Exhibit 10.3

 

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FTI Consulting

3 Times Square

11th Floor

New York, NY 10036

212.247.1010 telephone

212.841.9350 facsimile

www.fticonsulting.com

CONFIDENTIAL

May 6, 2010

GSI Group, Inc.

GSI Group Corporation

MES International, Inc.

125 Middlesex Turnpike

Bedford, Massachusetts 01730

Attention:

Ms. Marina Hatsopoulos

Dear Ms. Hatsopoulos:

The purpose of this letter is to confirm the understanding and agreement (the
“Agreement”) between GSI Group, Inc., GSI Group Corporation and MES
International, Inc. (collectively, the “Client”) and FTI Consulting, Inc.
(“FTI”) concerning the Client’s engagement of FTI to provide certain temporary
employees to the Client to provide post-petition crisis and turnaround
management services (the “Services”) in connection with Client’s current cases
under Title 11, Chapter 11 of the United States Code (“Chapter 11”) which are
being jointly administered under case 09-14109 in the District of Delaware (the
“Court”). This Agreement is effective on May 6th, 2010 (the “Effective Date”).
The FTI Standard Terms and Conditions attached hereto as Exhibit “A” are also
incorporated herein and forms part of this Agreement.

 

1. Temporary Officers, Hourly Temporary Employees and Services

FTI will provide Michael E. Katzenstein to serve as the Client’s Chief
Restructuring Officer (the “CRO”) and Gabriel E. Bresler to serve as the
Client’s Associate Chief Restructuring Officer (the “Temporary Officers”)
reporting to the Board of Directors. The Temporary Officers, as well as any
additional Hourly Temporary Staff, (as defined below), shall have such duties as
the Client’s board of directors (the “Board”), or any committee of the Board to
whom appropriate authority has been delegated by the Board in connection with
the Chapter 11 (the “Committee”), may from time to time determine, and shall at
all times report to and be subject to supervision by the Board and/or Committee.
Without limiting the foregoing, the Temporary Officers, as well as any Hourly
Temporary Staff, shall work with other senior management of the Client, and
other professionals, to provide the Services.

In addition to providing the Temporary Officers, FTI may also provide the Client
with additional staff (the “Hourly Temporary Staff” and, together with the
Temporary Officers, the “FTI Professionals”), subject to the terms and
conditions of this Agreement. The Hourly Temporary Staff may be assisted by or
replaced by other FTI professionals reasonably satisfactory to the Board and/or
Committee, as required, who shall also become Hourly Temporary Staff for
purposes hereof. FTI will keep the Board and/or Committee reasonably informed as
to FTI’s staffing and will not add additional Hourly Temporary Staff to the
assignment without first consulting with the Client.

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The engagement of FTI to perform the Services shall be subject to the approval
of the Bankruptcy Court and shall be substantially as provided in this Agreement
as modified by the retention order approved by the Bankruptcy Court. Client
agrees, at Client’s expense, to file an application (the “Application”) to
employ FTI as crisis and turnaround manager nunc pro tunc to the Effective Date
pursuant to § 363 of the Bankruptcy Code. The Client agrees to file all required
applications, including the Application, for the employment or retention of FTI
at the earliest practical time.

The Services do not include (i) audit, legal, tax, environmental, accounting,
actuarial, employee benefits, insurance advice or similar specialist and other
professional services which are typically outsourced and which shall be obtained
directly where required by the Client at Client’s expense; or (ii) investment
banking, including valuation or securities analysis, including advising any
party or representation of the Client on the purchase, sale or exchange of
securities or representation of the Client in securities transactions. FTI is
not a registered broker-dealer in any jurisdiction and will not offer advice or
its opinion or any testimony on valuation or exchanges of securities or on any
matter for which FTI is not appropriately licensed or accredited. An affiliate
of FTI is a broker-dealer but is not being engaged by the Client to provide any
investment banking or broker-dealer services. The Client agrees to supply office
space, and office and support services to FTI as reasonably requested by FTI in
connection with the performance of its duties hereunder.

FTI is providing certain non-bankruptcy services to the Client assisting the
Chief Financial Officer with accounting and reporting services. FTI does not
believe this assistance is related to the Chapter 11 cases.

 

2. Compensation to FTI

Monthly Fee

For services rendered in connection with this assignment, the Client agrees to
pay FTI a monthly, non-refundable advisory fee of $175,000 per month for the
services of Michael E. Katzenstein and Gabriel E. Bresler. Any additional
professionals added as Hourly Temporary Staff will be billed at their current
hourly rate. Fees are payable in advance and may be billed as frequently as
weekly and will be billed not less frequently than monthly.

The monthly fee provided for Michael E. Katzenstein and Gabriel E. Bresler is a
discounted fee that is less than the fees that the Client would incur if FTI
were to bill it on an hourly basis. The normal hourly billing rates for any
additional professionals with the skills and experience needed for engagements
of this kind, for 2010 and which are subject to period revision, are as follows:
Senior Managing Directors - $795 to $885; Managing Directors - $675 to $725;
Directors - $545 to $620; Consultants - $305 to $485;

Completion Fee:

The Client agrees that FTI shall have a Completion Fee opportunity in partial
consideration of the discounted monthly flat fee and to compensate FTI for
achieving the restructuring objectives of the Client. If, during the term of
this Agreement or during the three (3) months following the termination of this
Agreement (which, if a Sale agreement is entered into during such three month
period following termination, shall be extended in respect of such agreement
until it has been consummated or terminated), the Audit Preparation is completed
and Client completes a Restructuring or Sale, FTI

 

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will earn a Completion Fee of $1,400,000, payable in cash on the later of the
date the Audit Preparation is completed, the effective date of the Restructuring
or on closing of the Sale, as the case may be. After August 6, 2010, each
Monthly Fee of $175,000 actually paid (but not amounts paid for Hourly Temporary
Staff) will be credited against the Completion Fee when earned, but in no event
will the Completion Fee be reduced below zero.

“Audit Preparation” means that the required Temporary Officers are prepared to
approve the final 2009 financial statement closing package for submission to the
Client’s external auditors for purposes of their 2009 audit procedures.

“Restructuring” means the entry of a final non-appealable order of the
Bankruptcy Court confirming a plan of reorganization for the Client.

“Sale” means, collectively, any transaction or series of transaction involving
an acquisition, merger, consolidation or other business combination pursuant to
which the business or assets or substantially all of the assets of any or all of
the entities constituting the Client are, directly or indirectly, combined with
another company, other than in the ordinary course of business; the acquisition,
directly or indirectly, by a buyer or buyers (which term shall include a “group”
of persons as defined in Section 13(d) of the Securities Exchange Act of 1934,
as amended), of equity interests or options, or any combination thereof,
constituting a majority of the then outstanding stock of any or all of the
entities constituting the Client or possessing the majority of then outstanding
voting power of any or all of the entities constituting the Client; any other
purchase or acquisition, directly or indirectly, by a buyer or buyers of assets
or substantially all of the assets, securities or other interests of any or all
of the entities constituting the Client; and the formation of a joint venture
partnership with any or all of the entities constituting the Client or direct
investment in any or all of the entities constituting the Client for the purpose
of effecting a transfer of an interest in the Client to a third party.

In the event that the Client closes upon a Sale in which the Audit Preparation
is not necessary or required, then FTI shall be entitled to a reduced Completion
Fee in a reasonable amount to be agreed upon by FTI and the Client taking into
account FTI’s services in connection with such Sale. In the event that FTI and
the Client are unable to agree on an appropriate amount of the reduced
Completion Fee, such amount shall be set by the Bankruptcy Court.

The Completion Fee shall be subject to any required approval of the Bankruptcy
Court having jurisdiction over the Chapter 11 Cases. The Client agrees to file
any required Bankruptcy Court application for approval of the Completion Fee.

Expenses:

In addition to the fees outlined above, FTI will bill for reasonable direct
expenses. On no less than a bi-weekly basis, FTI will provide the Client with
reasonably detailed billing statements with respect to such expenses. Direct
expenses include reasonable and customary out-of-pocket expenses which are
billed directly to the engagement such as certain telephone, overnight mail,
messenger, travel, meals, accommodations and other expenses specifically related
to the engagement. Further, if FTI and/or any of its employees are required to
testify or provide evidence at or in connection with any judicial or
administrative proceeding relating to this matter, FTI will be compensated by
you at its regular hourly rates and reimbursed for reasonable allocated and
direct expenses (including counsel fees) with respect thereto.

 

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Cash on Account:

Immediately upon execution of this Agreement or as authorized by the Court,
Client will fund the amount of $175,000 “on account,” to be held as an
“evergreen retainer” and as continuing security for the payment of fees and
expenses to FTI and to be applied to any unpaid amounts due to FTI at the
completion of our engagement, with the unused portion of the retainer refunded
to the Client upon payment in full of all fees and expenses. Notwithstanding the
foregoing, FTI may apply the cash held on account to any unpaid invoices in the
event the Client fails to make timely payment. Subject to obtaining any required
Bankruptcy Court approvals, the Client agrees to increase or supplement the Cash
on Account from time to time during the course of the Engagement in such amounts
as the Client and we mutually shall agree are reasonably necessary to a level
that will be sufficient to fund Engagement fees, charges, and disbursements to
be incurred.

Invoicing and Payments:

FTI will send the Client periodic invoices for fees, charges and disbursements
and, in certain circumstances, an invoice may be for estimated fees, charges and
disbursements through a date certain. Each invoice constitutes a request for an
interim payment against the fee to be determined at the conclusion of our
Services. The Client agrees upon submission of each such invoice to wire the
invoice amount to us within two (2) business days of our issuing the invoice,
without prejudice to the Client’s right to advise us of any differences it may
have with respect to such invoice.

Payments to FTI shall be made by wire transfer to the following account:

FTI Wire Instructions:

Bank of America

ABA # 0260-0959-3

Account # 003939577164

Additional Provisions Regarding Fees:

 

a) The Client agrees to promptly notify FTI if the Client or any of its
subsidiaries or affiliates extends (or solicits the possible interest in
receiving) an offer of employment to a principal or employee of FTI involved in
this Engagement and agrees that FTI has earned and is entitled to a cash fee,
upon hiring, equal to 150% of the aggregate first year’s annualized
compensation, including any guaranteed or target bonus and equity award, to be
paid to FTI’s former principal or employee that the Client or any of it
subsidiaries or affiliates hires at any time up to one year subsequent to the
date of the final invoice rendered by FTI with respect to this Engagement.

 

b) FTI may stop work or terminate the Agreement immediately upon the giving of
written notice to the Client (i) if payments are not made in accordance with
this Agreement, (ii) if the Application is not approved by the Bankruptcy Court,
(iii) if the Chapter 11 case is dismissed or converted to a Chapter 7
proceeding, or (iv) if a Chapter 11 Trustee or other responsible person is
appointed.

 

c)

(i) In the event that FTI is employed post-petition under § 363 of the
Bankruptcy Code, FTI shall invoice the Client for its monthly fees every two
weeks in advance and the Client shall pay FTI’s invoices promptly, within two
(2) business days of invoice date. If, and only if, local Bankruptcy rules or
the order approving the Application so require, FTI shall file with and serve on
creditors entitled to notice thereof, a statement of staffing, professional
services, compensation or expenses, on a quarterly basis, or as the Bankruptcy
Court or rules may direct, and creditors and other parties

 

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  in interest shall have an opportunity to object thereto and request a hearing
thereon. (ii) In the event that FTI is employed post-petition as a “professional
person” pursuant to § 327 of the Bankruptcy Code, Bankruptcy Court approval will
generally be required to pay FTI’s fees and expenses for Post-petition Services.
In most cases of this size and complexity, on request of a party in interest,
the bankruptcy court permits the payment of interim fees during the case. The
Client agrees that in this situation it will, at the Client’s expense, request
the Bankruptcy Court to establish a procedure for the payment of interim fees
during the case that would permit payment of interim fees. If the Bankruptcy
Court approves such a procedure, we will submit invoices on account against our
final fee. These interim invoices will be based on such percentage as the
bankruptcy court allows of our internal time charges and costs and expenses for
the work performed during the relevant period and will constitute a request for
an interim payment against the reasonable fee to be determined at the conclusion
of our Engagement.

 

d) Any unpaid post-petition fees, charges and disbursements will be due and
payable immediately upon entry of an order containing such court approval or at
such time thereafter as instructed by the court. The Client understands that
while the arrangement in this paragraph may be altered in whole or in part by
the bankruptcy court, the Client shall nevertheless remain liable for payment of
court approved post-petition fees and expenses. Such items are afforded
administrative priority under 11 U.S.C. §503(b)(l). The Bankruptcy Code provides
in pertinent part, at 11 U.S.C. §1l29(a)(9)(A), that a plan cannot be confirmed
unless administrative claims are paid in full in cash on the effective date of
any plan (unless the holders of such claims agree to different treatment). It is
agreed and understood that the unused portion, if any, of the Cash on Account
shall be held by us and applied against the final fee application filed and
approved by the court.

 

e) Client agrees that FTI is not an employee of the Client and the FTI employees
and independent FTI contractors who perform the Services are not employees of
the Client, and they shall not receive a W-2 from the Client for any fees earned
under this engagement, and such fees are not subject to any form of withholding
by the Client. The Client shall provide FTI a standard form 1099 on request for
fees earned under this Engagement.

 

f) Copies of Invoices shall be sent by facsimile or email as follows:

To the Client at:

GSI Group, Inc.

GSI Group Corporation

MES International, Inc.

125 Middlesex Turnpike

Bedford, Massachusetts 01730

Attention: Ms. Marina Hatsopoulos

 

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3. Term

This Agreement is terminable by the Client or by FTI at any time upon the giving
of thirty (30) days written notice. Upon such termination by the Client (the
“Termination Date”), FTI shall cease work and the Client shall have no further
obligation for fees and expenses of FTI arising or incurred after the
Termination Date, provided, however, that, notwithstanding any termination by
Client or by FTI in the circumstances described in paragraph (b) of “Additional
provisions Regarding Fees”,

 

  (A) The Client shall reimburse FTI for its out-of-pocket expenses (the
“Termination Expenses”) incurred in connection with commitments made by FTI
prior to the Termination Date with respect to advance travel arrangements
reasonably incurred, to the extent FTI is unable to obtain refunds of such
expenses. FTI shall provide the Client with reasonable documentation to
substantiate all Termination Expenses for which payment is requested; and

 

  (B) Unless FTI is in default of this Agreement, termination shall not affect
FTI’s entitlement to the Completion Fee; provided, however, that FTI shall not
be entitled to the Completion Fee if it terminates this Agreement for reasons
other than the circumstances described in paragraph (b) of “Additional
Provisions Regarding Fees”.

 

4. Availability of Information

In connection with FTI’s activities on the Client’s behalf, the Client agrees
(i) to furnish FTI with all information and data concerning the business and
operations of the Client which FTI reasonably requests, and (ii) to provide FTI
with reasonable access to the Client’s officers, directors, partners, employees,
retained consultants, independent accountants, and legal counsel. FTI shall not
be responsible for the truth or accuracy of materials and information received
by FTI under this agreement.

 

5. Notices

Notices under this Agreement to the Client shall be provided as set forth in
paragraph 2(f).

Notices to FTI shall be to:

3 Times Square, 9th Floor

New York, NY 10036

Attn: Michael E. Katzenstein

Phone: (214) 384-4909

Fax: (214) 260-7127

Email: mike.katzenstein@fticonsulting.com

Notices shall be provided by (a) fax and email, (b) hand delivery, or
(c) overnight delivery. If provided by fax and email or hand delivery, they
shall be deemed effective the date given. If provided by overnight delivery,
they shall be deemed effective on the date of actual receipt.

 

6. Miscellaneous

This Agreement: represents the entire understanding of the parties hereto and
supersedes any and all other prior agreements among the parties regarding the
subject matter hereof; shall be binding upon and inure to the benefit of the
parties and their respective heirs, representatives, successors and assigns; may
be executed by facsimile (followed by originals sent via regular mail), and in
two or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument; and may not
be waived, modified or amended unless in writing and signed by a representative
of the Client and FTI. The provisions of this Agreement shall be severable. No
failure to delay in exercising any right, power or privilege related hereto, or
any single or partial exercise thereof, shall operate as a waiver thereof.

 

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If this letter correctly sets forth our understanding, please so acknowledge by
signing below and returning a signed copy of this letter to us.

 

Very truly yours, FTI CONSULTING, INC. By:   /s/ Michael E. Katzenstein Name:  
Michael E. Katzenstein Title:   Senior Managing Director

 

ACCEPTED AND AGREED this              day of May, 2010. GSI GROUP INC., on
behalf of itself and its subsidiaries listed below By:   /s/ Marina Hatsopoulos

Name:

Title:

 

Marina Hatsopoulos

Director

Date:   May 14, 2010 GSI GROUP CORPORATION MES INTERNATIONAL, INC.

 

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EXHIBIT “A”

FTI CONSULTING, INC.

STANDARD TERMS AND CONDITIONS

The following are the Standard Terms and Conditions on which we will provide the
Services to you set forth within the attached letter of engagement with GSI
Group, Inc. GSI Corporation and MES International, Inc. dated May 6, 2010. The
Engagement letter and the Standard Terms and Conditions (collectively the
“Engagement Contract”) form the entire agreement between us relating to the
Services and replace and supersede any previous proposals, letters of
engagement, undertakings, agreements, understandings, correspondence and other
communications, whether written or oral, regarding the Services. The headings
and titles in the Engagement Contract are included to make it easier to read but
do not form part of the Engagement Contract.

 

1. Reports and Advice

 

1.1 Use and purpose of advice and reports – Any advice given or report issued by
us is provided solely for your use and benefit and only in connection with the
purpose in respect of which the Services are provided. Unless required by law,
you shall not provide any advice given or report issued by us to any third
party, or refer to us or the Services, without our prior written consent. In no
event, regardless of whether consent has been provided, shall we assume any
responsibility to any third party to which any advice or report is disclosed or
otherwise made available.

 

2. Information and Assistance

 

2.1 Provision of information and assistance – Our performance of the Services is
dependent upon your providing us with such information and assistance as we may
reasonably require from time to time.

 

2.2 Punctual and accurate information – You shall use reasonable skill, care and
attention to ensure that all information we may reasonably require is provided
on a timely basis and is accurate and complete and relevant for the purpose for
which it is required. You shall also notify us if you subsequently learn that
the information provided is incorrect or inaccurate or otherwise should not be
relied upon.

 

2.3 No assurance on financial data – While our work may include an analysis of
financial and accounting data, the Services will not include an audit,
compilation or review of any kind of any financial statements or components
thereof. Client management will be responsible for any and all financial
information they provide to us during the course of this Engagement, and we will
not examine or compile or verify any such financial information. Moreover, the
circumstances of the Engagement may cause our advice to be limited in certain
respects based upon, among other matters, the extent of sufficient and available
data and the opportunity for supporting investigations in the time period.
Accordingly, as part of this Engagement, we will not express any opinion or
other form of assurance on financial statements of the Client.

 

2.4 Prospective financial information—In the event the Services involve
prospective financial information, our work will not constitute an examination
or compilation, or apply agreed-upon procedures, in accordance with standards
established by the American Institute of Certified Public Accountants or
otherwise, and we will express no assurance of any kind on such information.
There will usually be differences between estimated and actual results, because
events and circumstances frequently do not occur as expected, and those
differences may be material. We will take no responsibility for the
achievability of results or events projected or anticipated by the management of
the Client.

 

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3. Additional Services

 

3.1 Responsibility for other parties – You shall be solely responsible for the
work and fees of any other party engaged by you to provide services in
connection with the Engagement regardless of whether such party was introduced
to you by us. Except as provided in this Engagement Contract, we shall not be
responsible for providing or reviewing the advice or services of any such third
party, including advice as to legal, regulatory, accounting or taxation matters.
Further, we acknowledge that we are not authorized under our Engagement Contract
to engage any third party to provide services or advice to you, other than our
agents or independent contractors engaged to provide Services, without your
written authorization.

 

4. Confidentiality

 

4.1 Restrictions on confidential information – Both parties agree that any
confidential information received from the other party shall only be used for
the purposes of providing or receiving Services under this or any other contract
between us. Except as provided below, neither party will disclose the other
party’s confidential information to any third party without the other party’s
consent. Confidential information shall not include information that:

 

  4.1.1  is or becomes generally available to the public other than as a result
of a breach of an obligation under this Clause 4.1;

 

  4.1.2  is acquired from a third party who, to the recipient party’s knowledge,
owes no obligation of confidence in respect of the information; or

 

  4.1.3  is or has been independently developed by the recipient.

 

4.2 Disclosing confidential information – Notwithstanding Clause 1.1 or 4.1
above, either party will be entitled to disclose confidential information of the
other to a third party to the extent that this is required by valid legal
process, provided that (and without breaching any legal or regulatory
requirement) where reasonably practicable not less than 2 business days’ notice
in writing is first given to the other party.

 

4.3 Citation of engagement – Without prejudice to Clause 4.1 and Clause 4.2
above, to the extent our engagement is or becomes known to the public, we may
cite the performance of the Services to our clients and prospective clients as
an indication of our experience, unless we and you specifically agree otherwise
in writing.

 

4.4 Internal quality reviews – Notwithstanding the above, we may disclose any
information referred to in this Clause 4 to any other FTI entity or use it for
internal quality reviews.

 

4.5 Maintenance of workpapers – Notwithstanding the above, we may keep one
archival set of our working papers from the Engagement, including working papers
containing or reflecting confidential information, in accordance with our
internal policies.

 

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5. Termination

Termination of Engagement with notice – This Agreement is terminable by the
Client or by FTI at any time upon the giving of thirty (30) days written notice.
Upon such termination by the Client (the “Termination Date”), FTI shall cease
work and the Client shall have no further obligation for fees and expenses of
FTI arising or incurred after the Termination Date, provided, however, that,
notwithstanding any termination by the Client or by FTI in the circumstances
described in paragraph (b) of “Additional Provisions Regarding Fees”,

 

  a) The Client shall reimburse FTI for its out-of-pocket expenses (the
“Termination Expenses”) incurred in connection with commitments made by FTI
prior to the Termination Date with respect to advance travel arrangements
reasonably incurred, to the extent FTI is unable to obtain refunds of such
expenses. FTI shall provide the Client with reasonable documentation to
substantiate all Termination Expenses for which payment is requested; and

 

  b) Unless FTI is in material default of this Agreement, termination shall not
affect FTI’s entitlement to the Completion Fee; provided, however, that FTI
shall not be entitled to the Completion Fee if it terminates this Agreement for
reasons other than the circumstances described in paragraph (b) of “Additional
Provisions Regarding Fees”.

 

5.1 Continuation of terms – The terms of the Engagement that by their context
are intended to be performed after termination or expiration of this Engagement
Contract, including but not limited to, Clauses 3 and 4 of the Engagement
letter, and Clauses 1.1, 4, 6 and 7 of the Standard Terms and Conditions, are
intended to survive such termination or expiration and shall continue to bind
all parties.

 

6. Indemnification and Liability Limitation; Waiver of Jury Trial

 

6.1 Indemnification and Insurance – Subject to any limitation post-petition
required by the Bankruptcy Court, the Client agrees to indemnify and hold
harmless FTI and its shareholders, directors, officers, managers, employees,
contractors, agents and controlling persons (each, an “Indemnified Party”) from
and against any losses, claims, damages or expenses, or if same was or is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any threatened, pending or
completed action, suit, proceeding or alternative dispute resolution mechanism,
or any hearing, inquiry or investigation, in each case by reason of (or arising
in part out of) any event or occurrence related to this agreement or any
predecessor agreement for services or the fact that any Indemnified Party is or
was an agent, officer director, employee or fiduciary of the Client, or by
reason of any action or inaction on the part of any Indemnified Party while
serving in such capacity (an “Indemnifiable Event”) against expenses (including
reasonable attorneys’ fees and disbursements), judgments, fines, settlements and
other amounts actually and reasonably incurred in connection with any
Indemnifiable Event. The Application shall include the assumption by the Client
of FTI’s right to indemnification in respect of its actions under this Agreement
prior to the Petition Date. The Indemnified Party shall promptly forward to the
Client all written notifications and other matter communications regarding any
claim that could trigger the Client’s indemnification obligations under this
Section 6. If the Client so elects or is requested by an Indemnified Party, the
Client will assume the defense of such action or proceeding, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of the reasonable fees and disbursements of such counsel. In the event,
however, such Indemnified Party is advised by counsel that having common counsel
would present such counsel with a conflict of interest or if the defendants in,
or targets of, any such action or proceeding include both an Indemnified Party
and the Client, and such Indemnified Party is advised by counsel that there may
be legal defenses available to it or other Indemnified Parties that are
different from or in addition to those available to the Client, or if the Client
fails to assume the defense of the action or proceeding or to employ counsel
reasonably satisfactory to such Indemnified Party, in either case in a timely
manner, then such Indemnified Party may employ separate counsel to represent or
defend it in any such action or proceeding and the Client will pay the
reasonable fees and disbursements of such counsel; provided, however, that the
Client will not be required to pay the fees and disbursements of more than one
separate counsel (in addition to local counsel) for an Indemnified Party in any
jurisdiction in any single action or proceeding. In any action or proceeding the
defense of which the Client assumes, the Indemnified Party will have the right
to participate in such litigation and to retain its own counsel at such
Indemnified Party’s own expense. The Client further agrees that the Client will
not, without the prior written consent of the Indemnified Party (which consent
shall not be unreasonably withheld or delayed), settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the Indemnified Party or any other Indemnified

 

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  Party is an actual or potential party to such claim, action, suit or
proceeding) unless (i) to the extent that such settlement, compromise or consent
purports directly or indirectly to cover the Indemnified Party or any other
Indemnified Party, such settlement, compromise or consent includes an
unconditional release of the Indemnified Party and each other Indemnified Party
from all liability arising out of such claim, action, suit or proceeding, or
(ii) to the extent that such settlement, compromise or consent does not purport
directly or indirectly to cover the Indemnified Party or any other Indemnified
Party, the Client has given the Indemnified Party reasonable prior written
notice thereof and used all reasonable efforts, after consultation with the
Indemnified Party, to obtain an unconditional release of the other Indemnified
Parties hereunder from all liability arising from all liability arising out of
such claim, action, suit or proceeding. The Indemnified Party shall not enter
into any closing agreement or final settlement that could trigger the Client’s
indemnification obligations under this Section 6 without the written consent of
the Client, which shall not unreasonably be withheld or delayed or conditioned.
The Client will not be liable for any settlement of any action, claim, suit or
proceeding affected without the Client’s prior written consent, which consent
shall not be unreasonably withheld or delayed or conditioned, but if settled
with the consent of the Client or if there be a final judgment for the
plaintiff, the Client agrees to indemnify and hold harmless the Indemnified
Party from and against any loss or liability by reason of such settlement or
judgment, as the case may be.

 

6.2 This indemnity shall not apply to any portion of any such losses, claims,
damages, liabilities and expenses to the extent it is found in a final judgment
by a court of competent jurisdiction to have resulted primarily from the bad
faith, gross negligence, willful misconduct or violation of law of any such
Indemnified Party. The Client agrees to use commercially reasonable best efforts
to (i) include Michael E. Katzenstein and Gabriel E. Bresler, and any other FTI
personnel who assume officer or director positions with the Client or who
perform Services hereunder, FTI and its agents, employees, officers,
subcontractors, directors, joint venture partners and members, as insureds under
the Client’s directors and officers insurance; and (ii) unless it is unable to
do so at a commercially reasonable cost, purchase a three-year directors and
officers insurance “tail” or runoff policy (or such a policy for such shorter
period as Client has the right to or is otherwise able to purchase) covering the
period of FTI’s service.

In connection with this engagement Client represents to FTI that Client hereby
represents that (i) it has timely remitted and will continue to timely remit to
the appropriate beneficiaries all employee source deductions, payroll and other
taxes, benefits deductions, and contribution to employee benefit programs, and
has timely collected and remitted sales and use and other similar taxes to
appropriate collecting authorities and will continue timely to do so; (ii) there
is no litigation or other proceeding pending, or to knowledge of Client,
threatened (nor is Client aware of facts that could give rise to such), in each
case that seeks or could give rise to personal liability of officers and
directors of Client; and (iii) Client has been in continuing compliance with all
applicable laws and regulations concerning the discharge, treatment, storage,
transportation or use of hazardous materials and is aware of no facts or
circumstances that could give rise to Client responsibility or liability under
such laws and regulations.

 

6.3 Limitation of liability – You agree that no Indemnified Person shall have
any liability as a result of your retention of FTI, the execution and delivery
of this Engagement Contract, the provision of Services or other matters relating
to or arising from this Engagement Contract, other than liabilities that shall
have been determined by final non-appealable order of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Indemnified Person or Persons in respect of whom such liability is asserted.

 

6.4 WAIVER OF JURY TRIAL – TO FACILITATE JUDICIAL RESOLUTION AND SAVE TIME AND
EXPENSE, YOU AND FTI IRREVOCABLY AND UNCONDITIONALLY AGREE NOT TO DEMAND A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THE SERVICES OR ANY SUCH OTHER MATTER.

 

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7. Governing Law and Jurisdiction – The Engagement Contract shall be governed by
and interpreted in accordance with the laws of the State of New York, without
giving effect to the choice of law provisions thereof. The Bankruptcy Court
having jurisdiction over the Client’s Bankruptcy case shall have exclusive
jurisdiction in relation to any claim, dispute or difference concerning the
Engagement Contract and any matter arising from it. The parties submit to the
jurisdiction of such Courts and irrevocably waive any right they may have to
object to any action being brought in these Courts, to claim that the action has
been brought in an inconvenient forum or to claim that those Courts do not have
jurisdiction.

FTI CONSULTING, INC.

Confirmation of Standard Terms and Conditions

We agree to engage FTI Consulting, Inc. upon the terms set forth in these
Standard Terms and Conditions as outlined above.

 

GSI GROUP, INC. By:      

[Print Name]

[PrintTitle]

Date:     GSI GROUP CAPITAL, INC. By:      

[Print Name]

[PrintTitle]

Date:     MES INTERNATIONAL, INC. By:      

[Print Name]

[PrintTitle]

Date:    

 

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Exhibit B to Post-Petition Services Agreement

FTI Professionals

Temporary Officers

 

             Name  

Description

Michael E. Katzenstein*

  Chief Restructuring Officer

Gabriel E. Bresler*

  Associate Chief Restructuring Officer

Additional Hourly Temporary Staff

 

             Name  

Description

TBD

     

 

* Initial FTI Professionals

** Supplementary professional staff. Any use of these resources will not cause
an increase in the Monthly Service Fee without the Client’s subsequent written
approval.

 

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