EXHIBIT 10.69

FIRST AMENDMENT TO CREDIT AGREEMENT

This FIRST AMENDMENT TO CREDIT AGREEMENT dated as of March 9, 2012 (this “First
Amendment”) is made by and among GSI Group Corporation, a Michigan corporation
(the “Borrower”), GSI Group Inc., a company continued and existing under the
laws of the Province of New Brunswick, Canada (“Holdings”), each of the other
Guarantors party hereto, each lender party hereto (collectively, the “Lenders”
and individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative
Agent (in such capacity, the “Administrative Agent”), Swing Line Lender and L/C
Issuer.

The Borrower, the Lenders and the Administrative Agent are parties to that
certain Credit Agreement dated as of October 19, 2011 (as in effect on the date
hereof, the “Credit Agreement”), pursuant to which the Lenders have agreed to
make certain financial accommodations to the Borrower. The Borrower, the Lenders
and Administrative Agent wish to amend the Credit Agreement in certain respects,
all on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties signatory hereto agree
as follows:

1. Definitions. Except as otherwise defined in this First Amendment, terms
defined in the Credit Agreement are used herein as defined therein.

2. Amendments. Subject to the satisfaction of the conditions precedent specified
in Section 3 below, the Credit Agreement shall be amended as follows:

(a) A new definition of “Credit Insurance” shall be inserted in proper
alphabetical order in Section 1.01 of the Credit Agreement as follows:

“‘Credit Insurance’ means insurance covering payment of the applicable
Receivables, which (a) names the Administrative Agent as loss payee (through
provision of a loss payee endorsement), (b) provides prompt notice to the
Administrative Agent of termination, lapse or cancellation of such insurance or
any change in the approved coverage amount with respect to any account debtor
and (c) is otherwise reasonably acceptable to the Administrative Agent.”

(b) The definition of “Eligible Receivables” in Section 1.01 of the Credit
Agreement shall be amended by deleting clauses (b) and (i) in their entirety and
restating them as follows:

“(b) Receivables payable other than in Dollars, Euro, Japanese Yen or pounds
sterling or that are otherwise on terms other than those normal or customary in
the Borrower’s or the relevant Subsidiary’s business;”

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“(i) Receivables arising out of sales to account debtors outside the United
States or the United Kingdom, unless such Receivables are (x) fully backed by an
irrevocable letter of credit on terms, and issued by a financial institution,
acceptable to the Administrative Agent and such irrevocable letter of credit is
in the possession of the Administrative Agent or (y) covered by Credit
Insurance, and then only to the extent of the approved coverage amount for any
applicable account debtor, and in the case of subclauses (x) and (y), not to
exceed $7,000,000 in the aggregate; provided that for purposes of subclause (y),
the Administrative Agent shall put in place a reserve in an amount equal to the
deductible on the applicable Credit Insurance;”

(c) Exhibit I to the Credit Agreement (Form of Borrowing Base Certificate) is
hereby replaced in its entirety by Exhibit A attached hereto.

3. Representations and Warranties. The Borrower and the other Loan Parties each
represents and warrants to the Lenders that the representations and warranties
of the Loan Parties contained in Article V of the Credit Agreement or any other
Loan Document, or which are contained in any document furnished at any time
under or in connection herewith or therewith, are true and correct in all
material respects on the date hereof, except (a) to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, (b) the
representations and warranties contained in Sections 5.05(a) and (b) of the
Credit Agreement shall be deemed to refer to the most recent statements
furnished pursuant to Sections 6.01(a) and (b) of the Credit Agreement,
respectively; and (c) as if each reference therein to “this Agreement” or the
“Credit Agreement” or the like include reference to this First Amendment and the
Credit Agreement as amended hereby; provided that any representation and
warranty that is qualified as to “materiality,” “Material Adverse Effect” or
similar language shall be true and correct in all respects on such respective
dates.

4. Conditions Precedent. The amendments to the Credit Agreement set forth in
Section 2 hereof shall become effective, as of the date hereof, upon
satisfaction of the following conditions precedent:

(a) the Borrower shall have delivered to the Administrative Agent a counterpart
of this First Amendment executed by the Borrower;

(b) the Required Lenders and the Administrative Agent shall have indicated their
consent and agreement by executing this First Amendment; and

(c) no Event of Default shall have occurred and be continuing.

5. Effect on Loan Documents. The Credit Agreement (as amended hereby) and the
other Loan Documents shall be and remain in full force and effect in accordance
with their terms and hereby are ratified and confirmed in all respects. Except
as expressly set forth herein the execution, delivery, and performance of this
First Amendment shall not operate as a waiver or an amendment of any right,
power, or remedy of the Administrative Agent or any Lender under the Credit
Agreement or any other Loan Document, as in effect prior to the date hereof.
Each of the Loan Parties hereby ratifies and confirms in all respects all of its
obligations under the Credit Agreement (as amended hereby) and the other Loan
Documents to which it is a party.

 

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6. No Novation; Entire Agreement. This First Amendment evidences solely the
amendment of the terms and provisions of the obligations of the Borrower and the
other Loan Parties under the Loan Documents and is not a novation or discharge
thereof. There are no other understandings, express or implied, among the
Borrower, the other Loan Parties, the Administrative Agent and the Lenders
regarding the subject matter hereof or thereof.

7. Choice of Law. This First Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.

8. Counterparts; Facsimile Execution. This First Amendment may be executed in
any number of counterparts and by different parties and separate counterparts,
each of which when so executed and delivered shall be deemed an original, and
all of which, when taken together, shall constitute one and the same instrument.
Delivery of an executed counterpart of a signature page to this First Amendment
by facsimile shall be as effective as delivery of a manually executed
counterpart of this First Amendment.

9. Construction. This First Amendment is a Loan Document. This First Amendment
and the Credit Agreement shall be construed collectively and in the event that
any term, provision or condition of any of such documents is inconsistent with
or contradictory to any term, provision or condition of any other such document,
the terms, provisions and conditions of this First Amendment shall supersede and
control the terms, provisions and conditions of the Credit Agreement. Upon and
after the effectiveness of this First Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to “the Credit Agreement”, “thereunder”, “therein”, “thereof” or words
of like import referring to the Credit Agreement, shall mean and be a reference
to the Credit Agreement as modified and amended hereby.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
executed as of the date first above written.

 

BORROWER:

GSI GROUP CORPORATION

By:     Name:   Robert Buckley Title:   Chief Financial Officer

HOLDINGS:

GSI GROUP INC.

By:     Name:   Robert Buckley Title:   Chief Financial Officer

GUARANTORS:

EXCEL TECHNOLOGY, INC.

MICROE SYSTEMS CORP.

MES INTERNATIONAL INC.

By:     Name:   Robert Buckley Title:   Secretary

CAMBRIDGE TECHNOLOGY, INC.

CONTINUUM ELECTRO-OPTICS, INC.

CONTROL LASER CORPORATION (D/B/A BAUBLYS CONTROL LASER)

THE OPTICAL CORPORATION

PHOTO RESEARCH, INC.

QUANTRONIX CORPORATION

SYNRAD, INC.

By:     Name:   Robert Buckley Title:   Assistant Secretary

[First Amendment to Credit Agreement]

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GSI GROUP LIMITED By:     Name:   Robert Buckley Title:   Director

[First Amendment to Credit Agreement]

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BANK OF AMERICA, N.A., as

Administrative Agent

By:     Name:     Title:    

[First Amendment to Credit Agreement]

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BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line Lender By:    
Name:     Title:    

[First Amendment to Credit Agreement]

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SILICON VALLEY BANK By:     Name:     Title:    

[First Amendment to Credit Agreement]

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HSBC BANK USA N.A. By:     Name:     Title:    

[First Amendment to Credit Agreement]

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EXHIBIT A

FORM OF BORROWING BASE CERTIFICATE

Quarterly Period ended                     , 20        

Reference is made to that certain Credit Agreement, dated as of October 19, 2011
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined), among GSI GROUP CORPORATION, a Michigan corporation (the
“Borrower”), GSI Group Inc., a company continued and existing under the laws of
the Province of New Brunswick, Canada, the other Guarantors from time to time
party thereto, the Lenders from time to time party thereto, Bank of America,
N.A., as Administrative Agent, L/C Issuer and Swing Line Lender and Silicon
Valley Bank as Syndication Agent.

Pursuant to Section 6.02(i) of the Agreement, the undersigned, being the duly
elected, acting and qualified [President] [Chief Financial Officer] [Vice
President of Finance] of the Borrower, hereby certifies that attached hereto as
Annex 1 is a true and accurate calculation of the sum of the Loan Values of the
Eligible Collateral as at the end of the quarterly period ended
                    , 20         determined in accordance with the requirements
of the Agreement.

[Remainder of page intentionally left blank]

 

I-1

Form of Borrowing Base Certificate

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IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed as of this          day of                     , 20        .

 

GSI GROUP CORPORATION By:     Name:   Title:  

 

I-2

Form of Borrowing Base Certificate

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Annex 1

to the Borrowing Base Certificate

For the Quarter/Year ended                          (“Statement Date”)

 

I.       Loan Values

  

A.     Value of Eligible Inventory (from Schedule 1)

   $ ___________   

B.     Line I.A × 50%

   $ ___________   

C.     Value of Eligible Receivables (from Schedule 2), less any unapplied cash

   $ ___________   

D.     Line I.C × 85%

   $ ___________   

E.     Value of Eligible Cash

   $ ___________   

Loan Values (Line I.B + I.D + I.E)

   $ ___________   

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Schedule 1

to the Borrowing Base Certificate

For the Quarter/Year ended                          (“Statement Date”)

 

II.     Eligible Inventory: Value of the following:

  

A.     Inventory

   $ ___________   

1.      Inventory located on leaseholds as to which the lessor has not entered
into a Collateral Access Agreement

   $ ___________   

2.      Inventory that is obsolete, unusable or otherwise unavailable for sale

   $ ___________   

3.      Inventory consisting of promotional, marketing, packaging or shipping
materials and supplies

   $ ___________   

4.      Inventory that fails to meet all standards imposed by any Governmental
Authority having regulatory authority over such Inventory or its use or sale

   $ ___________   

5.      Inventory that is subject to any licensing, patent, royalty, trademark,
trade name or copyright agreement with any third party from which the Borrower
or any of its Subsidiaries has received notice of a dispute in respect of any
such agreement

   $ ___________   

6.      Inventory located outside the United States or the United Kingdom

   $ ___________   

7.      Inventory that is not in the possession of or under the sole control of
the Borrower or any of its Subsidiaries

   $ ___________   

8.      Inventory that represents intercompany profits

   $ ___________   

9.      Inventory with respect to which the representations and warranties set
forth in Section 5(e) of the Security Agreement applicable to Inventory are not
correct

   $ ___________   

10.    Inventory in respect of which the Security Agreement, after giving effect
to the related filings of financing statements that have then been made, if any,
does not or has ceased to create a valid and perfected first priority lien or
security interest in favor of the Administrative Agent, on behalf of the Secured
Parties, securing the Obligations

   $ ___________   

B.     Value of Eligible Inventory (Line II.A – sum of Line II.A.1 through Line
II.A.10)

   $ ___________   

 

I-4

Form of Borrowing Base Certificate

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Schedule 2

to the Borrowing Base Certificate

For the Quarter/Year ended                          (“Statement Date”)

 

III.    Eligible Receivables: Value of the following:

  

A.     Receivables

   $ ___________   

1.      Receivables that do not arise out of sales of goods or rendering of
services in the ordinary course of the Borrower’s or the relevant Subsidiary’s
business

   $ ___________   

2.      Receivables payable other than in Dollars, Euro, Japanese Yen or pounds
sterling or that are otherwise on terms other than those normal or customary in
the Borrower’s or the relevant Subsidiary’s business

   $ ___________   

3.      Receivables owing from any Person that is an Affiliate of the Borrower

   $ ___________   

4.      Receivables more than 90 days past original invoice date or more than 60
days past the date due (not to be reduced by any aged credit)

   $ ___________   

5.      Receivables owing from any Person from which an aggregate amount of more
than 50% of the Receivables owing therefrom is more than 90 days past original
invoice date or more than 60 days past the date due

   $ ___________   

6.      Receivables owing from any Person that (i) has disputed liability for
any Receivable owing from such Person or (ii) has otherwise asserted any claim,
demand or liability against the Borrower or any of its Subsidiaries, whether by
action, suit, counterclaim or otherwise; provided that for purposes of subclause
(i), such Receivables shall be excluded only to the extent of the amounts being
disputed by such Person at any date of determination

   $ ___________   

7.      Receivables owing from any Person that shall take or be the subject of
any action or proceeding of a type described in Section 8.01(f) of the Agreement

   $ ___________   

8.      Receivables (i) owing from any Person that is also a supplier to or
creditor of the Borrower or any of its Subsidiaries unless such Person has
waived any right of setoff in a manner acceptable to the Administrative Agent or
(ii) representing any manufacturer’s or supplier’s credits, discounts, incentive
plans or similar arrangements entitling the Borrower or any of its Subsidiaries
to discounts on future purchase therefrom; provided that for purposes of
subclause (ii), such Receivables shall be excluded only to the extent of the
amounts of such credits, discounts, incentive plans or similar arrangements at
any date of determination

   $ ___________   

 

I-5

Form of Borrowing Base Certificate

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9.      Receivables arising out of sales to account debtors outside the United
States or the United Kingdom

   $ ___________   

10.    Receivables arising out of sales on a bill-and-hold, guaranteed sale,
sale-or-return, sale on approval or consignment basis or subject to any right of
return, setoff or charge back

   $ ___________   

11.    Receivables owing from an account debtor that is an agency, department or
instrumentality of the United States or any state thereof unless the Borrower or
its relevant Subsidiary shall have satisfied the requirements of the Assignment
of Claims Act of 1940, and any similar state legislation and the Administrative
Agent is satisfied as to the absence of setoffs, counterclaims and other
defenses on the part of such account debtor

   $ ___________   

12.    Receivables with respect to which the representations and warranties set
forth in Section 5(e) of the Security Agreement applicable to Receivables are
not correct

   $ ___________   

13.    Receivables in respect of which the Security Agreement, after giving
effect to the related filings of financing statements that have then been made,
if any, does not or has ceased to create a valid and perfected first priority
lien or security interest in favor of the Administrative Agent, on behalf of the
Secured Parties, securing the Obligations

   $ ___________   

14.    An amount equal to the deductible on the Credit Insurance applicable to
the Receivables in Line III.A.15 below which the Administrative Agent has put in
place as a reserve

   $ ___________   

15.    Receivables arising out of sales to account debtors outside the United
States or the United Kingdom which are: (1) covered by Credit Insurance, to the
extent of the approved coverage amount for any applicable account debtor, or
(2) fully backed by an irrevocable letter of credit on terms, and issued by a
financial institution, acceptable to the Administrative Agent and such
irrevocable letter of credit is in the possession of the Administrative Agent;
provided that the sum of clauses (1) and (2) of this Line III.A.15 shall not
exceed $7,000,000 in the aggregate

   $ ___________   

B.     Value of Eligible Receivables (Line III.A – (sum of Line III.A.1 through
Line III.A.14) + Line III.A.15)

   $ ___________   

 

I-6

Form of Borrowing Base Certificate