices.

Any notices, requests, and demands required or permitted to be provided under the Plan, in order to be effective, shall be in writing (including, without express or implied limitation, by facsimile transmission), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when actually delivered or, in the case of notice by facsimile transmission, when received and telephonically confirmed, to each of the following persons and addressed as follows:

GSI Group Inc.

Attention: Sergio Edelstein, Chief Executive Officer

125 Middlesex Turnpike

Bedford, MA 01730

Telephone: (781) 266-5700

Facsimile: (781) 266-5114

Brown Rudnick LLP

Attention: William R. Baldiga, Esq.

One Financial Center

Boston, MA 02111

Telephone: (617) 856-8200

Facsimile: (617) 856-8201

Wilson Sonsini Goodrich & Rosati LLP

Attention: Robert D. Sanchez, Esq.

1700 K Street, NW

Fifth Floor

Washington, DC 20006

Telephone: (202) 973-8800

Facsimile: (202) 973-8899

Saul Ewing LLP

Attention: Mark Minuti, Esq.

222 Delaware Avenue, Suite 1200

P. O. Box 1266

Wilmington, DE 19899

Telephone: (302) 421-6840

Facsimile: (302) 421-5873

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13.10.  Headings.

The headings used in the Plan are inserted for convenience only, and neither constitutes a portion of the Plan nor in any manner affect the construction of the provisions of the Plan.

13.11.  Governing Law.

Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and the Bankruptcy Rules), the laws of the State of Delaware, without giving effect to the conflicts of laws principles thereof, shall govern the construction of the Plan and any agreements, documents, and instruments executed in connection with the Plan, except as otherwise expressly provided in such instruments, agreements or documents.

13.12.  Expedited Determination.

The Disbursing Agent is hereby authorized to file a request for expedited determination under section 505(b) of the Bankruptcy Code for all tax returns filed with respect to the Debtors.

13.13.  Exemption from Transfer Taxes.

Pursuant to section 1146 of the Bankruptcy Code, the issuance, transfer, or exchange of notes or equity securities under the Plan, the creation of any mortgage, deed of trust, lien, pledge or other security interest, the making or assignment of any lease or sublease, or the making or delivery of any deed or other instrument of transfer under, in furtherance of, or in connection with the Plan, shall not be subject to any stamp, real estate transfer, mortgage recording, or other similar tax.

13.14.  Retiree Benefits.

Pursuant to section 1129(a)(13) of the Bankruptcy Code, on and after the Effective Date, all retiree benefits (as that term is defined in section 1114 of the Bankruptcy Code), if any, shall continue to be paid in accordance with applicable law.

13.15.  Notice of Entry of Confirmation Order and Relevant Dates.

Promptly upon entry of the Confirmation Order, the Debtors shall publish as directed by the Bankruptcy Court and serve on all known parties in interest and holders of Claims and Equity Interests, notice of the entry of the Confirmation Order and all relevant deadlines and dates under the Plan, including, but not limited to, the deadline for filing notice of Administrative Claims, and the deadline for filing rejection damage Claims.

13.16.  Interest and Attorneys’ Fees.

(a) Interest accrued after the Petition Date will accrue and be paid on Claims only to the extent specifically provided for in this Plan, the Confirmation Order or as otherwise required by the Bankruptcy Court or by applicable law. No award or reimbursement of attorneys’ fees or related expenses or disbursements shall be allowed on, or in connection with, any Claim or Equity Interest, except as set forth in the Plan, the Plan Support Agreement or as ordered by the Bankruptcy Court.

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(b) All reasonable, due and unpaid fees, costs and expenses of (i) Schulte Roth & Zabel LLP, legal counsel for the Required Noteholders, (ii) local Delaware and Canadian legal counsel for the Required Noteholders and (iii) Houlihan Lokey Howard & Zukin Capital, Inc., financial advisor for the Required Noteholders, shall, in each case, be paid on the Effective Date in accordance with the Plan Support Agreement and the Indenture.

13.17.  Modification of the Plan.

Subject to the limitations set forth in the Plan Support Agreement, modifications of the Plan, as provided in section 1127 of the Bankruptcy Code may be proposed in writing by the Debtors at any time before confirmation, provided that the Plan, as modified, meets the requirements of sections 1122 and 1123 of the Bankruptcy Code, and the Debtors shall have complied with section 1125 of the Bankruptcy Code. Subject to the terms of the Plan Support Agreement, the Debtors may modify the Plan at any time after confirmation and before substantial consummation, provided that the Plan, as modified, meets the requirements of sections 1122 and 1123 of the Bankruptcy Code and the Bankruptcy Court, after notice and a hearing, confirms the Plan as modified, under section 1129 of the Bankruptcy Code, and the circumstances warrant such modifications. Subject to the terms of the Plan Support Agreement, a holder of a Claim or Equity Interest that has accepted the Plan shall be deemed to have accepted such Plan as modified if the proposed alteration, amendment or modification does not materially and adversely change the treatment of the Claim or Equity Interest of such holder. Nothing herein is intended to modify or alter the rights of the parties under the Plan Support Agreement and that any amendment, modification or supplement to the Plan may only be made in accordance with the terms of the Plan Support Agreement.

13.18.  Revocation of Plan.

The Debtors reserve the right to revoke or withdraw the Plan and/or to adjourn the Confirmation Hearing with respect to any one or more of the Debtors prior to the occurrence of the Effective Date. If the Debtors revoke or withdraw the Plan with respect to any one or more of the Debtors, or if the Effective Date does not occur as to any Debtor, then, as to such Debtor, the Plan and all settlements and compromises set forth in the Plan and not otherwise approved by a separate Final Order shall be deemed null and void and nothing contained herein and no acts taken in preparation for consummation of the Plan shall be deemed to constitute a waiver or release of any Claims against or Equity Interests in such Debtor or to prejudice in any manner the rights of any of the Debtors or any other Person in any other further proceedings involving such Debtor.

In the event that the Debtors choose to adjourn the Confirmation Hearing with respect to any one or more of the Debtors, the Debtors reserve the right to proceed with confirmation of the Plan with respect to those Debtors in relation to which the Confirmation Hearing has not been adjourned. With respect to those Debtors for which the Confirmation Hearing has been adjourned, the Debtors reserve the right to amend, modify, revoke or withdraw the Plan and/or submit any new plan of reorganization at such times and in such manner as they consider appropriate, subject to the provisions of the Bankruptcy Code.

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13.19.  Setoff Rights.

In the event that any Debtor has a Claim of any nature whatsoever against the holder of a Claim against such Debtor, then such Debtor may, but is not required to, set off against the Claim (and any payments or other Plan Distributions to be made in respect of such Claim hereunder) such Debtor’s Claim against such holder, subject to the provisions of sections 553, 556 and 560 of the Bankruptcy Code. Neither the failure to set off nor the allowance of any Claim under the Plan shall constitute a waiver or release of any Claims that any Debtor may have against the holder of any Claim.

13.20.  Compliance with Tax Requirements.

In connection with the Plan, the Debtors, the Disbursing Agent, as applicable, shall comply with all withholding and reporting requirements imposed by federal, state, local, and foreign taxing authorities and all Plan Distributions hereunder shall be subject to such withholding and reporting requirements. Notwithstanding the above, each holder of an Allowed Claim or Equity Interest that is to receive a Plan Distribution shall have the sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed by any government unit, including income, withholding and other tax obligations, on account of such Plan Distribution. The Disbursing Agent has the right, but not the obligation, to not make a Plan Distribution until such holder has made arrangements satisfactory to the Disbursing Agent for payment of any such tax obligations.

13.21.  Rates; Currency.

The Plan does not provide for the change of any rate that is within the jurisdiction of any governmental regulatory commission after the occurrence of the Effective Date. Where a Claim has been denominated in foreign currency on a proof of Claim, the Allowed amount of such Claim shall be calculated in legal tender of the United States based upon the conversion rate in place as of the Petition Date, and the amount of such Claim in legal tender of the United States’ as of the Petition Date shall be used for calculating Post-Petition Interest, if any.

13.22.  Injunctions.

On the Effective Date and except as otherwise provided herein, all Persons who have been, are or may be holders of Claims against or Equity Interests in the Debtors shall be permanently enjoined from taking any of the following actions against or affecting the Reorganized GSI Entities and their Affiliates, the Debtors, the Estates, the Assets or the Disbursing Agent, or any of their current or former respective members, directors, managers, officers, employees and agents and their respective professionals, successors and assigns or their respective assets and property, with respect to such Claims or Equity Interests (other than actions brought to enforce any rights or obligations under the Plan):

(a) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind (including, without limitation, all suits, actions and proceedings that are pending as of the Effective Date, which must be withdrawn or dismissed with prejudice);

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(b) enforcing, levying, attaching, collecting or otherwise recovering by any manner or means, whether directly or indirectly, any judgment, award, decree or order;

(c) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance; and

(d) asserting any setoff, right of subrogation or recoupment of any kind; provided, that any defenses, offsets or counterclaims which the Debtors may have or assert in respect of the above referenced Claims or Equity Interests are fully preserved in accordance with Section 13.19.

13.23.  Binding Effect.

The Plan shall be binding upon the Reorganized GSI Entities and their Affiliates, the Debtors, the holders of all Claims and Equity Interests, parties in interest, Persons and their respective successors and assigns. To the extent any provision of the Disclosure Statement or any other solicitation document may be inconsistent with the terms of the Plan, the terms of the Plan shall be binding and conclusive.

13.24.  Severability.

IN THE EVENT THE BANKRUPTCY COURT DETERMINES THAT ANY PROVISION OF THE PLAN IS UNENFORCEABLE EITHER ON ITS FACE OR AS APPLIED TO ANY CLAIM OR EQUITY INTEREST OR TRANSACTION, THE DEBTORS MAY MODIFY THE PLAN IN ACCORDANCE WITH SECTION 13.17 SO THAT SUCH PROVISION SHALL NOT BE APPLICABLE TO THE HOLDER OF ANY SUCH CLAIM OR EQUITY INTEREST OR TRANSACTION. SUCH A DETERMINATION OF UNENFORCEABILITY SHALL NOT (A) LIMIT OR AFFECT THE ENFORCEABILITY AND OPERATIVE EFFECT OF ANY OTHER PROVISION OF THE PLAN OR (B) REQUIRE THE RESOLICITATION OF ANY ACCEPTANCE OR REJECTION OF THE PLAN.

13.25.  No Admissions.

AS TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS AND OTHER CAUSES OF ACTION OR THREATENED CAUSES OF ACTIONS, THIS PLAN SHALL NOT CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, STIPULATION OR WAIVER, BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS. THIS PLAN SHALL NOT BE ADMISSIBLE IN ANY NON-BANKRUPTCY PROCEEDING NOR SHALL IT BE CONSTRUED TO BE CONCLUSIVE ADVICE ON THE TAX, SECURITIES AND OTHER LEGAL EFFECTS OF THE PLAN AS TO HOLDERS OF CLAIMS AGAINST, AND EQUITY INTERESTS IN, HOLDINGS OR ANY OF ITS SUBSIDIARIES AND AFFILIATES, AS DEBTORS AND DEBTORS IN POSSESSION IN THESE CHAPTER 11 CASES.

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Dated: January 6, 2010

Respectfully submitted, GSI Group Inc.
By:
Name:	Sergio Edelstein
Title:	President and Chief Executive Officer
GSI Group Corporation
By:
Name:	Sergio Edelstein
Title:	President and Chief Executive Officer
MES International, Inc.
By:
Name:	Sergio Edelstein
Title:	President and Chief Executive Officer

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EXHIBIT “A”

GLOSSARY OF DEFINED TERMS

1.	“Administrative Claim”	means a Claim incurred by a Debtor (or its Estate) on or after the Petition Date and before the Effective Date for a cost or expense of administration in the Chapter 11 Cases entitled to priority under sections 503(b) and 507(a)(1) of the Bankruptcy Code, including, without limitation, Fee Claims.
2.	“Affiliate”	means, with respect to any Person, all Persons that would fall within the definition assigned to such term in section 101(2) of the Bankruptcy Code, if such Person was a debtor in a case under the Bankruptcy Code.
3.	“Allowed”	when used with respect to any Claim, except for a Claim that is an Administrative Claim, means such Claim to the extent it is not a Contested Claim or a Disallowed Claim; (a) with respect to an Administrative Claim, means such Administrative Claim to the extent it has become fixed in amount and priority pursuant to the procedures set forth in Section 4.2(c) of this Plan; and (b) with respect to Equity Interests in any Debtor, means (i) the Equity Interests in any Debtor (except Holdings) as reflected in the stock transfer ledger or similar register of such Debtor as of the Effective Date; and (ii) with respect to Holdings, the issued and outstanding common shares in Holdings as reflected in the stock transfer ledger as of the Effective Date
4.	“Assets”	means, with respect to any Debtor, all of such Debtor’s right, title and interest of any nature in property of any kind, wherever located, as specified in section 541 of the Bankruptcy Code.
5.	“Avoidance Actions”	means all Causes of Action of the Estates that arise under chapter 5 of the Bankruptcy Code.
6.	“Bankruptcy Code”	means the Bankruptcy Reform Act of 1978, as codified at title 11 of the United States Code, as amended from time to time and applicable to the Chapter 11 Cases.

7.	“Bankruptcy Court”	means the United States Bankruptcy Court for the District of Delaware, or such other court having jurisdiction over the Chapter 11 Cases.
8.	“Bankruptcy Rules”	means the Federal Rules of Bankruptcy Procedure, as prescribed by the United States Supreme Court pursuant to section 2075 of title 28 of the United States Code and as applicable to the Chapter 11 Cases.
9.	“Bar Date Notice”	means the Notice of Establishment of Bar Date for Filing Proofs of Claim Against the Estates, as approved by the Bar Date Order.
10.	“Bar Date Order”	means the Order Pursuant to Bankruptcy Rule 3003(c) (i) Establishing a Bar Date for Filing Certain Proofs of Claim; (ii) Establishing Ramifications for Failure to Comply Therewith; (iii) Approving Proof of Claim Form and Notice of Bar Date; and (iv) Approving Notice and Publication Procedures.
11.	“Business Day”	means any day other than a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close for business in New York, New York.
12.	“Cash”	means legal tender of the United States of America or readily marketable direct obligations of, or obligations guaranteed by, the United States of America.
13.	“Cash Note Payment”	means, the result of (A) the aggregate amount of (i) $2.1 million plus (ii) $69,315 for each day following the Petition Date until the (x) Confirmation Date, if as of the date that is eleven (11) days after the Confirmation Date the Confirmation Order is not a Final Order and the Required Noteholders have not, as of such date, waived the condition set forth in Section 9.2(a) hereof, or (y) the Effective Date, if the Confirmation Order is a Final Order on the date that is eleven (11) days after the Confirmation Date; minus (B) the sum of (i) $2.1 million if the Petition Date is on or before November 20, 2009, and (ii) an additional $1 million if the Confirmation Date is within 100 days of the Petition Date.

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14.	“Causes of Action”	means all claims, rights, actions, causes of action, liabilities, obligations, suits, debts, remedies, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages or judgments, whether known or unknown, liquidated or unliquidated, fixed or contingent, matured or unmatured, foreseen or unforeseen, asserted or unasserted, arising in law, equity or otherwise.
15.	“Chapter 11 Cases”	means the cases commenced under chapter 11 of the Bankruptcy Code pending before the Bankruptcy Court with respect to each of the Debtors.
16.	“Claim”	means (a) any right to payment, whether or not such right is known or unknown, reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or (b) any right to an equitable remedy for breach of performance if such breach gives rise to a right of payment, whether or not such right to an equitable remedy is known or unknown, reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.
17.	“Claims Agent”	means the entity designated by order of the Bankruptcy Court to process proofs of claim.
18.	“Committee”	means any official committee appointed in the Chapter 11 Cases.
19.	“Confirmation Date”	means the date on which the Clerk of the Bankruptcy Court enters the Confirmation Order on the docket of the Bankruptcy Court.
20.	“Confirmation Hearing”	means the hearing held by the Bankruptcy Court, as it may be continued from time to time, to consider confirmation of the Plan.
21.	“Confirmation Order”	means the order of the Bankruptcy Court confirming the Plan.

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22.	“Contested”	(a) when used with respect to a Claim, means such Claim (i) to the extent it is listed in the Schedules as disputed, contingent, or unliquidated, in whole or in part, and as to which no proof of claim has been filed; (ii) if it is listed in the Schedules as undisputed, liquidated, and not contingent and as to which a proof of claim has been filed with the Bankruptcy Court, to the extent (A) the proof of claim amount exceeds the amount indicated in the Schedules, or (B) the proof of claim priority differs from the priority set forth in the Schedules, in each case as to which an objection was filed on or before the Objection Deadline, unless and to the extent allowed in amount and/or priority by a Final Order of the Bankruptcy Court; (iii) if it is not listed in the Schedules or was listed in the Schedules as disputed, contingent or unliquidated, in whole or in part, but as to which a proof of claim has been filed with the Bankruptcy Court, in each case as to which an objection was filed on or before the Objection Deadline, unless and to the extent allowed in amount and/or priority by a Final Order of the Bankruptcy Court; or (iv) as to which an objection has been filed on or before the Effective Date; provided, that a Claim that is fixed in amount and priority pursuant to the Plan or by Final Order on or before the Effective Date shall not be a Contested Claim; and (b) when used with respect to an Equity Interest, means such Equity Interest to the extent it is not reflected on the applicable Debtor’s stock transfer register as of the Effective Date or if at such time there is an objection pending to the allowance thereof.
23.	“Debtor”	means any of Holdings and its direct and indirect Subsidiaries that are debtors in the Chapter 11 Cases, including GSI and MES.
24.	“Disallowed”	when used with respect to a Claim, means a Claim, or such portion of a Claim, that has been disallowed by a Final Order.
25.	“Disbursing Agent”	means Reorganized Holdings or any agent selected by Reorganized Holdings, acting on behalf of the Debtors in (a) making the Plan Distributions contemplated under the Plan, the Confirmation Order, or any other relevant Final Order, and (b) performing any other act or task that is or may be delegated to the Disbursing Agent under the Plan.

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26.	“Disclosure Statement Order”	means the order entered by the Bankruptcy Court (a) approving the Disclosure Statement as containing adequate information required under section 1125 of the Bankruptcy Code, and (b) authorizing the use of the Disclosure Statement for soliciting votes on the Plan.
27.	“Disclosure Statement”	means the disclosure statement filed with respect to the Plan, as it may be amended, supplemented or otherwise modified from time to time, and the exhibits and schedules thereto.
28.	“Effective Date”	means a date selected by the Debtors which shall be a Business Day that is no later than ten (10) Business Days after all of the conditions specified in Section 9.2 have been satisfied or waived (to the extent waivable).
29.	“Equity Interest”	means any outstanding ownership interest in any of the Debtors, including, without limitation, interests evidenced by common or preferred stock, membership interests, options, warrants, restricted stock, restricted stock units or their equivalents, or other rights to purchase or otherwise receive any ownership interest in any of the Debtors and any right to payment or compensation based upon any such interest, whether or not such interest is owned by the holder of such right to payment or compensation.
30.	“Estate”	means the estate of any Debtor created by section 541 of the Bankruptcy Code upon the commencement of the Chapter 11 Cases.
31.	“Exchange Act”	Means the Securities Exchange Act of 1934, as amended and the rules and regulations of the Security and Exchange Commission promulgated thereunder.
32.	“Face Amount Minimum”	shall have the meaning ascribed to it in Section 7.8(b).
33.	“Fee Application”	means an application for allowance and payment of a Fee Claim (including any Claims for “substantial contribution” pursuant to section 503(b) of the Bankruptcy Code).
34.	“Fee Claim”	means a Claim of a Professional Person.

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35.	“Final Order”	means an order or judgment entered by the Bankruptcy Court or any other court of competent jurisdiction that has not been amended, modified or reversed, and as to which (a) no stay is in effect, (b) the time to seek rehearing, file a notice of appeal or petition for certiorari has expired and (c) no appeal, request for stay, petition seeking certiorari or other review is pending.
36.	“General Unsecured Claims”	means any Claim against a Debtor other than an Administrative Claim, a Tax Claim, a Priority Claim, a Secured Claim, an Intercompany Claim or a Note Claim.
37.	“GSI”	means GSI Group Corporation, a Michigan corporation
38.	“GSI Limited Holdings”	means GSI Limited Holdings Corporation, a company organized under the laws of the Province of New Brunswick, Canada, and direct wholly-owned subsidiary of Holdings.
39.	“GSI Limited Holdings II”	means GSI Limited Holdings II Corporation, a company organized under the laws of the Province of New Brunswick, Canada, and direct wholly-owned subsidiary of GSI Limited Holdings.
40.	“GSI UK”	means GSI Group Limited, a company organized under the laws of England and Wales and a wholly owned Subsidiary of Holdings, which upon the Effective Date shall become a wholly owned subsidiary of GSI Limited Holdings II.
41.	“GSI UK Note”	means the 12.94% promissory note issued by GSI to GSI UK dated as of July 25, 2008 in the amount of GBP12,500,000.
42.	“GSI UK Note Claim”	means the Claim against a Debtor arising pursuant to the GSI UK Note.
43.	“GSI UK Shares”	means all of the issued and outstanding shares of capital stock of GSI UK.
44.	“Guarantee Claim”	means a Claim against a Debtor arising pursuant to a guarantee of the obligations of any Obligor Debtor valid under applicable law.

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45.	“Guarantor Debtor”	means a Debtor that has guaranteed the obligations of any Obligor Debtor.
46.	“Holdings Common Shares”	means common shares of Holdings, no par value.
47.	“Holdings Equity Interest”	means an Equity Interest in Holdings, other than any such Equity Interest that is unexercised or unvested as of the Voting Record Date, but including treasury stock and all options, warrants, calls, rights, participation rights, puts, awards, commitments, Rights (including any Right not yet exercisable pursuant to the Shareholder Rights Plan) or any other agreements of any character to acquire such Equity Interest and shall also include any Claim subordinated pursuant to section 510(b) of the Bankruptcy Code arising from the rescission of a purchase or sale of any Equity Interest or rights relating to any Equity Interest, or any Claim for damages arising from the purchase or sale of any Equity Interest, including, in each case, common shares of Holdings or any Claim for reimbursement, contribution, or indemnification arising from or relating to any such Claims.
48.	“Holdings”	means GSI Group Inc., a company continuing to be organized under the laws of the Province of New Brunswick, Canada.
49.	“Implementation Order”	means a Final Order, in form and substance satisfactory to the Debtors, which provides the terms and provisions set forth in Section 9.1(a).
50.	“Indenture Trustee”	means the indenture trustee under the New Indenture
51.	“Insured Claim”	means any Claim against a Debtor for which the Debtor is entitled to indemnification, reimbursement, contribution or other payment under a policy of insurance wherein a Debtor is an insured or beneficiary of the coverage of any of the Debtors.
52.	“Integral Multiples”	shall have the meaning ascribed to it in Section 7.8(b).

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53.	“Intercompany Claim”	means a Claim held by any Debtor against any other Debtor based on any fact, action, omission, occurrence or thing that occurred or came into existence prior to the Petition Date. For avoidance of doubt, any Claim by a Debtor for subrogation pursuant to Section 13.4, and the Allowed GSI UK Note Claim shall not be deemed an Intercompany Claim for purposes of Plan Distributions or otherwise under this Plan.
54.	“Internal Revenue Code”	means the Internal Revenue Code of 1986, as amended, and any applicable rulings, regulations (including temporary and proposed regulations) promulgated thereunder, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or the IRS.
55.	“IRS”	means the United States Internal Revenue Service.
56.	“MES”	means MES International, Inc., a Delaware corporation and a wholly owned subsidiary of MicroE Systems, Inc., a wholly owned subsidiary of GSI.
57.	“New $1.10 Warrants	means warrants for a number of New Common Shares equal to 10% of 110% of the Outstanding Capital Stock of Reorganized Holdings. The New $1.10 Warrants shall be substantially in the form filed with the Bankruptcy Court as a Plan Document.
58.	“New $2.00 Warrants	means warrants for a number of New Common Shares equal to 10% of 110% of the Outstanding Capital Stock of Reorganized Holdings. The New $2.00 Warrants shall be substantially in the form filed with the Bankruptcy Court as a Plan Document.
59.	“New Common Shares”	means common shares of Reorganized Holdings.
60.	“New Indenture”	means the Indenture to be dated on or about the Effective Date and to be entered into between Reorganized GSI, as Issuer, Reorganized Holdings and each of the Subsidiary Guarantors, as guarantors and The Bank of New York Mellon Trust Company, N.A. as trustee, providing for the issuance of New Senior Secured Notes. The New Indenture shall be substantially in the form filed with the Bankruptcy Court as a Plan Document.

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61.	“New Senior Secured Notes”	means new senior secured notes of Reorganized GSI in the form attached to the New Indenture to be issued on or about the Effective Date in a principal amount of $104,100,000. The New Senior Secured Notes shall mature January 15, 2014 and have a coupon of 12.25% if paid in cash or 13.00% if paid in kind. The New Senior Secured Notes and the New Indenture shall be substantially in the form filed with the Bankruptcy Court as a Plan Document.
62.	“New Warrants”	means the New $1.10 Warrants and the New $2.00 Warrants.
63.	“Note Claims”	means the Senior Note Claims and the GSI UK Note Claims.
64.	“Noteholders”	means the holders of the Senior Notes.
65.	“Notice of Confirmation”	means the notice of entry of the Confirmation Order to be filed with the Bankruptcy Court and mailed by the Claims Agent to holders of Claims and Equity Interests.
66.	“Objection Deadline”	means the deadline for filing objections to Claims as set forth in Section 8.1 of the Plan.
67.	“Obligor Debtor”	means any Debtor that is the primary obligor of any obligations guaranteed by another Debtor.
68.	“Outstanding Capital Stock of Reorganized Holdings”	means the total number of New Common Shares issued pursuant to this Plan but excluding issuances upon exercise of the New Warrants and in connection with any management incentive plan.
69.	“Person”	means an individual, corporation, partnership, limited liability company, joint venture, trust, estate, unincorporated association, unincorporated organization, governmental entity, or political subdivision thereof, or any other entity.
70.	“Petition Date”	means, with respect to any Debtor, the date on which the Chapter 11 Case of such Debtor was commenced.

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71.	“Plan Distribution Date”	means (a) with respect to any Claim, (i) the Effective Date or a date that is as soon as reasonably practicable after the Effective Date, if such Claim is then an Allowed Claim, or (ii) a date that is as soon as reasonably practicable after the date such Claim becomes Allowed, if not Allowed on the Effective Date, and (b) with respect to any Equity Interest, the Effective Date or a date that is as soon as reasonably practicable after the Effective Date.
72.	“Plan Distribution”	means the payment or distribution under the Plan of Cash, Assets, securities or instruments evidencing an obligation under the Plan to the holder of an Allowed Claim or Allowed Equity Interest.
73.	“Plan Documents”	means the documents that aid in effectuating the Plan as specifically identified as such herein and filed with the Bankruptcy Court as specified in Section 1.5 of the Plan including, without limitation those listed on Exhibit B hereto.
74.	“Plan Supplement”	means the supplement or supplements to the Plan containing certain documents relevant to the implementation of the Plan or the treatment of the Allowed Claims and Equity Interest thereunder (including without limitation the Plan Documents).
75.	“Plan Support Agreement”	means that certain plan support agreement, by and among the Debtor, and the Noteholders. The Plan Support Agreement will be filed with the Bankruptcy Court as a Plan Document.
76.	“Plan”	means this chapter 11 plan, either in its present form or as it may be amended, supplemented or otherwise modified from time to time, and the exhibits and schedules hereto, as the same may be in effect at the time such reference becomes operative.
77.	“Post-Effective Date Fully Diluted Capital Stock of Reorganized Holdings”	means the total number of New Common Shares issued pursuant to this Plan and all New Common Shares issuable upon the exercise of the New Warrants and all New Common Shares issuable in connection with any management incentive plan.

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78.	“Post-Confirmation Interest”	means simple interest on an Allowed Claim at the rate payable on federal judgments as of the Effective Date or such other rate as the Bankruptcy Court may determine at the Confirmation Hearing is appropriate, such interest to accrue from the Plan Distribution Date applicable to a Claim to the date of actual payment with respect to such Claim.
79.	“Post-Petition Interest”	means with respect to: (a) Secured Claims, unpaid interest accruing on such claims from the Petition Date through the Effective Date at the non-default rate set forth in the contract or other applicable document giving rise to such claims; (b) Tax Claims, interest at the non-penalty rate set forth in the applicable state or federal law governing such Claims from the Petition Date through the Effective Date; (c) Priority Claims and General Unsecured Claims, interest from the Petition Date through the Effective Date at (i) the non-default rate set forth in the contract or other applicable document giving rise to such claims, or (ii) such interest, if any, as otherwise agreed to by the holder of such Claim and the applicable Debtor, or (iii) any other applicable rate of interest required to unimpair such Claim, as may be determined by the Bankruptcy Court; and (d) Claims other than as listed in (a) through (c) herein, interest at 0%. Notwithstanding the foregoing, Post-Petition Interest as it relates to a particular Allowed Claim shall (i) be considered to be $0.00 for distribution purposes under Article III or Article IV if the amount of relevant Allowed Claim already includes Post-Petition Interest so as to avoid a duplicate distribution of Post-Petition Interest, (ii) be reduced by the amount of Post-Petition Interest paid on such Claim during the pendency of the Chapter 11 Cases so as to avoid a duplicate distribution of Post-Petition Interest and (iii) only include interest accruing on such Claim through the earlier of the Effective Date or the date payment was made in the event payment on a Claim was made prior to the Effective Date.

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80.	“Priority Claim”	means any Claim to the extent such Claim is entitled to priority in right of payment under section 507(a) of the Bankruptcy Code, other than Secured Claims, Administrative Claims, and Tax Claims.
81.	“Pro Rata Share”	means the proportion that an Allowed Claim or Equity Interest bears to the aggregate amount of all Claims or Equity Interests in a particular class, including Contested Claims or Equity Interests, but excluding Disallowed Claims, (a) as calculated by the Disbursing Agent; or (b) as determined or estimated by the Bankruptcy Court.
82.	“Professional Person”	means a Person retained or to be compensated for services rendered or costs incurred on or after the Petition Date and on or prior to the Effective Date pursuant to sections 327, 328,329, 330, 331, 503(b), or 1103 of the Bankruptcy Code in the Chapter 11 Case.
83.	“Registration Rights Agreement”	means a Registration Rights Agreement by and between Reorganized Holdings and the holder of the GSI UK Note Claim, pursuant to which such holders would have the right to require Reorganized Holdings to effect registered secondary offerings of such holders’ New Common Shares on terms and conditions to be negotiated and reflected in such Registration Rights Agreement, provided there shall be no more than two demand registration rights. The Registration Rights Agreement will be filed with the Bankruptcy Court as a Plan Document.
84.	“Released Parties”	means, collectively, (a) the Debtors, the Reorganized GSI Entities, (b) each Noteholder, in its capacity as such, (c) each indenture trustee under the Senior Notes Indenture, and (d) with respect to each of the foregoing entities in clauses (a) through (c), such person’s current and former affiliates, predecessors, successors in interest, parent entities, subsidiaries, attorneys, accountants, officers, partners, managers, directors, principals, members, equity holders, partners, employees, agents, investment bankers, auditors, restructuring and other consultants, financial advisors (including any firm that provided fairness opinions or similar advice to the Debtors or their boards of directors as to the transactions effectuated by this Plan) and other professionals, in each case in their capacity as such.

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85.	“Required Noteholders”	has the meaning set forth in the Plan Support Agreement.
86.	“Reorganized GSI Entities”	means Reorganized Holdings, together with its affiliated Debtors as reorganized.
87.	“Reorganized GSI”	means GSI, on or after the Effective Date, and as renamed Excel Technology Corporation as of or about the Effective Date.
88.	“Reorganized Holdings”	means Holdings, on or after the Effective Date, to be renamed Excel Technology, Inc. as of the Effective Date.
89.	“Reorganized Holdings Constituent Documents”	means the articles of reorganization of Reorganized Holdings and each of its affiliated Debtors, as amended or amended and restated as of the Effective Date, among other things, to (a) prohibit the issuance of non-voting equity securities by such Debtor as required by section 1123(a)(6) of the Bankruptcy Code, and (b) otherwise give effect to the provisions of this Plan. The Reorganized Holdings Constituent Documents shall be in substantially the form filed with the Bankruptcy Court as Plan Documents.
90.	“Reorganized MES”	means MES, on or after the Effective Date.
91.	“Rights”	means the rights issued under the Shareholder Rights Plan.
92.	“Schedules”	means the schedules of assets and liabilities and list of Equity Interests and the statements of financial affairs filed by each of the Debtors with the Bankruptcy Court, as required by section 521 of the Bankruptcy Code and in conformity with the Official Bankruptcy Forms of the Bankruptcy Rules, as such schedules and statements have been or may be amended or supplemented by the Debtors in Possession from time to time in accordance with Bankruptcy Rule 1009.

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93.	“Secured Claim”	means (a) a Claim secured by a lien on any Assets, which lien is valid, perfected, and enforceable under applicable law and is not subject to avoidance under the Bankruptcy Code or applicable non-bankruptcy law, and which is duly established in the Chapter 11 Cases, but only to the extent of the value of the holder’s interest in the collateral that secures payment of the Claim; (b) a Claim against the Debtors that is subject to a valid right of recoupment or setoff under section 553 of the Bankruptcy Code, but only to the extent of the Allowed amount subject to recoupment or setoff as provided in section 506(a) of the Bankruptcy Code; and (c) a Claim deemed or treated under the Plan as a Secured Claim; provided, that, to the extent that the value of such interest is less than the amount of the Claim which has the benefit of such security, the unsecured portion of such Claim shall be treated as a General Unsecured Claim unless, in any such case the class of which Claim is a part makes a valid and timely election in accordance with section 1111(b) of the Bankruptcy Code to have such Claim treated as a Secured Claim to the extent Allowed.
94.	“Securities Act”	means the Securities Act of 1933, as amended and the rules and regulations of the Security and Exchange Commission promulgated thereunder.
95.	“Securities Class Action”	means that certain putative shareholder class action entitled Wiltold Trzeciakowski, Individually and on behalf of all others similarly situated v. GSI Group Inc., Sergio Edelstein, and Robert Bowen, Case No. 08-cv-12065 (GAO), filed on December 12, 2008, in the United States District Court for the District of Massachusetts in connection with the delayed filing of its results for the quarter ended September 26, 2008, and the announcement of a review of revenue transactions, alleging federal securities violations against Holdings and certain of Holdings’ current and former officers and directors.
96.	“Security Agreement”	means the Security Agreement to be executed and delivered by Reorganized Holdings, Reorganized GSI and each Subsidiary Guarantor, substantially in the form attached to the New Indenture and filed as a Plan Document.

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97.	“Security Documents”	means (a) the Security Agreement, (b) all other security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, control agreements or other grants or transfer of security, creating (or purporting to create) a lien upon the collateral as contemplated by the New Indenture and the Security Agreement, (c) fee mortgages, title policies and other real estate-related documentation customarily requested by secured lenders lending directly against real estate assets and as may be reasonably requested by the Required Noteholders, (d) leasehold mortgages (as reasonably requested by the Required Noteholders and which Reorganized Holdings shall use commercially reasonable efforts to obtain) or, if determined by the Required Noteholders in lieu of one or more leasehold mortgages, landlord waivers, which Reorganized Holdings shall use commercially reasonable efforts to obtain, in each case in form and substance reasonably acceptable to the Required Noteholders, and (e) “Phase I” environmental reports on real estate owned by Reorganized Holdings, Reorganized GSI and the Subsidiary Guarantors as reasonably requested by the Required Noteholders, provided any favorable or unfavorable results of such a report shall not be a condition precedent to the issuance of the New Senior Secured Notes. or to the occurrence to the Effective Date pursuant to Section 9.2 hereof.
98.	“Senior Note Claim”	each Claim of a Noteholder against Holdings and GSI and/or any Guarantee Claim with respect to the Senior Notes arising under or evidenced by the Senior Notes or the Indenture for the Senior Notes and related documents. Each Noteholder shall have a single Senior Note Claim on account of each Senior Note, which Claim shall encompass and include all Guarantee Claims as to such Senior Note.
99.	“Senior Notes”	Means those certain 11% Senior Subordinated Notes due 2013 issued by GSI and guaranteed by Holdings and certain Subsidiaries, governed by the Senior Note Indenture.

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100.	“Senior Notes Indenture”	means that certain Indenture dated August 20, 2008 as such Indenture has been supplemented by the First Supplemental Indenture, dated as of August 25, 2008 and the Second Supplemental Indenture, dated as of March 5, 2009.
101.	“Shareholder Rights Plan”	means that certain Shareholder rights Plan, dated April 22, 2005, by and between Holdings and Computershare Trust Company of Canada, as Rights Agent.
102.	“Subordinated Claim”	means a Claim (other than a Note Claim) against any Debtor subordinated by a Final Order.
103.	“Subsidiary”	means any entity of which Holdings owns directly or indirectly more than fifty percent (50%) of the outstanding capital stock or membership interests.
104.	“Subsidiary Guarantors”	means, collectively, Cambridge Technology, Inc., Continuum Electro-Optics, Inc., Control Laser Corp. (d/b/a Baublys Control Laser), Excel Technology, Inc. (as it may be renamed as of or about the Effective Date), MicorSystems Corp, Reorganized MES, The Optical Corp., Photo Research, Inc., Quantronix Corp. and Synrad, Inc.
105.	“Tax Claim”	means a Claim against any of the Debtors that is of a kind specified in section 507(a)(8) of the Bankruptcy Code.
106.	“Voting Record Date”	means the record date for voting on the Plan established by order of the Bankruptcy Court.

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EXHIBIT B

Plan Documents

Articles of Reorganization of Reorganized Holdings

New $1.10 Warrant

New $2.00 Warrant

New Indenture and New Senior Secured Notes

Plan Support Agreement

Registration Rights Agreement

Security Agreement

EXHIBIT “C”

Projections

GSI Group Inc.

Consolidated Balance Sheet Projections

Unaudited - Before Restatement and Asset Impairment Charges

(in thousands)	2009		2010		2011		2012		2013
ASSETS
Current Assets
Cash	$	53,436	$	46,703	$	50,014	$	50,032	$	50,020
Cash Equivalents		509		509		509		509		509
Accounts Receivable, Net of Allowances		44,202		48,199		53,201		57,127		56,502
Income Tax Receivable		15,292		11,292		11,292		11,292		11,292
Inventories		67,567		66,795		66,427		66,120		67,451
Deferred Tax Asset		11,107		11,107		11,107		11,107		11,107
Other Current Assets		4,681		4,681		4,681		4,681		4,681
Total Current Assets		196,793		189,286		197,231		200,867		201,562
PP&E		53,891		47,137		41,031		35,571		30,759
Deferred Tax Asset		18,079		18,079		18,079		18,079		18,079
Other Assets		6,049		1,347		1,347		1,347		1,347
Long-term Investments		10,920		10,920		10,920		10,920		10,920
Net Intangibles and Goodwill		308,746		289,836		270,925		252,015		233,105
Total Assets	$	594,478	$	556,605	$	539,533	$	518,800	$	495,772
LIABILITIES & STOCKHOLDER EQUITY
Current Liabilities
Accounts Payable	$	14,681	$	17,500	$	20,832	$	22,719	$	23,462
Accrued Expenses		27,890		22,006		22,371		22,828		23,285
Total Current Liabilities		42,570		39,506		43,203		45,546		46,746
Long Term Debt		188,837		95,000		80,100		50,500		11,750
Deferred Tax Liabilities		59,092		59,092		59,092		59,092		59,092
Other Long Term Liabilities		15,492		15,492		15,492		15,492		15,492
Total Liabilities		305,992		209,090		197,887		170,630		133,080
Total Stockholders’ Equity		288,486		347,515		341,647		348,170		362,691
Total Liabilities and Stockholders’ Equity	$	594,478	$	556,605	$	539,533	$	518,800	$	495,772

See Accompanying Notes to the Consolidated Financial Statement Projections

GSI Group Inc.

Consolidated Income Statement Projections

Unaudited - Before Restatement and Asset Impairment Charges

(in thousands)	2009			2010			2011			2012			2013
Sales	$	214,233		$	251,636		$	294,104		$	322,591		$	334,140
Cost of Sales		134,269			158,636			182,355			197,002			201,744
Gross Margin		79,963			93,000			111,749			125,588			132,396
% of Revenue		37.3	%		37.0	%		38.0	%		38.9	%		39.6	%
Operating Expenses:
Research and Development		27,532			29,472			30,834			32,140			32,943
Sales and Marketing		32,296			34,554			36,261			38,246			39,008
General and Administrative		27,698			20,770			21,456			22,313			22,744
Amortization of Intangibles		18,902			18,910			18,910			18,910			18,910
Total Operating Expenses		106,428			103,706			107,462			111,609			113,606
Adjusted Operating Income		(26,464	)		(10,706	)		4,287			13,979			18,790
Add-backs:
SFAS 123R		2,454			0			0			0			0
Amortization of intangibles		18,902			18,910			18,910			18,910			18,910
Depreciation		9,191			9,254			9,273			9,293			9,313
Adjusted EBITDA		4,083			17,458			32,471			42,182			47,013
Non-Recurring:
Restructuring / Investigation / Restatement Costs		27,526			11,465			0			0			999
Operating Profit		(53,990	)		(22,171	)		4,287			13,979			17,791
Other (Income) / Expense:
Interest and Other (Income) / Expense		(1,777	)		(792	)		(569	)		(543	)		(544	)
Interest Expense		25,225			8,728			10,725			7,999			3,813
Income Before Taxes		(77,438	)		(30,107	)		(5,868	)		6,523			14,522
Tax Expense / (Benefit)		328			0			0			0			0
Net Income / (Loss)		($77,767	)		($30,107	)		($5,868	)	$	6,523		$	14,522

See Accompanying Notes to the Consolidated Financial Statement Projections

GSI Group Inc.

Consolidated Cash Flow Projections

Unaudited - Before Restatement and Asset Impairment Charges

(in thousands)	2009			2010			2011			2012			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income / (Loss)		($77,767	)		($30,107	)		($5,868	)	$	6,523		$	14,522
Adjustments to Reconcile Net Income / (Loss) to Net
Depreciation & Amortization		28,093			28,164			28,183			28,203			28,223
Stock Based Compensation		2,454			0			0			0			0
Changes in Assets and Liabilities:
Accounts Receivable		7,202			(3,997	)		(5,001	)		(3,926	)		625
Inventory		9,136			772			368			307			(1,331	)
Other Current Assets		8,598			4,000			0			0			0
Accounts Payable		(11,986	)		2,819			3,332			1,887			743
Accrued Expenses		628			(5,884	)		365			457			457
Net Cash Provided by Operating Activities		(33,641	)		(4,233	)		21,378			33,451			43,238
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Property, Plant and Equipment		(1,695	)		(2,500	)		(3,167	)		(3,833	)		(4,500	)
Proceeds from Sale of Auction Rate Securities		16,670			0			0			0			0
Proceeds from Sale of Rugby UK Building		3,100			0			0			0			0
Net Cash Used by Investing Activities		18,075			(2,500	)		(3,167	)		(3,833	)		(4,500	)
CASH FLOWS FROM INVESTING ACTIVITIES
Principal Payments on Long-term Debt		0			0			(14,900	)		(29,600	)		(38,750	)
Net Cash Used by Investing Activities		0			0			(14,900	)		(29,600	)		(38,750	)
Net Increase / (Decrease) in Cash		(15,566	)		(6,733	)		3,311			17			(12	)
Cash & Cash Equivalents Beginning of Year		69,002			53,436			46,703			50,014			50,032
Cash & Cash Equivalents End of Year	$	53,436		$	46,703		$	50,014		$	50,032		$	50,020

See Accompanying Notes to the Consolidated Financial Statement Projections

Notes to the Condensed Consolidated Financial Statements

The Debtors developed the Projections contained herein based on the following assumptions, among others:

(a) The Projections assume emergence from the Chapter 11 Cases with a confirmed Plan on March 31, 2010.

(a) Restatement of Previously Issued Consolidated Financial Statements. Between December 4, 2008 and August 31, 2008, Holdings filed Current Reports on Form 8-K with the SEC that disclosed, among other things, that Holdings had identified errors related to the incorrect timing in the recognition of revenue from transactions in its Semiconductor Systems and Precision Technology business segments and that its previously issued interim and annual historical financial statements for 2008, 2007 and 2006 should not be relied upon. The majority of the errors related to multiple-element arrangements for which objective and reliable evidence of fair value did not exist for one or more of the undelivered elements. The Company is working diligently to complete the restatement of its previously issued interim and annual financial statements for fiscal years 2006, 2007 and 2008 (the “Restatements”). The actual results and Projections do not reflect the impact of the Restatements.

(a) Asset Impairment Charge. As a result of the decline in the Company’s businesses during the second half of 2008, the Company initiated an evaluation of the carrying value of its goodwill, intangible assets and fixed assets and determined that those assets had been impaired. The Company currently expects to record an impairment charge in the range of $205 million to $220 million in the fourth quarter of 2008. The actual results and Projections do not reflect the impact of the asset impairment.

(a) General Economic and Market Conditions. The Projections were prepared assuming that economic conditions in the markets served by the Debtors improve over the next five years from current economic conditions.

(a) Revenue. Revenue is generated from several product lines. The Projections assume that revenue grows at an 11.8% compounded annual growth rate over the five-year projection period as the Reorganized Company leverage their market presence during the economic recovery.

(a) Cost of Goods Sold. Cost of goods sold includes variable costs and fixed manufacturing expenses associated with product development such as direct materials, direct labor, inventory provisions, warranties and overhead. The Projections assume gross margins increase from 37.3% (2009) to 39.6% (2013) as the Reorganized Company realizes the benefit of increased revenues and the careful management of fixed costs.

(a) Operating Expenses. Operating expenses (“Opex”) include, but are not limited to, expenses such as sales and marketing, research and development, general and administrative expenses, depreciation of fixed assets and amortization of intangible assets. Opex excludes costs incurred in connection with the preparation and filing of the

Plan, the review and investigation of revenue transactions examined in connection with restatement of the Company’s previously issued financial statements and other non-recurring expenses. Opex is projected to increase from approximately $106.4 million (2009) to approximately $113.6 million (2013), a compounded annual growth rate of 1.6%, as the Reorganized Company expect to leverage the cost structure to maximize profitability.

(a) Interest Expense and Income. Interest expense represents the interest associated with the New Senior Secured Notes issued upon the Debtors’ emergence from bankruptcy. The Projections assume the New Senior Secured Notes pay interest at 12.25% per annum from 2010 to 2013. This interest rate assumes cash pay and could be increased to 13.0% per annum if Reorganized GSI elects to accrue interest. Cash held by the Reorganized Company is assumed to earn interest at 2.0% per annum. The Projections reflect payment of accrued pre-petition interest on the Senior Notes at plan effective date of approximately $6.2 million.

(a) Non Recurring Expenses. Non-recurring expenses represent one time expenses and include costs incurred in connection with the preparation and filing of the Plan, the review and investigation of revenue transactions examined in connection with restatement of the Company’s previously issued financial statements and other non-recurring expenses.

(a) Taxes. The Projections assume that the Reorganized Company will have no tax obligation as a result of current net operating losses. This assumption could vary significantly pending final tax analysis of the transaction.

(a) Capital Expenditures. The Projections include capital expenditures as estimated by the Company. Overall, projected annual capital expenditures as a percentage of revenues range from 0.8% to 1.3% during the period covered by the Projections.

(a) Sale of Rugby, UK Building. During the fourth quarter of fiscal 2009, the Company sold a building in Rugby, UK for net cash proceeds of approximately $3.1 million.

(a) Sale of Auction Rate Securities. During fiscal 2009, the Company sold Auction Rate Securities (“ARS”) for net cash proceeds of approximately $16.7 million. ARS with an estimated fair value of approximately $10.7 million are included in long-term investments on the Company’s consolidated balance sheet throughout the projection period.

(a) New Senior Secured Notes. Pursuant to the Plan, New Senior Secured Notes in the amount of $104.1 million maturing in 2014 will be issued to the holders of the Senior Notes and GSI UK Notes. Reorganized GSI has the option to pay interest on the New Senior Secured Notes at either 12.25% per annum in cash, or 13.0% paid in kind, depending on the ratio of earnings to fixed charges (as described in the New Indenture). In addition, the New Senior Secured Notes provide that an additional 2% interest paid in kind becomes payable if the Restatements are not completed within six months from the Reorganized Debtors’ emergence from the Chapter 11 Cases or if the common shares of

Reorganized Holdings cease to be listed on an eligible market after such six-month period and Holdings does not elect delist its common shares from such eligible market and deregister them under Section 12(g) of the Exchange Act. The Projections assume Reorganized GSI pays cash interest throughout the post emergence period. The New Senior Secured Notes will be secured by a first priority lien on 66 2/3% of the stock of Reorganized Holdings’ direct and indirect foreign subsidiaries and substantially all the other assets of Reorganized Holdings, Reorganized GSI and the Subsidiary Guarantors. In addition, payment of interest and principal on the New Senior Secured Notes will be guaranteed by Reorganized Holdings and the Subsidiary Guarantors. Due to the fact that the holder of the GSI UK Notes is wholly-owned foreign subsidiary, the note and resulting fees and interest associated with its pro-rata share is not reflected as debt or cash disbursements in the Projections of the Company as it is intercompany and eliminated in consolidation.

(a) Principal Payments on New Senior Secured Notes. Though not required under the terms of the New Senior Secured Notes, the Projections assume any cash balances in excess of $50 million are used to pre-pay outstanding principal of the New Senior Secured Notes.

EXHIBIT “D”

Liquidation Analysis

INTRODUCTION

Pursuant to section 1129(a)(7) of the Bankruptcy Code¹, each Holder of an impaired Claim or Equity Interest must either (a) accept the Plan or (b) receive or retain under the Plan property of a value, as of the Effective Date, that is not less than the value such non-accepting Holder would receive or retain if the Debtors were liquidated under chapter 7 of the Bankruptcy Code (often referred to as the “Best Interests Test”). In connection with this requirement, the following hypothetical liquidation analysis (the “Liquidation Analysis”) has been prepared so that the Bankruptcy Court may determine that the Plan is in the best interests of all classes impaired by the Plan.

THE LIQUIDATION ANALYSIS IS AN ESTIMATE OF THE PROCEEDS THAT MAY BE GENERATED AS A RESULT OF A HYPOTHETICAL CHAPTER 7 LIQUIDATION OF THE ASSETS OF THE DEBTORS AND NON-DEBTOR AFFILIATES. UNDERLYING THE LIQUIDATION ANALYSIS ARE A NUMBER OF ESTIMATES AND ASSUMPTIONS THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC, COMPETITIVE, AND OPERATIONAL UNCERTAINTIES AND CONTINGENCIES BEYOND THE CONTROL OF MANAGEMENT AND ITS ADVISORS. ADDITIONALLY, VARIOUS LIQUIDATION DECISIONS UPON WHICH CERTAIN ASSUMPTIONS ARE BASED ARE SUBJECT TO CHANGE. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE ASSUMPTIONS AND ESTIMATES EMPLOYED IN DETERMINING THE LIQUIDATION VALUES OF THE DEBTORS’ AND NON-DEBTOR AFFILIATES’ ASSETS WILL RESULT IN THE PROCEEDS WHICH WOULD BE REALIZED WERE THE DEBTORS AND NON-DEBTOR AFFILIATES TO UNDERGO AN ACTUAL LIQUIDATION, AND ACTUAL RESULTS COULD VARY MATERIALLY FROM THOSE SHOWN HERE. THIS ANALYSIS HAS NOT BEEN EXAMINED OR REVIEWED BY INDEPENDENT ACCOUNTANTS IN ACCORDANCE WITH STANDARDS PROMULGATED BY THE AICPA.

All amounts in the Liquidation Analysis are in 000s.

GENERAL ASSUMPTIONS

For purposes of this analysis, the Effective Date is assumed to be February 28, 2010. A summary of the assumptions used by management and its advisors in preparing the Liquidation Analysis follows.

¹ All capitalized terms used in this Liquidation Analysis that are not otherwise defined herein shall have the meanings ascribed to them in the Plan.

Asset Sale Methodology

The Liquidation Analysis assumes that the hypothetical chapter 7 liquidation is effected via the orderly sale of the businesses of the Debtors and Non-Debtor Affiliates as going concerns.

Estimates of Cost of Liquidation

Conversion of the Chapter 11 Cases to chapter 7 would likely result in additional costs to the Debtors’ estates. Costs of liquidation under chapter 7 of the Bankruptcy Code would include the compensation of a trustee and other professionals retained by the trustee, including attorneys and financial advisors; asset disposition expenses; all unpaid expenses incurred by the Debtors in the Chapter 11 Cases that are allowed in the chapter 7 cases; and Claims arising from the operations of the Debtors during the pendency of the Chapter 11 Cases.

In addition, liquidation costs could be higher, and the value of any distributions could be lower, if the chapter 7 cases were not completed within the four-month period assumed in the Liquidation Analysis. In the event that litigation were necessary to resolve claims asserted in the chapter 7 cases, any delay could be further prolonged and administrative expenses further increased. The effects of this potential delay on the value of distributions under the hypothetical liquidation have not been considered.

A summary of the assumptions used in the Liquidation Analysis is set forth below.

NOTE A – PROCEEDS FROM ORDERLY SALE OF BUSINESSES

The Liquidation Analysis assumes the businesses of the Debtors and Non-Debtor Affiliates would be sold as going concerns for cash in five transactions: 1) the all of the stock of operating entities held by the Debtors’ its wholly owned subsidiary, Excel Technologies, Inc., 2) the assets of the Debtors’ Thermal Printers Division, 3) the assets of the Debtors’ Semiconductor Systems Division, 4) the stock of the Debtors’ subsidiary Micro Encoders and 5) the assets of the GSI Group Ltd, a wholly owned UK subsidiary of the Debtors’. The proceeds from the sale of these businesses have been estimated utilizing discounted cash flows based on the Debtors’ five year business plan. A 20% discount on the estimated business values has been applied to reflect the likelihood that an expedited sale in chapter 7 would result in deterioration of business performance, as well as buyers offering discounted prices.

NOTE B – CASH & OPERATING CASH FLOW

Operating cash flow represents the cash flows during the time period in chapter 11 and chapter 7 proceedings.

Cash represents the estimate of cash available at December 31, 2009 in the Debtors and the corporate accounts of domestic Non-Debtor Affiliates. Cash in domestic and foreign operating subsidiaries is deemed normalized levels of operating cash and is assumed to be part of the sales of those businesses.

NOTE C – AUCTION RATE SECURITIES

The sale of Auction Rate Securities owned by a Non-Debtor Affiliate is assumed at the estimated fair market value of those securities as of December 31, 2009.

NOTE D – TAX REFUNDS

Estimated tax refunds receivable as a result of amended returns and carry-back claims.

NOTE E – COSTS ASSOCIATED WITH A CHAPTER 7 LIQUIDATION

The costs associated with a chapter 7 liquidation are assumed to include fees for the trustee(s) at 3% of estimated disbursements plus the cost of the trustee legal, financial and claims processing professionals. In addition, investment banker fees of 1.5% are assumed on the sale price of the businesses.

NOTE F – UK ADMINISTRATION

It is assumed that GSI Group, Inc.’s (one of the Non-Debtor Affiliates) assets will be sold through in an administration in the UK with a pre-negotiated sale as a going concern. Administration costs of $2.1 million are estimated for costs associated with an administrator, legal and other professionals. GSI Group, Ltd. has a defined benefit pension scheme. It is assumed a buyer would not assume the liability of that scheme. Therefore, the buy-out liability under that scheme would be triggered upon any sale. It is estimated that net value provided from the sale of the business plus a dividend received on intercompany claims due from the Debtor, GSI Group Corp., less the administrative costs would not be sufficient to cover an estimated $27 million pension deficit. As a result, only $20.4 million is estimated to be available to pay to the pension scheme.

NOTE G – CHAPTER 11 ADMINISTRATIVE CLAIMS

Administrative claims unpaid in the chapter 11 case.

NOTE H – DISTRIBUTIONS

Distributions on the Senior Note claim is made in accordance with direct claims and guarantees against Debtors and Non-Debtor Affiliates. Any remaining Senior Note balance after the distributions on account of Non-Debtor Affiliates are general unsecured claims against the GSI Group Corp. and GSI Group, Inc. estates and receives its pro-rata share of distributions from each estate. In addition to the Senior Note claim, General Unsecured Claims include trade claims, intercompany claims, rejection claims, etc. Additionally, distributions reflect distributions made on intercompany claims against GSI Group Corporate from other Debtors and Non-Debtor Affiliates.

MES International, Inc., et. al.

Liquidation Analysis

	Note
Estimated Value of Debtors and Debtors Affilliates	A	$	196,575
Less: Ch. 7 Distressed Sale Discount			(33,095	)
Estimated Value of Debtors and Non-Debtor Affilliates after Discount	A	$	163,480
Plus:
Operating Cash Flow during Proceeding	B		6,252
Retained Cash	B		39,600
Auction Rate Securities	C		10,700
Tax Refunds (Carryback Claims 2000-2005)	D		13,500
Estimated Value before Chapter 7 Costs, Chapter 11 Costs, Administrative Expenses and Claims		$	233,532
Less:
Chapter 7 Administrative Costs
- Trustee fees	E		(9,505	)
- Trustee professionals	E		(5,500	)
- Transaction Costs	E		(2,316	)
- Capital gains taxes on sale	E		(9,000	)
- Transfer taxes	E		(250	)
Total			(26,571	)
UK Administration Costs
- Administrator	F		(1,600	)
- Administrator professionals	F		(500	)
Total			(2,100	)
Chapter 11 Administrative Claims	G		(6,250	)
UK Pension Payment	F		(20,149	)
Japan Pension Payment			(1,500	)
Priority Claims (misc. taxes, etc.)			(1,000	)
Plus:
Intercompany Distribution from GSI Group Corp on Unsecured Claims	H		48,134
Estimated Recovery before Guarantee Claims Against Non-Debtor Affiliates			224,095
Distirbution to Senior Notes Guarantee Claim from Excel Technology Inc.	H		(112,979	)
Estimated Recovery for General Unsecured Claims of GSI Group Corp. & GSI Group Inc.		$	111,116
General Unsecured Claims on GSI Group Corp			282,472
Distribution to General Unsecured Claims on GSI Group Corp	H		(79,099	)
% Dividend			28	%
Estimated Recovery for General Unsecured Claims of GSI Group Inc.		$	32,016.95
Senior Note Claim on GSI Group, Inc.			74,288
Distribution to Senior Notes Guarantee Claim from GSI Group, Inc.	H		(32,017	)
% Dividend			43	%
Net Available for Equity			(0	)

EX-99.T3E.2

Exhibit 99T3E-2

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:	)	Chapter 11
	)
MES INTERNATIONAL, INC., et al., 1	)	Case No. 09-14109 (PJW)
	)
Debtors.	)	Jointly Administered
	)

GENERAL BALLOT FOR ACCEPTING OR REJECTING

THE DEBTORS’ CHAPTER 11 PLAN

CLASS 5 – NOTE CLAIMS

PLEASE READ AND FOLLOW THE ENCLOSED

VOTING INSTRUCTIONS CAREFULLY BEFORE COMPLETING THIS BALLOT.

PLEASE CHECK THE APPROPRIATE BOX BELOW

TO INDICATE YOUR ACCEPTANCE OR REJECTION OF THE PLAN.

THIS BALLOT IS ACCOMPANIED BY A PRE-ADDRESSED, POSTAGE PRE-PAID RETURN ENVELOPE THAT IS ADDRESSED TO THE GARDEN CITY GROUP, INC. (THE “SOLICITATION AGENT”). THIS BALLOT MUST BE RECEIVED BY THE SOLICITATION AGENT ON OR BEFORE FEBRUARY 15, 2010 AT 4:00 P.M. PREVAILING EASTERN TIME (THE “VOTING DEADLINE”). IF YOUR BALLOT IS NOT RECEIVED BY THE VOTING DEADLINE, THE DEBTORS MAY CONSIDER SUCH BALLOT INVALID. IF THE PLAN IS CONFIRMED BY THE BANKRUPTCY COURT, IT WILL BE BINDING ON YOU WHETHER OR NOT YOU VOTE.

This Ballot may not be used for any purpose other than submitting votes with respect to the First Modified Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Plan”). All capitalized terms used in this Ballot or in these instructions, but not otherwise defined herein, shall have the meaning ascribed to such terms in the Order Approving the Debtors’ Disclosure Statement and Relief Related Thereto (the “Solicitation Procedures Order”), the First Modified Disclosure Statement Accompanying the Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Disclosure Statement”), or Plan, as the case may be.

This Ballot is being sent to you because the Debtors’ records indicate that you are a Holder of a Class 5 Note Claim as of January 8, 2010 (the “Voting Record Date”), and accordingly, you are entitled to vote to accept or reject the Debtors’ Plan. Your rights are described in the Disclosure Statement and Plan. The Disclosure Statement, Plan,

¹ The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: MES International, Inc. (1964); GSI Group Inc. (0412); and GSI Group Corporation (9358). The Debtors’ headquarters is located at 125 Middlesex Turnpike, Bedford, MA 01730.

Solicitation Procedures Order and certain other materials contained in the Exhibits to the Plan are enclosed with this Ballot. These documents, along with the Exhibits to the Plan and all other Solicitation Documents, can be obtained by accessing the Debtors’ website at www.gsirestructuring.com or by requesting a copy from the Debtors’ Solicitation Agent by writing to The Garden City Group, Inc., Attn: MES International, Inc., et al., P.O. Box 9573, Dublin, OH 43017-4873, or by telephone at 1-866-249-8112.

The Bankruptcy Court has approved the Disclosure Statement as containing adequate information pursuant to section 1125 of the Bankruptcy Code. Bankruptcy Court approval of the Disclosure Statement does not indicate approval of the Plan by the Bankruptcy Court. If you believe you have received this Ballot in error, please contact the Solicitation Agent at the address or telephone number above.

You should carefully and thoroughly review the Disclosure Statement and the Plan before you vote. You may wish to seek legal advice concerning the Plan and the classification and treatment of your Note Claim under the Plan, which has been placed in Class 5. If you hold Claims or Equity Interests in more than one Class, you will receive a Ballot for each Class in which you are entitled to vote. You should return all Ballots for each Class in which you are entitled to vote. All persons or entities receiving a Ballot with respect to Class 5 Note Claims should return a completed Ballot in accordance with the instructions set forth therein.

PLEASE DELIVER YOUR BALLOT PROMPTLY.

IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT

OR THESE VOTING INSTRUCTIONS,

PLEASE CALL THE SOLICITATION AGENT AT 1-866-249-8112.

PLEASE BE ADVISED THAT THE SOLICITATION AGENT CANNOT AND WILL NOT PROVIDE LEGAL ADVICE WITH RESPECT TO THE DEBTORS’ SOLICITATION DOCUMENTS, INCLUDING THE DISCLOSURE STATEMENT AND PLAN.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY OTHER PERSON THE AGENT OF THE DEBTORS OR THE SOLICITATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE STATEMENTS CONTAINED IN THE DEBTORS’ SOLICITATION DOCUMENTS, INCLUDING THE DISCLOSURE STATEMENT AND PLAN.

2

VOTING INSTRUCTIONS

1. The Debtors are soliciting the votes of holders of Class 5 Note Claims and Class 6A Holdings Equity Interests with respect to the Debtors’ Plan. Your rights are described in the Disclosure Statement and Plan. The Disclosure Statement, Plan, Solicitation Procedures Order and Solicitation Procedures are included with this Ballot. These documents, along with the Exhibits to the Plan and all other Solicitation Documents, can be obtained by accessing the Debtors’ website at www.gsirestructuring.com or by requesting a copy from the Debtors’ Solicitation Agent by writing to The Garden City Group, Inc., Attn: MES International, Inc., et al., P.O. Box 9573, Dublin, OH 43017-4873, or by telephone at 1-866-249-8112. All capitalized terms used in the Ballot or in these instructions, but not otherwise defined herein, shall have the meaning ascribed to such terms in the Solicitation Procedures Motion, Disclosure Statement, or Plan, as the case may be.

2. Subject to certain exceptions, the Plan can be confirmed by the Bankruptcy Court and, therefore, made binding on all holders, if it is accepted by the holders of two-thirds (2/3) in amount and more than one-half (1/2) in number of Claims or Equity Interests, as the case may be, in each impaired Class voting on the Plan.

3. To ensure that your vote is counted, you must complete and return this Ballot as follows: (a) review the Disclosures and Certifications in Item 4 of the Ballot; (b) indicate your decision either to accept or reject the Plan in the boxes provided in Item 2 of the Ballot; and (c) sign and return the Ballot in the enclosed pre-addressed, postage pre-paid envelope so that it is ACTUALLY RECEIVED by the Solicitation Agent by the Voting Deadline, February 15, 2010 at 4:00 p.m. Prevailing Eastern Time.

4. If a Ballot is received after the Voting Deadline, it may not be counted. The method of delivery of a Ballot to the Solicitation Agent is at the election and risk of each entity. Except as otherwise provided herein, such delivery will be deemed made only when the original executed Ballot is ACTUALLY RECEIVED by the Solicitation Agent. Sufficient time should be allowed to assure timely delivery. Delivery of a Ballot by facsimile transmission, e-mail or any other electronic means will not be valid. This Ballot should not be sent to the Debtors, any of their agents (other than the Solicitation Agent), any indenture trustee (unless specifically instructed to do so) or the Debtors’ financial or legal advisors.

5. You must vote all of your Claims within a particular Plan Class either to accept or reject the Plan and may not split your vote. Accordingly, a Ballot that partially rejects and partially accepts the Plan will not be counted.

6. If multiple Ballots are received from you with respect to the same Claim prior to the Voting Deadline, the last Ballot timely received will be deemed to reflect your intent and will supersede and revoke any prior Ballot received.

7. The Ballot is not a letter of transmittal and may not be used for any purpose other than to vote to accept or reject the Plan.

8. This Ballot does not constitute, and shall not be deemed to be, a Proof of Claim or Equity Interest or an assertion or admission of a Claim or Equity Interest.

9. The following Ballots shall not be counted in determining the acceptance or rejection of the Plan: (a) any Ballot that is illegible or contains insufficient information to permit the identification of the creditor; (b) any Ballot cast by a person or entity that does not hold a Claim in a Class that is entitled to vote on the Plan; and (c) any unsigned Ballot.

3

10. Please be sure to sign and date your Ballot. If you are signing the Ballot as a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other entity acting in a fiduciary or representative capacity, you must indicate such capacity when signing and, if required or requested by the Solicitation Agent, the Debtors or the Bankruptcy Court, submit proper evidence satisfactory to the requesting party that you are authorized to so act on behalf of the Holder. In addition, please provide your name and mailing address if different from that set forth on the attached mailing label.

11. If you hold Claims or Equity Interests in more than one Class under the Plan, you will receive more than one Ballot coded for each different Class. Each Ballot votes only your Claims or Equity Interests indicated on that Ballot. Please complete and return each Ballot you receive.

12. If you believe you have received the wrong Ballot, please contact the Solicitation Agent immediately.

13. Unless otherwise directed by the Bankruptcy Court, delivery of a defective or irregular Ballot will not be deemed to have been made until such defect or irregularity has been cured or waived by the Debtors. Any waiver by the Debtors of defects or irregularities in any Ballot will be detailed in the Voting Report filed with the Bankruptcy Court by the Solicitation Agent. Neither the Debtors, nor any other person or entity, will be under any duty to provide notification of defects or irregularities with respect to delivered Ballots, nor will any of them incur any liability for failure to provide such notification.

THIS BALLOT MUST BE RETURNED AS FOLLOWS:

If by U.S. Postal Service:

THE GARDEN CITY GROUP, INC.

ATTN: MES INTERNATIONAL, INC., ET AL.

P.O. BOX 9573

DUBLIN, OH 43017-4873

PHONE: 1-866-249-8112

If by Overnight Mail or Hand Delivery:

THE GARDEN CITY GROUP, INC.

5151 BLAZER PARKWAY, SUITE A

DUBLIN, OH 43017

PHONE: 1-866-249-8112

THIS BALLOT MUST BE RETURNED SO AS TO BE RECEIVED

ON OR BEFORE FEBRUARY 15, 2010 AT 4:00 P.M.

PREVAILING EASTERN TIME,

OR YOUR VOTE MAY NOT BE COUNTED.

4

This Ballot is divided into two parts:

PART I. WHO SHOULD USE THIS BALLOT AND HOW TO USE THIS BALLOT

PART II. ITEMS ON THIS BALLOT

Item 1. Amount of Note Claim in Class 5

Item 2. Note Claims Vote

Item 3. Releases (Optional)

Item 4. Disclosures and Certifications

PART I. WHO SHOULD USE THIS BALLOT AND HOW TO USE THIS BALLOT

This Ballot is to be used by the Holders of Class 5 Note Claims. This Ballot may not be used for any purpose other than casting votes to accept or reject the Plan. This Ballot does not constitute, and shall not be deemed to be, a Proof of Claim or an assertion or admission of a Claim.

PLEASE READ AND FOLLOW THE INSTRUCTIONS ON THIS BALLOT CAREFULLY. THIS BALLOT IS ACCOMPANIED BY A PRE-ADDRESSED, POSTAGE PRE-PAID RETURN ENVELOPE. YOUR VOTE MUST BE RECEIVED BY THE SOLICITATION AGENT ON OR BEFORE THE VOTING DEADLINE, FEBRUARY 15, 2010 AT 4:00 P.M. PREVAILING EASTERN TIME.

PART II. ITEMS ON THIS BALLOT

Item 1. Amount of Note Claims in Class 5 under the Plan

a. The undersigned certifies that, as of the Voting Record Date, the undersigned was the Holder of a Class 5A Senior Note Claim in the amount of $                    .__.

-OR-

b. The undersigned certifies that, as of the Voting Record Date, the undersigned was the Holder of a Class 5B GSI UK Note Claim in the amount of $                    .__.

Item 2. Note Claims Vote

The Debtors recommend that you vote to accept the Plan.

The Holder of the Class 5 Note Claim set forth in Item 1 votes to (please check one):
ACCEPT THE PLAN CHECK HERE ¨	REJECT THE PLAN CHECK HERE ¨

5

ANY BALLOT WHICH INDICATES BOTH AN ACCEPTANCE AND A REJECTION OF THE PLAN OR DOES NOT INDICATE EITHER AN ACCEPTANCE OR REJECTION OF THE PLAN WILL NOT BE COUNTED.

A VOTE TO ACCEPT THE PLAN CONSTITUTES AN ACCEPTANCE AND CONSENT TO THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS SET FORTH IN ARTICLE VI AND ARTICLE XIII OF THE PLAN UNLESS YOU “OPT-OUT” OF SUCH RELEASES IN ITEM 3 BELOW. IN ADDITION, IF YOU ABSTAIN (CHOOSE NOT TO VOTE), SEE ITEM 3 BELOW. A VOTE TO REJECT THE PLAN INCLUDES A REJECTION OF ANY RELEASES SET FORTH IN THE PLAN.

PLEASE SEE ARTICLE VI, SECTION 6.19 AND ARTICLE XIII, SECTIONS 13.6, 13.7, 13.8 AND 13.22 OF THE PLAN FOR INFORMATION ABOUT THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS.

Item 3. Releases (Optional)

PURSUANT TO THE PLAN, IF YOU RETURN A BALLOT AND VOTE TO ACCEPT THE PLAN, YOU ARE AUTOMATICALLY DEEMED TO HAVE ACCEPTED THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS IN ARTICLE VI AND ARTICLE XIII OF THE PLAN. YOU ARE ALSO DEEMED TO HAVE ACCEPTED THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS IN ARTICLE VI AND ARTICLE XIII OF THE PLAN IF YOU DO NOT CAST A VOTE WITH RESPECT TO THE PLAN. HOWEVER, YOU MAY CHECK THE BOX BELOW TO REJECT SUCH RELEASE PROVISIONS IN THE PLAN.

¨ The undersigned elects not to grant the releases set forth in Article VI and Article XIII of the Plan.

Item 4. Disclosures and Certifications

Disclosures

(i) A Holder of a Claim or Equity Interest is required to cast the same vote within a particular Class on every Ballot completed by such Holder with respect to such Claim or Equity Interest;

(ii) Only the latest dated Ballot cast prior to the Voting Deadline with respect to the Class 5 Note Claim identified in Item 1 will be counted and, if any other Ballots have been cast with respect to such Class 5 Note Claim, such other Ballots will be deemed revoked;

(iii) (a) The Debtors have made available to all Holders of Claims or Equity Interests entitled to vote on the Plan or their authorized agents all of the Solicitation Documents and, (b) except for the Solicitation Documents, such Holders are not to have relied on any statement made or other information received from any person with respect to the Plan; and

6

(iv) All authority conferred or agreed to be conferred pursuant to this Ballot and every obligation of the undersigned hereunder shall be binding upon the transferees, successors, assigns, heirs, executors, administrators and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned.

Certifications

Upon execution of this Ballot, the Holder of the Class 5 Note Claim identified in Item 1 above certifies that:

(i) (a) as of the Voting Record Date, it was the Holder of the Class 5 Note Claim in the amount indicated in Item 1 or (b) it is an authorized signatory for an entity that was the Holder of the Class 5 Note Claim in the amount indicated in Item 1 as of the Voting Record Date;

(ii) it (or in the case of an authorized signatory, the Holder) is eligible to be treated as the Holder of the Class 5 Note Claim in the amount indicated in Item 1 for the purposes of voting on the Plan; and

(iii) it has reviewed and understands the disclosures in the section titled “Disclosures” immediately above.

Dated:	Name of Holder:
	Signature:
	By (if not Holder):
	Title (if appropriate):
	Telephone Number:
	Street Address:
	City, State and Zip Code:

¨ Please check here if the above address is a Change of Address that you would like reflected in the Master Mailing List for these Chapter 11 Cases.  

7

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:	)	Chapter 11
	)
MES INTERNATIONAL, INC., et al., 1	)	Case No. 09-14109 (PJW)
	)
Debtors.	)	Jointly Administered
	)

GENERAL BALLOT FOR ACCEPTING OR REJECTING

THE DEBTORS’ CHAPTER 11 PLAN

CLASS 6A – HOLDINGS EQUITY INTEREST

PLEASE READ AND FOLLOW THE ENCLOSED

VOTING INSTRUCTIONS CAREFULLY BEFORE COMPLETING THIS BALLOT.

PLEASE CHECK THE APPROPRIATE BOX BELOW

TO INDICATE YOUR ACCEPTANCE OR REJECTION OF THE PLAN.

THIS BALLOT IS ACCOMPANIED BY A PRE-ADDRESSED, POSTAGE PRE-PAID RETURN ENVELOPE THAT IS ADDRESSED TO THE GARDEN CITY GROUP, INC. (THE “SOLICITATION AGENT”). THIS BALLOT MUST BE RECEIVED BY THE SOLICITATION AGENT ON OR BEFORE FEBRUARY 15, 2010 AT 4:00 P.M. PREVAILING EASTERN TIME (THE “VOTING DEADLINE”). IF YOUR BALLOT IS NOT RECEIVED BY THE VOTING DEADLINE, THE DEBTORS MAY CONSIDER SUCH BALLOT INVALID. IF THE PLAN IS CONFIRMED BY THE BANKRUPTCY COURT, IT WILL BE BINDING ON YOU WHETHER OR NOT YOU VOTE.

This Ballot may not be used for any purpose other than submitting votes with respect to the First Modified Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Plan”). All capitalized terms used in this Ballot or in these instructions, but not otherwise defined herein, shall have the meaning ascribed to such terms in the Order Approving the Debtors’ Disclosure Statement and Relief Related Thereto (the “Solicitation Procedures Order”), First Modified Disclosure Statement Accompanying the Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Disclosure Statement”), or Plan, as the case may be.

This Ballot is being sent to you because the Debtors’ records indicate that you are a Holder of a Class 6A Holdings Equity Interest as of January 8, 2010 (the “Voting Record Date”), and accordingly, you are entitled to vote to accept or reject the Debtors’ Plan. Your rights are

¹ The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: MES International, Inc. (1964); GSI Group Inc. (0412); and GSI Group Corporation (9358). The Debtors’ headquarters is located at 125 Middlesex Turnpike, Bedford, MA 01730.

described in the Disclosure Statement and the Plan. The Disclosure Statement, Plan, Solicitation Procedures Order and certain other materials contained in the Exhibits to the Plan are enclosed with this Ballot. These documents, along with the Exhibits to the Plan and all other Solicitation Documents can be obtained by accessing the Debtors’ website at www.gsirestructuring.com or by requesting a copy from the Debtors’ Solicitation Agent by writing to The Garden City Group, Inc., Attn: MES International, Inc., et al., P.O. Box 9573, Dublin, OH 43017-4873, or by telephone at 1-866-249-8112.

The Bankruptcy Court has approved the Disclosure Statement as containing adequate information pursuant to section 1125 of the Bankruptcy Code. Bankruptcy Court approval of the Disclosure Statement does not indicate approval of the Plan by the Bankruptcy Court. If you believe you have received this Ballot in error, please contact the Solicitation Agent at the address or telephone number above.

You should carefully and thoroughly review the Disclosure Statement and the Plan before you vote. You may wish to seek legal advice concerning the Plan and the classification and treatment of your Holdings Equity Interest under the Plan, which has been placed in Class 6A. If you hold Claims or Equity Interests in more than one Class, you will receive a Ballot for each Class in which you are entitled to vote. You should return all Ballots for each Class in which you are entitled to vote. All persons or entities receiving a Ballot with respect to Class 6A Holdings Equity Interests should return a completed Ballot in accordance with the instructions set forth therein.

PLEASE DELIVER YOUR BALLOT PROMPTLY.

IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT

OR THESE VOTING INSTRUCTIONS,

PLEASE CALL THE SOLICITATION AGENT AT 1-866-249-8112.

PLEASE BE ADVISED THAT THE SOLICITATION AGENT CANNOT AND WILL NOT PROVIDE LEGAL ADVICE WITH RESPECT TO THE DEBTORS’ SOLICITATION DOCUMENTS, INCLUDING THE DISCLOSURE STATEMENT AND PLAN.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY OTHER PERSON THE AGENT OF THE DEBTORS OR THE SOLICITATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE STATEMENTS CONTAINED IN THE DEBTORS’ SOLICITATION DOCUMENTS, INCLUDING THE DISCLOSURE STATEMENT AND PLAN.

2

VOTING INSTRUCTIONS

1. The Debtors are soliciting the votes of holders of Class 5 Note Claims and Class 6A Holdings Equity Interests with respect to the Debtors’ Plan. Your rights are described in the Disclosure Statement and Plan. The Disclosure Statement, Plan, Solicitation Procedures Order and Solicitation Procedures are included with this Ballot. These documents, along with the Exhibits to the Plan and all other Solicitation Documents, can be obtained by accessing the Debtors’ website at www.gsirestructuring.com or by requesting a copy from the Debtors’ Solicitation Agent by writing to The Garden City Group, Inc., Attn: MES International, Inc., et al., P.O. Box 9573, Dublin, OH 43017-4873, or by telephone at 1-866-249-8112. All capitalized terms used in the Ballot or in these instructions, but not otherwise defined herein, shall have the meaning ascribed to such terms in the Solicitation Procedures Motion, Disclosure Statement, or Plan, as the case may be.

2. Subject to certain exceptions, the Plan can be confirmed by the Bankruptcy Court and, therefore, made binding on all holders, if it is accepted by the holders of two-thirds (2/3) in amount and more than one-half (1/2) in number of Claims or Equity Interests, as the case may be, in each impaired Class voting on the Plan.

3. To ensure that your vote is counted, you must complete and return this Ballot as follows: (a) review the Disclosures and Certifications in Item 4 of the Ballot; (b) indicate your decision either to accept or reject the Plan in the boxes provided in Item 2 of the Ballot; and (c) sign and return the Ballot in the enclosed pre-addressed, postage pre-paid envelope so that it is ACTUALLY RECEIVED by the Solicitation Agent by the Voting Deadline, February 15, 2010 at 4:00 p.m. Prevailing Eastern Time.

4. If a Ballot is received after the Voting Deadline, it may not be counted. The method of delivery of a Ballot to the Solicitation Agent is at the election and risk of each entity. Except as otherwise provided herein, such delivery will be deemed made only when the original executed Ballot is ACTUALLY RECEIVED by the Solicitation Agent. Sufficient time should be allowed to assure timely delivery. Delivery of a Ballot by facsimile transmission, e-mail or any other electronic means will not be valid. This Ballot should not be sent to the Debtors, any of their agents (other than the Solicitation Agent), any indenture trustee (unless specifically instructed to do so) or the Debtors’ financial or legal advisors.

5. You must vote all of your Equity Interests within a particular Plan Class either to accept or reject the Plan and may not split your vote. Accordingly, a Ballot that partially rejects and partially accepts the Plan will not be counted.

6. If multiple Ballots are received from you with respect to the same Equity Interest prior to the Voting Deadline, the last Ballot timely received will be deemed to reflect your intent and will supersede and revoke any prior Ballot received.

7. The Ballot is not a letter of transmittal and may not be used for any purpose other than to vote to accept or reject the Plan.

8. This Ballot does not constitute, and shall not be deemed to be, a Proof of Equity Interest or an assertion or admission of an Equity Interest.

3

9. The following Ballots shall not be counted in determining the acceptance or rejection of the Plan: (a) any Ballot that is illegible or contains insufficient information to permit the identification of the creditor; (b) any Ballot cast by a person or entity that does not hold a Claim in a Class that is entitled to vote on the Plan; and (c) any unsigned Ballot.

10. Please be sure to sign and date your Ballot. If you are signing the Ballot as a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other entity acting in a fiduciary or representative capacity, you must indicate such capacity when signing and, if required or requested by the Solicitation Agent, the Debtors or the Bankruptcy Court, submit proper evidence satisfactory to the requesting party that you are authorized to so act on behalf of the Holder. In addition, please provide your name and mailing address if different from that set forth on the attached mailing label.

11. If you hold Claims or Equity Interests in more than one Class under the Plan, you will receive more than one Ballot coded for each different Class. Each Ballot votes only your Claims or Equity Interests indicated on that Ballot. Please complete and return each Ballot you receive.

12. If you believe you have received the wrong Ballot, please contact the Solicitation Agent immediately.

13. Unless otherwise directed by the Bankruptcy Court, delivery of a defective or irregular Ballot will not be deemed to have been made until such defect or irregularity has been cured or waived by the Debtors. Any waiver by the Debtors of defects or irregularities in any Ballot will be detailed in the Voting Report filed with the Bankruptcy Court by the Solicitation Agent. Neither the Debtors, nor any other person or entity, will be under any duty to provide notification of defects or irregularities with respect to delivered Ballots, nor will any of them incur any liability for failure to provide such notification.

THIS BALLOT MUST BE RETURNED AS FOLLOWS:

If by U.S. Postal Service:

THE GARDEN CITY GROUP, INC.

ATTN: MES INTERNATIONAL, INC., ET AL.

P.O. BOX 9573

DUBLIN, OH 43017-4873

PHONE: 1-866-249-8112

If by Overnight Mail or Hand Delivery:

THE GARDEN CITY GROUP, INC.

5151 BLAZER PARKWAY, SUITE A

DUBLIN, OH 43017

PHONE: 1-866-249-8112

THIS BALLOT MUST BE RETURNED SO AS TO BE RECEIVED

ON OR BEFORE FEBRUARY 15, 2010 at 4:00 P.M.

PREVAILING EASTERN TIME,

OR YOUR VOTE MAY NOT BE COUNTED.

4

This Ballot is divided into two parts:

PART I. WHO SHOULD USE THIS BALLOT AND HOW TO USE THIS BALLOT

PART II. ITEMS ON THIS BALLOT

Item 1. Amount of Holdings Equity Interests in Class 6A

Item 2. Holdings Equity Interests Vote

Item 3. Releases (Optional)

Item 4. Disclosures and Certifications

PART I. WHO SHOULD USE THIS BALLOT AND HOW TO USE THIS BALLOT

This Ballot is to be used by the Holders of Class 6A Holdings Equity Interests. This Ballot may not be used for any purpose other than casting votes to accept or reject the Plan. This Ballot does not constitute, and shall not be deemed to be, a proof of Equity Interest or an assertion or admission of an Equity Interest.

PLEASE READ AND FOLLOW THE INSTRUCTIONS ON THIS BALLOT CAREFULLY. THIS BALLOT IS ACCOMPANIED BY A PRE-ADDRESSED, POSTAGE PRE-PAID RETURN ENVELOPE. YOUR VOTE MUST BE RECEIVED BY THE SOLICITATION AGENT ON OR BEFORE THE VOTING DEADLINE, FEBRUARY 15, 2010 AT 4:00 P.M. PREVAILING EASTERN TIME.

PART II. ITEMS ON THIS BALLOT

Item 1. Amount of Holdings Equity Interests in Class 6A under the Plan

The undersigned certifies that, as of the Voting Record Date, the undersigned was the Holder of a Class 6A Holdings Equity Interest in the amount of                      common shares.

Item 2. Holdings Equity Interest Vote

The Debtors recommend that you vote to accept the Plan.

The Holder of the Class 6A Holdings Equity Interest set forth in Item 1 votes to (please check one):
ACCEPT THE PLAN CHECK HERE ¨	REJECT THE PLAN CHECK HERE ¨

5

ANY BALLOT WHICH INDICATES BOTH AN ACCEPTANCE AND A REJECTION OF THE PLAN OR DOES NOT INDICATE EITHER AN ACCEPTANCE OR REJECTION OF THE PLAN WILL NOT BE COUNTED.

A VOTE TO ACCEPT THE PLAN CONSTITUTES AN ACCEPTANCE AND CONSENT TO THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS SET FORTH IN ARTICLE VI AND ARTICLE XIII OF THE PLAN UNLESS YOU “OPT-OUT” OF SUCH RELEASES IN ITEM 3 BELOW. IN ADDITION, IF YOU ABSTAIN (CHOOSE NOT TO VOTE), SEE ITEM 3 BELOW. A VOTE TO REJECT THE PLAN INCLUDES A REJECTION OF ANY RELEASES SET FORTH IN THE PLAN.

PLEASE SEE ARTICLE VI, SECTION 6.19 AND ARTICLE XIII, SECTIONS 13.6, 13.7, 13.8 AND 13.22 OF THE PLAN FOR INFORMATION ABOUT THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS.

Item 3. Releases (Optional)

PURSUANT TO THE PLAN, IF YOU RETURN A BALLOT AND VOTE TO ACCEPT THE PLAN, YOU ARE AUTOMATICALLY DEEMED TO HAVE ACCEPTED THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS IN ARTICLE VI AND ARTICLE XIII OF THE PLAN. YOU ARE ALSO DEEMED TO HAVE ACCEPTED THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS IN ARTICLE VI AND ARTICLE XIII OF THE PLAN IF YOU DO NOT CAST A VOTE WITH RESPECT TO THE PLAN. HOWEVER, YOU MAY CHECK THE BOX BELOW TO REJECT SUCH RELEASE PROVISIONS IN THE PLAN.

¨ The undersigned elects not to grant the releases set forth in Article VI and Article XIII of the Plan.

Item 4. Disclosures and Certifications

Disclosures

(i) A Holder of a Claim or Equity Interest is required to cast the same vote within a particular Class on every Ballot completed by such Holder with respect to such Claim or Equity Interest;

(ii) Only the latest dated Ballot cast prior to the Voting Deadline with respect to the Equity Interest identified in Item 1 will be counted and, if any other Ballots have been cast with respect to such Equity Interest, such other Ballots will be deemed revoked;

(iii) (a) The Debtors have made available to all Holders of Claims or Equity Interests entitled to vote on the Plan or their authorized agents all of the Solicitation Documents and, (b) except for the Solicitation Documents, such Holders are not to have relied on any statement made or other information received from any person with respect to the Plan; and

6

(iv) All authority conferred or agreed to be conferred pursuant to this Ballot and every obligation of the undersigned hereunder shall be binding upon the transferees, successors, assigns, heirs, executors, administrators and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned.

Certifications

Upon execution of this Ballot, the Holder of the Class 6A Holdings Equity Interest identified in Item 1 above certifies that:

(i) (a) as of the Voting Record Date, it was the Holder of the Class 6A Holdings Equity Interest in the amount indicated in Item 1 or (b) it is an authorized signatory for an entity that was the Holder of the Class 6A Holdings Equity Interest in the amount indicated in Item 1 as of the Voting Record Date;

(ii) it (or in the case of an authorized signatory, the Holder) is eligible to be treated as the Holder of the Class 6A Holdings Equity Interest in the amount indicated in Item 1 for the purposes of voting on the Plan; and

(iii) it has reviewed and understands the disclosures in the section titled “Disclosures” immediately above.

Dated:	Name of Holder:
	Signature:
	By (if not Holder):
	Title (if appropriate):
	Telephone Number:
	Street Address:
	City, State and Zip Code:

¨ Please check here if the above address is a Change of Address that you would like reflected in the Master Mailing List for these Chapter 11 Cases.  

7

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:	)	Chapter 11
	)
MES INTERNATIONAL, INC., et al., 1	)	Case No. 09-14109 (PJW)
	)
Debtors.	)	Jointly Administered
	)

BENEFICIAL BALLOT FOR ACCEPTING OR REJECTING

THE DEBTORS’ CHAPTER 11 PLAN

CLASS 5 – NOTE CLAIMS

PLEASE READ AND FOLLOW THE ENCLOSED

VOTING INSTRUCTIONS CAREFULLY BEFORE COMPLETING THIS BALLOT.

PLEASE CHECK THE APPROPRIATE BOX BELOW

TO INDICATE YOUR ACCEPTANCE OR REJECTION OF THE PLAN.

THIS BALLOT IS ONLY FOR THE BENEFICIAL HOLDERS OF THE CLASS 5 NOTE CLAIMS. THIS BALLOT MUST BE RECEIVED BY THE GARDEN CITY GROUP, INC. (THE “SOLICITATION AGENT”) ON OR BEFORE FEBRUARY 15, 2010 AT 4:00 P.M. PREVAILING EASTERN TIME (THE “VOTING DEADLINE”). IF YOUR BALLOT IS NOT RECEIVED BY THE VOTING DEADLINE, THE DEBTORS MAY CONSIDER SUCH BALLOT INVALID.

PLEASE NOTE: IF YOU RECEIVED A RETURN ENVELOPE ADDRESSED TO YOUR BANK, BROKER, OR OTHER VOTING NOMINEE (EACH OF THE FOREGOING, A “VOTING NOMINEE”), YOU MUST RETURN YOUR BALLOT TO SUCH VOTING NOMINEE EARLY ENOUGH FOR YOUR VOTE TO BE PROCESSED BY YOUR VOTING NOMINEE AND THEN FORWARDED BY YOUR VOTING NOMINEE TO THE SOLICITATION AGENT BY THE VOTING DEADLINE. THEREFORE, PLEASE ALLOW ADDITIONAL TIME.

IF THE PLAN IS CONFIRMED BY THE BANKRUPTCY COURT, IT WILL BE BINDING ON YOU WHETHER OR NOT YOU VOTE.

This Ballot may not be used for any purpose other than submitting votes with respect to the First Modified Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Plan”). All capitalized terms used in this Ballot or in these instructions, but not otherwise defined herein, shall have the meaning ascribed to such

¹ The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: MES International, Inc. (1964); GSI Group Inc. (0412); and GSI Group Corporation (9358). The Debtors’ headquarters is located at 125 Middlesex Turnpike, Bedford, MA 01730.

terms in the Order Approving the Debtors’ Disclosure Statement and Relief Related Thereto (the “Solicitation Procedures Order”), First Modified Disclosure Statement Accompanying the Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Disclosure Statement”), or Plan, as the case may be.

This Ballot is being sent to you because the Debtors’ records indicate that you are a Holder of a Class 5 Note Claim as of January 8, 2010 (the “Voting Record Date”), and accordingly, you are entitled to vote to accept or reject the Debtors’ Plan. Your rights are described in the Disclosure Statement and Plan. The Disclosure Statement, Plan, Solicitation Procedures Order and certain other materials contained in the Exhibits to the Plan are enclosed with this Ballot. These documents, along with the Exhibits to the Plan and all other Solicitation Documents, can be obtained by accessing the Debtors’ website at www.gsirestructuring.com or by requesting a copy from the Debtors’ Solicitation Agent by writing to The Garden City Group, Inc., Attn: MES International, Inc., et al., P.O. Box 9573, Dublin, OH 43017-4873 or by telephone at 1-866-249-8112.

The Bankruptcy Court has approved the Disclosure Statement as containing adequate information pursuant to section 1125 of the Bankruptcy Code. Bankruptcy Court approval of the Disclosure Statement does not indicate approval of the Plan by the Bankruptcy Court. If you believe you have received this Ballot in error, please contact the Solicitation Agent at the address or telephone number above.

You should carefully and thoroughly review the Disclosure Statement and the Plan before you vote. You may wish to seek legal advice concerning the Plan and the classification and treatment of your Claim under the Plan. Your Claim has been placed in Class 5, entitled “Note Claims.” If you hold Claims in more than one Class, you will receive a Ballot for each Class in which you are entitled to vote. You should return all Ballots for each Class in which you are entitled to vote. All persons or entities receiving a Ballot with respect to Class 5 Note Claims should return a completed Ballot in accordance with the instructions set forth therein.

PLEASE DELIVER YOUR BALLOT PROMPTLY.

IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT

OR THESE VOTING INSTRUCTIONS,

PLEASE CALL THE SOLICITATION AGENT AT 1-866-249-8112.

PLEASE BE ADVISED THAT THE SOLICITATION AGENT CANNOT AND WILL NOT PROVIDE LEGAL ADVICE WITH RESPECT TO THE DEBTORS’ SOLICITATION DOCUMENTS, INCLUDING THE DISCLOSURE STATEMENT AND PLAN.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY OTHER PERSON THE AGENT OF THE DEBTORS OR THE SOLICITATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE STATEMENTS CONTAINED IN THE DEBTORS’ SOLICITATION DOCUMENTS, INCLUDING THE DISCLOSURE STATEMENT AND PLAN.

2

SPECIAL VOTING INSTRUCTIONS FOR HOLDERS OF CLASS 5 NOTE CLAIMS

1. The Debtors are soliciting the votes of holders of Class 5 Note Claims and Class 6A Holdings Equity Interests with respect to the Debtors’ Plan. Your rights are described in the Disclosure Statement and Plan. The Disclosure Statement, Plan, Solicitation Procedures Order and Solicitation Procedures are included with this Ballot. These documents, along with the Exhibits to the Plan and all other Solicitation Documents, can be obtained by accessing the Debtors’ website at www.gsirestructuring.com or by requesting a copy from the Debtors’ Solicitation Agent by writing to The Garden City Group, Inc., Attn: MES International, Inc., et al., P.O. Box 9573, Dublin, OH 43017-4873 or by telephone at 1-866-249-8112. All capitalized terms used in the Ballot or in these instructions, but not otherwise defined herein, shall have the meaning ascribed to such terms in the Solicitation Procedures Motion, Disclosure Statement, or Plan, as the case may be.

2. Subject to certain exceptions, the Plan can be confirmed by the Bankruptcy Court and, therefore, made binding on all holders, if it is accepted by the holders of two-thirds (2/3) in amount and more than one-half (1/2) in number of Claims in each impaired Class voting on the Plan.

3. To ensure that your vote is counted, you must complete and return this Ballot as follows: (a) review the Disclosures and Certifications in Item 4 of the Ballot; (b) indicate your decision either to accept or reject the Plan in the boxes provided in Item 2 of the Ballot; and (c) sign and return the Ballot in the enclosed pre-addressed, postage pre-paid envelope. IF YOU RECEIVED A RETURN ENVELOPE ADDRESSED TO YOUR BANK, BROKER, OR OTHER VOTING NOMINEE (EACH OF THE FOREGOING, A “VOTING NOMINEE”), PLEASE ALLOW SUFFICIENT TIME FOR YOUR VOTING NOMINEE TO PROCESS YOUR VOTE ON A MASTER BALLOT AND RETURN THE MASTER BALLOT TO THE SOLICITATION AGENT BEFORE THE VOTING DEADLINE.

4. If a Master Ballot is received after the Voting Deadline, it may not be counted.

5. You must vote all of your Claims within a particular Plan Class either to accept or reject the Plan and may not split your vote. Accordingly, a Ballot that partially rejects and partially accepts the Plan will not be counted.

6. If multiple Ballots are received from you with respect to the same Claim prior to the Voting Deadline, the last Ballot timely received will be deemed to reflect your intent and will supersede and revoke any prior Ballot received.

7. The Ballot is not a letter of transmittal and may not be used for any purpose other than to vote to accept or reject the Plan.

8. This Ballot does not constitute, and shall not be deemed to be, a Proof of Claim or Equity Interest or an assertion or admission of a Claim or Equity Interest.

9. The following Ballots shall not be counted in determining the acceptance or rejection of the Plan: (a) any Ballot that is illegible or contains insufficient information to permit the identification of the creditor; (b) any Ballot cast by a person or entity that does not hold a Claim in a Class that is entitled to vote on the Plan; and (c) any unsigned Ballot.

3

10. Please be sure to sign and date your Ballot. If you are signing the Ballot as a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other entity acting in a fiduciary or representative capacity, you must indicate such capacity when signing and, if required or requested by the Solicitation Agent, Debtors or Bankruptcy Court, submit proper evidence satisfactory to the requesting party that you are authorized to so act on behalf of the Holder. In addition, please provide your name and mailing address if different from that set forth on the attached mailing label.

11. If you hold Claims in more than one Class under the Plan, you will receive more than one Ballot coded for each different Class. Each Ballot votes only your Claims indicated on that Ballot. Please complete and return each Ballot you receive.

12. If you believe you have received the wrong Ballot, please contact the Solicitation Agent immediately.

13. Unless otherwise directed by the Bankruptcy Court, delivery of a defective or irregular Ballot will not be deemed to have been made until such defect or irregularity has been cured or waived by the Debtors. Any waiver by the Debtors of defects or irregularities in any Ballot will be detailed in the Voting Report filed with the Bankruptcy Court by the Solicitation Agent. Neither the Debtors, nor any other person or entity, will be under any duty to provide notification of defects or irregularities with respect to delivered Ballots, nor will any of them incur any liability for failure to provide such notification.

THIS BALLOT MUST BE RETURNED AS FOLLOWS:

If by U.S. Postal Service:

THE GARDEN CITY GROUP, INC.

ATTN: MES INTERNATIONAL, INC., ET AL.

P.O. BOX 9573

DUBLIN, OH 43017-4873

PHONE: 1-866-249-8112

If by Overnight Mail or Hand Delivery:

THE GARDEN CITY GROUP, INC.

5151 BLAZER PARKWAY, SUITE A

DUBLIN, OH 43017

PHONE: 1-866-249-8112

THIS BALLOT MUST BE RETURNED SO AS TO BE RECEIVED

ON OR BEFORE FEBRUARY 15, 2010 AT 4:00 P.M.

PREVAILING EASTERN TIME,

OR YOUR VOTE MAY NOT BE COUNTED.

4

This Ballot is divided into two parts:

PART I. WHO SHOULD USE THIS BALLOT AND HOW TO USE THIS BALLOT

PART II. ITEMS ON THIS BALLOT

Item 1. Amount of Class 5 Note Claim

Item 2. Note Claim Vote

Item 3. Releases (Optional)

Item 4. Disclosures and Certifications

PART I. WHO SHOULD USE THIS BALLOT AND HOW TO USE THIS BALLOT

This Ballot is to be used by the Holder of a Class 5 Note Claim. This Ballot may not be used for any purpose other than casting votes to accept or reject the Plan. This Ballot does not constitute, and shall not be deemed to be, a Proof of Claim or an assertion or admission of a Claim.

PLEASE READ AND FOLLOW THE INSTRUCTIONS ON THIS BALLOT CAREFULLY. THIS BALLOT IS ACCOMPANIED BY A PRE-ADDRESSED, POSTAGE PRE-PAID RETURN ENVELOPE. YOUR VOTE MUST BE RECEIVED BY THE SOLICITATION AGENT ON OR BEFORE THE VOTING DEADLINE, FEBRUARY 15, 2010 AT 4:00 P.M. PREVAILING EASTERN TIME.

PART II. ITEMS ON THIS BALLOT

Item 1. Amount of Note Claim under Class 5 in the Plan

a. The undersigned certifies that, as of the Voting Record Date, the undersigned was the Beneficial Holder of a Class 5A Senior Note Claim in the amount of $                    .__.

-OR-

b. The undersigned certifies that, as of the Voting Record Date, the undersigned was the Beneficial Holder of a Class 5B GSI UK Note Claim in the amount of $                    .__.

5

Item 2. Note Claim Vote

The Debtors recommend that you vote to accept the Plan.

The Holder of the Class 5 Note Claim set forth in Item 1 votes to (please check one):
ACCEPT THE PLAN CHECK HERE ¨	REJECT THE PLAN CHECK HERE ¨

ANY BALLOT WHICH INDICATES BOTH AN ACCEPTANCE AND A REJECTION OF THE PLAN OR DOES NOT INDICATE EITHER AN ACCEPTANCE OR REJECTION OF THE PLAN WILL NOT BE COUNTED.

A VOTE TO ACCEPT THE PLAN CONSTITUTES AN ACCEPTANCE AND CONSENT TO THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS SET FORTH IN ARTICLE VI AND ARTICLE XIII OF THE PLAN UNLESS YOU “OPT-OUT” OF SUCH RELEASES IN ITEM 3 BELOW. IN ADDITION, IF YOU ABSTAIN (CHOOSE NOT TO VOTE), SEE ITEM 3 BELOW. A VOTE TO REJECT THE PLAN INCLUDES A REJECTION OF ANY RELEASES SET FORTH IN THE PLAN.

PLEASE SEE ARTICLE VI, SECTION 6.19 AND ARTICLE XIII, SECTIONS 13.6, 13.7, 13.8 AND 13.22 OF THE PLAN FOR INFORMATION ABOUT THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS.

Item 3. Releases (Optional)

PURSUANT TO THE PLAN, IF YOU RETURN A BALLOT AND VOTE TO ACCEPT THE PLAN, YOU ARE AUTOMATICALLY DEEMED TO HAVE ACCEPTED THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS IN ARTICLE VI AND ARTICLE XIII OF THE PLAN. YOU ARE ALSO DEEMED TO HAVE ACCEPTED THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS IN ARTICLE VI AND ARTICLE XIII OF THE PLAN IF YOU DO NOT CAST A VOTE WITH RESPECT TO THE PLAN. HOWEVER, YOU MAY CHECK THE BOX BELOW TO REJECT SUCH RELEASE PROVISIONS IN THE PLAN.

¨ The undersigned elects not to grant the releases set forth in Article VI and Article XIII of the Plan.

6

Item 4. Disclosures and Certifications

Disclosures

(i) A Holder of a Claim or Equity Interest is required to cast the same vote within a particular Class on every Ballot completed by such Holder with respect to such Claim or Equity Interest;

(ii) Only the latest dated Ballot cast prior to the Voting Deadline with respect to the Note Claim identified in Item 1 will be counted and, if any other Ballots have been cast with respect to such Note Claim, such other Ballots will be deemed revoked;

(iii) (a) The Debtors have made available to all Holders of Claims or Equity Interests entitled to vote on the Plan or their authorized agents all of the Solicitation Documents and, (b) except for the Solicitation Documents, such Holders are not to have relied on any statement made or other information received from any person with respect to the Plan; and

(iv) All authority conferred or agreed to be conferred pursuant to this Ballot and every obligation of the undersigned hereunder shall be binding upon the transferees, successors, assigns, heirs, executors, administrators and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned.

Certifications

Upon execution of this Ballot, the Beneficial Holder of the Note Claim identified in Item 1 above certifies that:

(i) (a) as of the Voting Record Date, January 8, 2010, it was the Beneficial Holder of the Note Claim in the aggregate amount indicated in Item 1 or (b) it is an authorized signatory for an entity that was the Beneficial Holder of the Note Claim in the aggregate amount indicated in Item 1 as of the Voting Record Date;

(ii) it (or in the case of an authorized signatory, the Holder) is eligible to be treated as the Beneficial Holder of the Note Claim in the aggregate amount indicated in Item 1 for the purposes of voting on the Plan; and

7

(iii) it has reviewed and understands the disclosures in the section titled “Disclosures” immediately above.

Dated:	Name of Holder:
	Signature:
	By (if not Holder):
	Title (if appropriate):
	Telephone Number:
	Street Address:
	City, State and Zip Code:

¨ Please check here if the above address is a Change of Address that you would like reflected in the Master Mailing List for these Chapter 11 Cases.  

8

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:	)	Chapter 11
	)
MES INTERNATIONAL, INC., et al., 1	)	Case No. 09-14109 (PJW)
	)
Debtors.	)	Jointly Administered
	)

BENEFICIAL BALLOT FOR ACCEPTING OR REJECTING

THE DEBTORS’ CHAPTER 11 PLAN

CLASS 6A – HOLDINGS EQUITY INTERESTS

PLEASE READ AND FOLLOW THE ENCLOSED

VOTING INSTRUCTIONS CAREFULLY BEFORE COMPLETING THIS BALLOT.

PLEASE CHECK THE APPROPRIATE BOX BELOW

TO INDICATE YOUR ACCEPTANCE OR REJECTION OF THE PLAN.

THIS BALLOT IS ONLY FOR THE BENEFICIAL HOLDERS OF THE CLASS 6A HOLDINGS EQUITY INTERESTS. THIS BALLOT MUST BE RECEIVED BY THE GARDEN CITY GROUP, INC. (THE “SOLICITATION AGENT”) ON OR BEFORE FEBRUARY 15, 2010 AT 4:00 P.M. PREVAILING EASTERN TIME (THE “VOTING DEADLINE”). IF YOUR BALLOT IS NOT RECEIVED BY THE VOTING DEADLINE, THE DEBTORS MAY CONSIDER SUCH BALLOT INVALID.

PLEASE NOTE: IF YOU RECEIVED A RETURN ENVELOPE ADDRESSED TO YOUR BANK, BROKER, OR OTHER VOTING NOMINEE (EACH OF THE FOREGOING, A “VOTING NOMINEE”), YOU MUST RETURN YOUR BALLOT TO SUCH VOTING NOMINEE EARLY ENOUGH FOR YOUR VOTE TO BE PROCESSED BY YOUR VOTING NOMINEE AND THEN FORWARDED BY YOUR VOTING NOMINEE TO THE SOLICITATION AGENT BY THE VOTING DEADLINE. THEREFORE, PLEASE ALLOW ADDITIONAL TIME.

IF THE PLAN IS CONFIRMED BY THE BANKRUPTCY COURT, IT WILL BE BINDING ON YOU WHETHER OR NOT YOU VOTE.

This Ballot may not be used for any purpose other than submitting votes with respect to the First Modified Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Plan”). All capitalized terms used in this Ballot or in these instructions, but not otherwise defined herein, shall have the meaning ascribed to such terms in the Order Approving the Debtors’ Disclosure Statement and Relief Related Thereto (the “Solicitation Procedures Order”), First Modified Disclosure Statement Accompanying the Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Disclosure Statement”), or Plan, as the case may be.

¹ The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: MES International, Inc. (1964); GSI Group Inc. (0412); and GSI Group Corporation (9358). The Debtors’ headquarters is located at 125 Middlesex Turnpike, Bedford, MA 01730.

This Ballot is being sent to you because the Debtors’ records indicate that you are a Holder of a Class 6A Holdings Equity Interest as of January 8, 2010 (the “Voting Record Date”), and accordingly, you are entitled to vote to accept or reject the Debtors’ Plan. Your rights are described in the Disclosure Statement and Plan. The Disclosure Statement, Plan, Solicitation Procedures Order and certain other materials contained in the Exhibits to the Plan are enclosed with this Ballot. These documents, along with the Exhibits to the Plan and all other Solicitation Documents, can be obtained by accessing the Debtors’ website at www.gsirestructuring.com or by requesting a copy from the Debtors’ Solicitation Agent by writing to The Garden City Group, Inc., Attn: MES International, Inc., et al., P.O. Box 9573, Dublin, OH 43017-4873, or by telephone at 1-866-249-8112.

The Bankruptcy Court has approved the Disclosure Statement as containing adequate information pursuant to section 1125 of the Bankruptcy Code. Bankruptcy Court approval of the Disclosure Statement does not indicate approval of the Plan by the Bankruptcy Court. If you believe you have received this Ballot in error, please contact the Solicitation Agent at the address or telephone number above.

You should carefully and thoroughly review the Disclosure Statement and Plan before you vote. You may wish to seek legal advice concerning the Plan and the classification and treatment of your Equity Interest under the Plan. Your Equity Interest has been placed in Class 6A, entitled “Holdings Equity Interests.” If you hold Claims or Equity Interests in more than one Class, you will receive a Ballot for each Class in which you are entitled to vote. You should return all Ballots for each Class in which you are entitled to vote. All persons or entities receiving a Ballot with respect to Class 6A Holdings Equity Interests should return a completed Ballot in accordance with the instructions set forth therein.

PLEASE DELIVER YOUR BALLOT PROMPTLY.

IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT

OR THESE VOTING INSTRUCTIONS,

PLEASE CALL THE SOLICITATION AGENT AT 1-866-249-8112.

PLEASE BE ADVISED THAT THE SOLICITATION AGENT CANNOT AND WILL NOT PROVIDE LEGAL ADVICE WITH RESPECT TO THE DEBTORS’ SOLICITATION DOCUMENTS, INCLUDING THE DISCLOSURE STATEMENT AND PLAN.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY OTHER PERSON THE AGENT OF THE DEBTORS OR THE SOLICITATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE STATEMENTS CONTAINED IN THE DEBTORS’ SOLICITATION DOCUMENTS, INCLUDING THE DISCLOSURE STATEMENT AND PLAN.

2

SPECIAL VOTING INSTRUCTIONS FOR HOLDERS OF

CLASS 6A HOLDINGS EQUITY INTERESTS

1. The Debtors are soliciting the votes of holders of Class 5 Note Claims and Class 6A Holdings Equity Interests with respect to the Debtors’ Plan. Your rights are described in the Disclosure Statement and Plan. The Disclosure Statement, Plan, Solicitation Procedures Order and Solicitation Procedures are included with this Ballot. These documents, along with the Exhibits to the Plan and all other Solicitation Documents, can be obtained by accessing the Debtors’ website at www.gsirestructuring.com or by requesting a copy from the Debtors’ Solicitation Agent by writing to The Garden City Group, Inc., Attn: MES International, Inc., et al., P.O. Box 9573, Dublin, OH 43017-4873, or by telephone at 1-866-249-8112. All capitalized terms used in the Ballot or in these instructions, but not otherwise defined herein, shall have the meaning ascribed to such terms in the Solicitation Procedures Motion, Disclosure Statement, or Plan, as the case may be.

2. Subject to certain exceptions, the Plan can be confirmed by the Bankruptcy Court and, therefore, made binding on all holders, if it is accepted by the holders of two-thirds (2/3) in amount and more than one-half (1/2) in number of claims in each impaired Class voting on the Plan.

3. To ensure that your vote is counted, you must complete and return this Ballot as follows: (a) review the Disclosures and Certifications in Item 4 of the Ballot; (b) indicate your decision either to accept or reject the Plan in the boxes provided in Item 2 of the Ballot; and (c) sign and return the Ballot in the enclosed pre-addressed, postage pre-paid envelope. IF YOU RECEIVED A RETURN ENVELOPE ADDRESSED TO YOUR BANK, BROKER, OR OTHER VOTING NOMINEE (EACH OF THE FOREGOING, A “VOTING NOMINEE”), PLEASE ALLOW SUFFICIENT TIME FOR YOUR VOTING NOMINEE TO PROCESS YOUR VOTE ON A MASTER BALLOT AND RETURN THE MASTER BALLOT TO THE SOLICITATION AGENT BEFORE THE VOTING DEADLINE.

4. If a Master Ballot is received after the Voting Deadline, it may not be counted.

5. You must vote all of your Equity Interests within a particular Plan Class either to accept or reject the Plan and may not split your vote. Accordingly, a Ballot that partially rejects and partially accepts the Plan will not be counted.

6. If multiple Ballots are received from you with respect to the same Equity Interest prior to the Voting Deadline, the last Ballot timely received will be deemed to reflect your intent and will supersede and revoke any prior Ballot received.

7. The Ballot is not a letter of transmittal and may not be used for any purpose other than to vote to accept or reject the Plan.

8. This Ballot does not constitute, and shall not be deemed to be, a Proof of Claim or Equity Interest or an assertion or admission of a Claim or Equity Interest.

9. The following Ballots shall not be counted in determining the acceptance or rejection of the Plan: (a) any Ballot that is illegible or contains insufficient information to permit the identification of the creditor; (b) any Ballot cast by a person or entity that does not hold a Claim in a Class that is entitled to vote on the Plan; and (c) any unsigned Ballot.

3

10. Please be sure to sign and date your Ballot. If you are signing the Ballot as a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other entity acting in a fiduciary or representative capacity, you must indicate such capacity when signing and, if required or requested by the Solicitation Agent, Debtors or Bankruptcy Court, submit proper evidence satisfactory to the requesting party that you are authorized to so act on behalf of the Holder. In addition, please provide your name and mailing address if different from that set forth on the attached mailing label.

11. If you hold Claims or Equity Interests in more than one Class under the Plan, you will receive more than one Ballot coded for each different Class. Each Ballot votes only your Claims or Equity Interests indicated on that Ballot. Please complete and return each Ballot you receive.

12. If you believe you have received the wrong Ballot, please contact the Solicitation Agent immediately.

13. Unless otherwise directed by the Bankruptcy Court, delivery of a defective or irregular Ballot will not be deemed to have been made until such defect or irregularity has been cured or waived by the Debtors. Any waiver by the Debtors of defects or irregularities in any Ballot will be detailed in the Voting Report filed with the Bankruptcy Court by the Solicitation Agent. Neither the Debtors, nor any other person or entity, will be under any duty to provide notification of defects or irregularities with respect to delivered Ballots, nor will any of them incur any liability for failure to provide such notification.

THIS BALLOT MUST BE RETURNED AS FOLLOWS:

If by U.S. Postal Service:

THE GARDEN CITY GROUP, INC.

ATTN: MES INTERNATIONAL, INC., ET AL.

P.O. BOX 9573

DUBLIN, OH 43017-4873

PHONE: 1-866-249-8112

If by Overnight Mail or Hand Delivery:

THE GARDEN CITY GROUP, INC.

5151 BLAZER PARKWAY, SUITE A

DUBLIN, OH 43017

PHONE: 1-866-249-8112

THIS BALLOT MUST BE RETURNED SO AS TO BE RECEIVED:

ON OR BEFORE FEBRUARY 15, 2010 AT 4:00 P.M.

PREVAILING EASTERN TIME,

OR YOUR VOTE MAY NOT BE COUNTED.

4

This Ballot is divided into two parts:

PART I. WHO SHOULD USE THIS BALLOT AND HOW TO USE THIS BALLOT

PART II. ITEMS ON THIS BALLOT

Item 1. Amount of Class 6A Holdings Equity Interests

Item 2. Holdings Equity Interest Vote

Item 3. Releases (Optional)

Item 4. Disclosures and Certifications

PART I. WHO SHOULD USE THIS BALLOT AND HOW TO USE THIS BALLOT

This Ballot is to be used by the Holder of a Class 6A Holdings Equity Interest. This Ballot may not be used for any purpose other than casting votes to accept or reject the Plan. This Ballot does not constitute, and shall not be deemed to be, a Proof of Equity Interest or an assertion or admission of an Equity Interest.

PLEASE READ AND FOLLOW THE INSTRUCTIONS ON THIS BALLOT CAREFULLY. THIS BALLOT IS ACCOMPANIED BY A PRE-ADDRESSED, POSTAGE PRE-PAID RETURN ENVELOPE. YOUR VOTE MUST BE RECEIVED BY THE SOLICITATION AGENT ON OR BEFORE THE VOTING DEADLINE, FEBRUARY 15, 2010 AT 4:00 P.M. PREVAILING EASTERN TIME.

PART II. ITEMS ON THIS BALLOT

Item 1. Amount of Holdings Equity Interest under Class 6A in the Plan

The undersigned certifies that, as of the Voting Record Date, the undersigned was the Beneficial Holder of a Class 6A Holdings Equity Interest in the amount of                      common shares.

Item 2. Holdings Equity Interest Vote

The Debtors recommend that you vote to accept the Plan.

The Holder of the Class 6A Holdings Equity Interest set forth in Item 1 votes to (please check one):
ACCEPT THE PLAN CHECK HERE ¨	REJECT THE PLAN CHECK HERE ¨

5

ANY BALLOT WHICH INDICATES BOTH AN ACCEPTANCE AND A REJECTION OF THE PLAN OR DOES NOT INDICATE EITHER AN ACCEPTANCE OR REJECTION OF THE PLAN WILL NOT BE COUNTED.

A VOTE TO ACCEPT THE PLAN CONSTITUTES AN ACCEPTANCE AND CONSENT TO THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS SET FORTH IN ARTICLE VI AND ARTICLE XIII OF THE PLAN UNLESS YOU “OPT-OUT” OF SUCH RELEASES IN ITEM 3 BELOW. IN ADDITION, IF YOU ABSTAIN (CHOOSE NOT TO VOTE), SEE ITEM 3 BELOW. A VOTE TO REJECT THE PLAN INCLUDES A REJECTION OF ANY RELEASES SET FORTH IN THE PLAN.

PLEASE SEE ARTICLE VI, SECTION 6.19 AND ARTICLE XIII, SECTIONS 13.6, 13.7, 13.8 AND 13.22 OF THE PLAN FOR INFORMATION ABOUT THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS.

Item 3. Releases (Optional)

PURSUANT TO THE PLAN, IF YOU RETURN A BALLOT AND VOTE TO ACCEPT THE PLAN, YOU ARE AUTOMATICALLY DEEMED TO HAVE ACCEPTED THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS IN ARTICLE VI AND ARTICLE XIII OF THE PLAN. YOU ARE ALSO DEEMED TO HAVE ACCEPTED THE RELEASE, DISCHARGE, EXCULPATION AND INJUNCTION PROVISIONS IN ARTICLE VI AND ARTICLE XIII OF THE PLAN IF YOU DO NOT CAST A VOTE WITH RESPECT TO THE PLAN. HOWEVER, YOU MAY CHECK THE BOX BELOW TO REJECT SUCH RELEASE PROVISIONS IN THE PLAN.

¨ The undersigned elects not to grant the releases set forth in Article VI and Article XIII of the Plan.

Item 4. Disclosures and Certifications

Disclosures

(i) A Holder of a Claim or Equity Interest is required to cast the same vote within a particular Class on every Ballot completed by such Holder with respect to such Claim or Equity Interest;

(ii) Only the latest dated Ballot cast prior to the Voting Deadline with respect to the Holdings Equity Interest identified in Item 1 will be counted and, if any other Ballots have been cast with respect to such Holdings Equity Interest, such other Ballots will be deemed revoked;

(iii) (a) The Debtors have made available to all Holders of Claims or Equity Interests entitled to vote on the Plan or their authorized agents all of the Solicitation Documents and, (b) except for the Solicitation Documents, such Holders are not to have relied on any statement made or other information received from any person with respect to the Plan; and

6

(iv) All authority conferred or agreed to be conferred pursuant to this Ballot and every obligation of the undersigned hereunder shall be binding upon the transferees, successors, assigns, heirs, executors, administrators and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned.

Certifications

Upon execution of this Ballot, the Beneficial Holder of the Class 6A Holdings Equity Interest identified in Item 1 above certifies that:

(i) (a) as of the Voting Record Date, January 8, 2010, it was the Beneficial Holder of the Class 6A Holdings Equity Interest in the amount indicated in Item 1 or (b) it is an authorized signatory for an entity that was the Beneficial Holder of the Class 6A Holdings Equity Interest in the amount indicated in Item 1 as of the Voting Record Date;

(ii) it (or in the case of an authorized signatory, the Beneficial Holder) is eligible to be treated as the Beneficial Holder of the Class 6A Holdings Equity Interest in the aggregate amount indicated in Item 1 for the purposes of voting on the Plan; and

(iii) it has reviewed and understands the disclosures in the section titled “Disclosures” immediately above.

Dated:	Name of Holder:
	Signature:
	By (if not Holder):
	Title (if appropriate):
	Telephone Number:
	Street Address:
	City, State and Zip Code:

¨ Please check here if the above address is a Change of Address that you would like reflected in the Master Mailing List for these Chapter 11 Cases.  

7

PLEASE DELIVER YOUR BALLOT PROMPTLY.

IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT

OR THESE VOTING INSTRUCTIONS,

PLEASE CALL THE SOLICITATION AGENT AT 1-866-249-8112.

PLEASE BE ADVISED THAT THE SOLICITATION AGENT CANNOT AND WILL NOT PROVIDE LEGAL ADVICE WITH RESPECT TO THE DEBTORS’ SOLICITATION DOCUMENTS, INCLUDING THE DISCLOSURE STATEMENT AND THE PLAN.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY OTHER PERSON THE AGENT OF THE DEBTORS OR THE SOLICITATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE PLAN, EXCEPT FOR THE STATEMENTS CONTAINED IN THE DEBTORS’ SOLICITATION DOCUMENTS, INCLUDING THE DISCLOSURE STATEMENT AND PLAN.

8

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:	)	Chapter 11
	)
MES INTERNATIONAL, INC., et al., 1	)	Case No. 09-14109 (PJW)
	)
Debtors.	)	Jointly Administered
	)

MASTER BALLOT FOR ACCEPTING OR REJECTING

THE DEBTORS’ CHAPTER 11 PLAN

CLASS 5 – NOTE CLAIMS

PLEASE READ AND FOLLOW THE ENCLOSED

VOTING INSTRUCTIONS CAREFULLY BEFORE COMPLETING THIS BALLOT.

PLEASE CHECK THE APPROPRIATE BOX BELOW

TO INDICATE YOUR ACCEPTANCE OR REJECTION OF THE PLAN.

THIS MASTER BALLOT IS ONLY FOR CASTING VOTES ON BEHALF OF BENEFICIAL HOLDERS OF THE CLASS 5 NOTE CLAIMS. THIS MASTER BALLOT IS ACCOMPANIED BY A PRE-ADDRESSED, POSTAGE PRE-PAID RETURN ENVELOPE THAT IS ADDRESSED TO THE GARDEN CITY GROUP, INC. (THE “SOLICITATION AGENT”). THIS MASTER BALLOT MUST BE RECEIVED BY THE SOLICITATION AGENT ON OR BEFORE FEBRUARY 15, 2010 AT 4:00 P.M. PREVAILING EASTERN TIME (THE “VOTING DEADLINE”). IF YOUR MASTER BALLOT IS NOT RECEIVED BY THE VOTING DEADLINE, THE DEBTORS MAY CONSIDER SUCH MASTER BALLOT INVALID.

This Master Ballot may not be used for any purpose other than submitting votes with respect to the First Modified Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Plan”). All capitalized terms used in this Master Ballot or in these instructions, but not otherwise defined herein, shall have the meaning ascribed to such terms in the Order Approving the Debtors’ Disclosure Statement and Relief Related Thereto (the “Solicitation Procedures Order”), First Modified Disclosure Statement Accompanying the Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Disclosure Statement”), or Plan, as the case may be.

This Master Ballot is to be used by you as a broker, bank, or other nominee; or as the agent of a broker, bank, or other nominee (each of the foregoing, a “Voting Nominee”); or as the proxy holder of a Voting Nominee or Beneficial Holder for the Class 5 Note Claims, to transmit to the Solicitation Agent the votes of such Beneficial Holders in respect of their Class 5 Note Claims to accept or reject the Plan.

¹ The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: MES International, Inc. (1964); GSI Group Inc. (0412); and GSI Group Corporation (9358). The Debtors’ headquarters is located at 125 Middlesex Turnpike, Bedford, MA 01730.

Item 1. Amount of Class 5 Note Claim

a. On January 8, 2010, the Voting Record Date, the undersigned was the record holder of $             in aggregate principal amount of Class 5A Senior Note Claims for which voting instructions have been received from such Beneficial Holders thereof as listed in Item 2(a) below;

-OR-

b. On January 8, 2010, the Voting Record Date, the undersigned was the record holder of $             in aggregate principal amount of Class 5B GSI UK Note Claims for which voting instructions have been received from such Beneficial Holders thereof as listed in Item 2(b) below.

Item 2. Vote of Holders of the Class 5 Note Claims

a. As instructed by the Beneficial Holders of the Class 5A Senior Note Claims set forth in Item 1(a) above, the undersigned transmits the following votes of such Beneficial Holders:

To accept (vote FOR) the Plan:

Aggregate Amount of Beneficial Holders of the Class 5A Senior Note Claims

To reject (vote AGAINST) the Plan:

Aggregate Amount of Beneficial Holders of the Class 5A Senior Note Claims

The undersigned certifies that the following Beneficial Holders of the Class 5A Senior Note Claims, as identified by their respective customer account numbers or their respective sequence numbers set forth below, have delivered to the undersigned Ballots casting votes:

Customer Account No. and/or Customer Name	Accept the Plan (VOTE FOR) (Aggregate Unpaid Principal Amount)	Reject the Plan (VOTE AGAINST) (Aggregate Unpaid Principal Amount)	Releases (VOTE TO OPT- OUT OF RELEASE PROVISIONS INCLUDED IN PLAN)
1.
2.
3.
4.
5.

2

b. As instructed by the Beneficial Holders of the Class 5B GSI UK Note Claims set forth in Item 1(b) above, the undersigned transmits the following votes of such Beneficial Holders:

To accept (vote FOR) the Plan:

Aggregate Amount of Beneficial Holders of the Class 5B GSI UK Note Claims

To reject (vote AGAINST) the Plan:

Aggregate Amount of Beneficial Holders of the Class 5B GSI UK Note Claims

The undersigned certifies that the following Beneficial Holders of the Class 5B GSI UK Note Claims, as identified by their respective customer account numbers or their respective sequence numbers set forth below, have delivered to the undersigned Ballots casting votes:

Customer Account No. and/or Customer Name	Accept the Plan (VOTE FOR) (Aggregate Unpaid Principal Amount)	Reject the Plan (VOTE AGAINST) (Aggregate Unpaid Principal Amount)	Releases (VOTE TO OPT- OUT OF RELEASE PROVISIONS INCLUDED IN PLAN)
1.
2.
3.
4.
5.

Item 3. Certification

By signing this Master Ballot, the undersigned certifies that:

(a) each Beneficial Holder of Class 5 Note Claims whose votes are being transmitted by this Master Ballot have been provided with a copy of the Disclosure Statement relating to the Plan; and

3

(b) the undersigned is the registered or record owner of the aggregate amount of $             set forth in Item 1 and has full power and authority to vote to accept or reject the Plan. The undersigned also acknowledges that the solicitation of votes herein is subject to all the terms and conditions set forth in the Disclosure Statement and the Plan.

Dated:	Name of Voter:
	Signature:
	By:
	Title:
	Telephone Number:
	Street Address:
	City, State and Zip Code:
	Participant No.:

THIS BALLOT MUST BE RETURNED AS FOLLOWS:

If by U.S. Postal Service:

THE GARDEN CITY GROUP, INC.

ATTN: MES INTERNATIONAL, INC., ET AL.

P.O. BOX 9573

DUBLIN, OH 43017-4873

PHONE: 1-866-249-8112

If by Overnight Mail or Hand Delivery:

THE GARDEN CITY GROUP, INC.

5151 BLAZER PARKWAY, SUITE A

DUBLIN, OH 43017

PHONE: 1-866-249-8112

THIS BALLOT MUST BE RETURNED SO AS TO BE RECEIVED

ON OR BEFORE FEBRUARY 15, 2010 AT 4:00 P.M.

PREVAILING EASTERN TIME,

OR YOUR VOTE MAY NOT BE COUNTED.

4

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:	)	Chapter 11
	)
MES INTERNATIONAL, INC. , et al., 1	)	Case No. 09-14109 (PJW)
	)
Debtors.	)	Jointly Administered
	)

MASTER BALLOT FOR ACCEPTING OR REJECTING

THE DEBTORS’ CHAPTER 11 PLAN

CLASS 6A – HOLDINGS EQUITY INTERESTS

PLEASE READ AND FOLLOW THE ENCLOSED

VOTING INSTRUCTIONS CAREFULLY BEFORE COMPLETING THIS BALLOT.

PLEASE CHECK THE APPROPRIATE BOX BELOW

TO INDICATE YOUR ACCEPTANCE OR REJECTION OF THE PLAN.

THIS MASTER BALLOT IS ONLY FOR CASTING VOTES ON BEHALF OF BENEFICIAL HOLDERS OF THE CLASS 6A HOLDINGS EQUITY INTERESTS. THIS MASTER BALLOT IS ACCOMPANIED BY A PRE-ADDRESSED, POSTAGE PRE-PAID RETURN ENVELOPE THAT IS ADDRESSED TO THE GARDEN CITY GROUP, INC. (THE “SOLICITATION AGENT”). THIS MASTER BALLOT MUST BE RECEIVED BY THE SOLICITATION AGENT ON OR BEFORE FEBRUARY 15, 2010 AT 4:00 P.M. PREVAILING EASTERN TIME (THE “VOTING DEADLINE”). IF YOUR MASTER BALLOT IS NOT RECEIVED BY THE VOTING DEADLINE, THE DEBTORS MAY CONSIDER SUCH MASTER BALLOT INVALID.

This Master Ballot may not be used for any purpose other than submitting votes with respect to the First Modified Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Plan”). All capitalized terms used in this Master Ballot or in these instructions, but not otherwise defined herein, shall have the meaning ascribed to such terms in the Order Approving the Debtors’ Disclosure Statement and Relief Related Thereto (the “Solicitation Procedures Order”), First Modified Disclosure Statement Accompanying the Joint Chapter 11 Plan of Reorganization of MES International, Inc., GSI Group Inc. and GSI Group Corporation (the “Disclosure Statement”), or Plan, as the case may be.

¹ The Debtors and the last four digits of their respective taxpayer identification numbers are as follows: MES International, Inc. (1964); GSI Group Inc. (0412); and GSI Group Corporation (9358). The Debtors’ headquarters is located at 125 Middlesex Turnpike, Bedford, MA 01730.

This Master Ballot is to be used by you as a broker, bank, or other nominee; or as the agent of a broker, bank, or other nominee (each of the foregoing, a “Voting Nominee”); or as the proxy holder of a Voting Nominee or Beneficial Holder for the Class 6A Holdings Equity Interests, to transmit to the Solicitation Agent the votes of such Beneficial Holders in respect of their Class 6A Holdings Equity Interests to accept or reject the Plan.

Item 1. Amount of Class 6A Holdings Equity Interests

On January 8, 2010, the Voting Record Date, the undersigned was the record holder of a Class 6A Holdings Equity Interest in the amount of                      common shares for which voting instructions have been received from such Beneficial Holders thereof as listed in Item 2 below.

Item 2. Vote of Holders of the Class 6A Holdings Equity Interests

As instructed by the Beneficial Holders of the Class 6A Holdings Equity Interests set forth in Item 1 above, the undersigned transmits the following votes of such Beneficial Holders:

To accept (vote FOR) the Plan:

Aggregate Amount of Holders of the Class 6A Holdings Equity Interests

To reject (vote AGAINST) the Plan:

Aggregate Amount of Holders of the Class 6A Holdings Equity Interests

The undersigned certifies that the following Beneficial Holders of the Class 6A Holdings Equity Interests, as identified by their respective customer account numbers or their respective sequence numbers set forth below, have delivered to the undersigned Ballots casting votes:

Customer Account No. and/or Customer Name	Accept the Plan (VOTE FOR) (Aggregate Amount of Common Shares)	Reject the Plan (VOTE AGAINST) (Aggregate Amount of Common Shares)	Releases (VOTE TO OPT- OUT OF RELEASE PROVISIONS INCLUDED IN PLAN)
1.
2.
3.
4.
5.

2

Item 3. Certification

By signing this Master Ballot, the undersigned certifies that:

(a) each Beneficial Holder of Class 6A Holdings Equity Interests whose votes are being transmitted by this Master Ballot have been provided with a copy of the Disclosure Statement relating to the Plan; and

(b) the undersigned is the registered or record owner a Class 6A Holdings Equity Interest in the amount of                      common shares set forth in Item 1 and has full power and authority to vote to accept or reject the Plan. The undersigned also acknowledges that the solicitation of votes herein is subject to all the terms and conditions set forth in the Disclosure Statement and Plan.

Dated:	Name of Voter:
	Signature:
	By:
	Title:
	Telephone Number:
	Street Address:
	City, State and Zip Code:
	Participant No.:

3

THIS BALLOT MUST BE RETURNED AS FOLLOWS:

If by U.S. Postal Service:

THE GARDEN CITY GROUP, INC.

ATTN: MES INTERNATIONAL, INC., ET AL.

P.O. BOX 9573

DUBLIN, OH 43017-4873

PHONE: 1-866-249-8112

If by Overnight Mail or Hand Delivery:

THE GARDEN CITY GROUP, INC.

5151 BLAZER PARKWAY, SUITE A

DUBLIN, OH 43017

PHONE: 1-866-249-8112

THIS BALLOT MUST BE RETURNED SO AS TO BE RECEIVED

ON OR BEFORE FEBRUARY 15, 2010 AT 4:00 P.M.

PREVAILING EASTERN TIME,

OR YOUR VOTE MAY NOT BE COUNTED.

4

EX-25.1

Exhibit 25.1

FORM T-1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

¨ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)

THE BANK OF NEW YORK MELLON

TRUST COMPANY, N.A.

(Exact name of trustee as specified in its charter)

	95-3571558
(State of incorporation if not a U.S. national bank)	(I.R.S. employer identification no.)
700 South Flower Street Suite 500 Los Angeles, California	90017
(Address of principal executive offices)	(Zip code)

GSI GROUP CORPORATION

(Exact name of obligor as specified in its charter)

Michigan (State or other jurisdiction of incorporation or organization) 38-1859358 (I.R.S. employer identification no.)

GSI GROUP INC.

(Exact name of obligor as specified in its charter)

New Brunswick, Canada (State or other jurisdiction of incorporation or organization) 98-0110412 (I.R.S. employer identification no.)

EXCEL TECHNOLOGY, INC.

(Exact name of obligor as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 11-2780242 (I.R.S. employer identification no.)

CAMBRIDGE TECHNOLOGY, INC.

(Exact name of obligor as specified in its charter)

Massachusetts (State or other jurisdiction of incorporation or organization) 04-2703882 (I.R.S. employer identification no.)

CONTINUUM ELECTRO-OPTICS, INC.

(Exact name of obligor as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 11-3653902 (I.R.S. employer identification no.)

CONTROL LASER CORPORATION

(Exact name of obligor as specified in its charter)

Florida (State or other jurisdiction of incorporation or organization) 59-1097022 (I.R.S. employer identification no.)

- 2 -

THE OPTICAL CORPORATION

(Exact name of obligor as specified in its charter)

California (State or other jurisdiction of incorporation or organization) 95-3509324 (I.R.S. employer identification no.)

PHOTO RESEARCH, INC.

(Exact name of obligor as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 95-4548630 (I.R.S. employer identification no.)

QUANTRONIX CORPORATION

(Exact name of obligor as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 11-2143586 (I.R.S. employer identification no.)

SYNRAD, INC.

(Exact name of obligor as specified in its charter)

Washington (State or other jurisdiction of incorporation or organization) 58-2408307 (I.R.S. employer identification no.)

MICROE SYSTEMS CORP.

(Exact name of obligor as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 04-3248088 (I.R.S. employer identification no.)

- 3 -

MES INTERNATIONAL INC.

(Exact name of obligor as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 04-3551964 (I.R.S. employer identification no.)

125 Middlesex Turnpike Bedford, Massachusetts (Address of principal executive offices) 01730 (Zip code)

12.25% Senior Secured PIK Election Notes due 2014

(Title of the indenture securities)

- 4 -

1. General information. Furnish the following information as to the trustee:

(a) Name and address of each examining or supervising authority to which it is subject.

Name	Address
Comptroller of the Currency United States Department of the Treasury	Washington, D.C. 20219
Federal Reserve Bank	San Francisco, California 94105
Federal Deposit Insurance Corporation	Washington, D.C. 20429

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

2. Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

16. List of Exhibits.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the “Act”) and 17 C.F.R. 229.10(d).

1. A copy of the articles of association of The Bank of New York Mellon Trust Company, N.A., formerly known as The Bank of New York Trust Company, N.A. (Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121948 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152875).

2. A copy of certificate of authority of the trustee to commence business. (Exhibit 2 to Form T-1 filed with Registration Statement No. 333-121948).

3. A copy of the authorization of the trustee to exercise corporate trust powers (Exhibit 3 to Form T-1 filed with Registration Statement No. 333-152875).

- 5 -

4. A copy of the existing by-laws of the trustee (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-162713).

6. The consent of the trustee required by Section 321(b) of the Act (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-152875).

7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.

- 6 -

SIGNATURE

Pursuant to the requirements of the Act, the trustee, The Bank of New York Mellon Trust Company, N.A., a banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Pittsburgh and State of Pennsylvania, on the 7th day of July, 2010.

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
By:	/S/ LESLIE LOCKHART
Name:	LESLIE LOCKHART
Title:	SENIOR ASSOCIATE

- 7 -

EXHIBIT 7

Consolidated Report of Condition of

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

of 700 South Flower Street, Suite 200, Los Angeles, CA 90017

At the close of business March 31, 2010, published in accordance with Federal regulatory authority instructions.

	Dollar Amounts in Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin		1,504
Interest-bearing balances		288
Securities:
Held-to-maturity securities		12
Available-for-sale securities		581,259
Federal funds sold and securities purchased under agreements to resell:
Federal funds sold		113,000
Securities purchased under agreements to resell		0
Loans and lease financing receivables:
Loans and leases held for sale		0
Loans and leases, net of unearned income		0
LESS: Allowance for loan and lease losses		0
Loans and leases, net of unearned income and allowance		0
Trading assets		0
Premises and fixed assets (including capitalized leases)		10,486
Other real estate owned		0
Investments in unconsolidated subsidiaries and associated companies		2
Direct and indirect investments in real estate ventures		0
Intangible assets:
Goodwill		856,313
Other intangible assets		237,642
Other assets		166,465
Total assets	$	1,966,971

1

LIABILITIES
Deposits:
In domestic offices	533
Noninterest-bearing	533
Interest-bearing	0
Not applicable
Federal funds purchased and securities sold under agreements to repurchase:
Federal funds purchased	0
Securities sold under agreements to repurchase	0
Trading liabilities	0
Other borrowed money:
(includes mortgage indebtedness and obligations under capitalized leases)	268,691
Not applicable
Not applicable
Subordinated notes and debentures	0
Other liabilities	210,010
Total liabilities	479,234
Not applicable

EQUITY CAPITAL

Perpetual preferred stock and related surplus	0
Common stock	1,000
Surplus (exclude all surplus related to preferred stock)	1,121,520
Not applicable
Retained earnings	364,077
Accumulated other comprehensive income	1,140
Other equity capital components	0
Not available
Total bank equity capital	1,487,737
Noncontrolling (minority) interests in consolidated subsidiaries	0
Total equity capital	1,487,737
Total liabilities and equity capital	1,966,971

I, Karen Bayz, Managing Director of the above-named bank do hereby declare that the Reports of Condition and Income (including the supporting schedules) for this report date have been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and are true to the best of my knowledge and belief.

Karen Bayz ) Managing Director

We, the undersigned directors (trustees), attest to the correctness of the Report of Condition (including the supporting schedules) for this report date and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct.

Troy Kilpatrick, President	)
Frank P. Sulzberger, MD	)	Directors (Trustees)
William D. Lindelof, MD	)

2