Exhibit 10.1

Execution Copy

RESTRUCTURING PLAN SUPPORT AGREEMENT

This RESTRUCTURING PLAN SUPPORT AGREEMENT is made and entered into as of May 14,
2010 (this “Agreement”) by and among (i) GSI Group Inc. (“Holdings”), GSI Group
Corporation and MES International, Inc. (collectively, the “Company” or the
“Debtors”), (ii) the Equity Committee (as defined below), (iii) each of the
members of the Equity Committee listed on the signature pages hereto (the
“Equity Holders”) and (iv) the Noteholders (as defined below). The Company, the
Equity Committee and each Noteholder and any subsequent person or entity that
becomes a party hereto in accordance with the terms hereof are referred herein
as the “Parties” and individually as a “Party.” Capitalized terms used in this
Agreement but not defined herein shall have the meaning given to them in the in
the Fourth Modified Joint Chapter 11 Plan of Reorganization of MES
International, Inc., GSI Group Inc. and GSI Group Corporation dated May 14, 2010
in the form attached as Exhibit A hereto (as amended, supplemented or otherwise
modified as provided in this Agreement, the “Plan”).

W H E R E A S

A. On November 20, 2009 (the “Petition Date”), the Company commenced voluntary
reorganization cases (the ”Chapter 11 Cases”) under chapter 11 of title 11 of
the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”), in the
United States Bankruptcy Court for the District of Delaware (the “Bankruptcy
Court”).

B. On the Petition Date, the Debtors filed the initial disclosure statement. On
January 8, 2010, the Bankruptcy Court approved the disclosure statement, which
was subsequently modified on January 11, 2010.

C. On April 9, 2010, the Company filed its Third Modified Joint Chapter 11 Plan
of Reorganization (the “Third Modified Plan”).

D. The Equity Committee and the Noteholders support the proposal outlined in the
Term Sheet, dated May 7, 2010 (the “Restructuring”) pursuant to the terms of
this Agreement.

E. As a result of ongoing discussions and developments, the Company, in the
exercise of its business judgment and consistent with its fiduciary duties, the
Equity Committee (also consistent with any fiduciary duties it may have to
others) and the Noteholders, now enter into this Agreement, whereby the Parties
support the confirmation of the Plan (as defined above) and the Prior Agreement
is superseded in its entirety.

F. On November 19, 2009, the Company and the Noteholders entered into a Plan
Support Agreement, which was subsequently amended and restated on March 16, 2010
(the “Prior Agreement”), whereby the Company and the Noteholders agreed to
implement a restructuring of the Company pursuant to the terms and conditions
set forth in the Third Modified Plan.

G. The Company intends to effectuate a Rights Offering (as defined in the Plan)
to holders of Holdings Common Shares (as defined below) pursuant to the terms
and conditions set forth in the Plan and the Rights Offering Documents,
including, without limitation, the Rights Offering Procedures (as defined in the
Plan).

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H. The Noteholders have agreed to provide a backstop to the Rights Offering
pursuant to the terms and conditions set forth in the backstop commitment
agreement attached hereto as Exhibit B and made a part hereof (the “Backstop
Commitment Agreement”) and the Plan.

I. The Company intends to use its best efforts to obtain Bankruptcy Court
approval of the Plan in accordance with the Bankruptcy Code and on terms
consistent with this Agreement and the Equity Committee and each Noteholder
intends to cooperate as set forth herein.

J. This Agreement, the Plan, the Plan Documents and the two letter agreements
dated as of the date hereof by and among the Company, the Equity Committee and
the Noteholders (the “Side Letters”) set forth the agreement among the Parties
concerning their commitment, subject to the terms and conditions hereof and
thereof, to implement the Restructuring.

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, and for other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, each Party, intending to be legally bound, hereby
agrees as follows:

1. Definitions. The following terms shall have the following definitions:

“Advisory Board” shall consist of (i) a representative appointed by the Required
Noteholders, (ii) a representative appointed by the Equity Committee and
(iii) the Company’s Chief Restructuring Officer.

“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, “control” (including, with its
correlative meanings “controlled by” and “under common control with”) shall
mean, with respect to any Person, the possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise) of such Person.

“Addendum” has the meaning set forth in section 19 hereof.

“Agreement” has the meaning set forth in the preamble hereof.

“Alternate Transaction” means (a) a merger or other business combination or
similar transaction involving the Debtors, (b) any sale or other disposition of
all or substantially all the assets of the Debtors pursuant to Section 363 of
the Bankruptcy Code or pursuant to a plan of reorganization, not contemplated by
the Plan or permitted pursuant to this Agreement or (c) any plan of
reorganization, plan of liquidation, or financial restructuring of the Debtors
not supported by the Required Noteholders. For the avoidance of doubt, any
transaction expressly permitted under this Agreement or any transaction to which
the Required Noteholders consent shall not be an Alternate Transaction.

“Assumption Agreement” has the meaning set forth in section 19 hereof.

 

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“Backstop Commitment” shall have the meaning set forth in the Plan.

“Backstop Commitment Agreement” has the meaning set forth in recitals hereof.

“Ballot” means the ballot for voting on the First Modified Plan distributed with
the disclosure statement accompanying the First Modified Plan.

“Bankruptcy Code” has the meaning set forth in the recitals hereof.

“Bankruptcy Court” has the meaning set forth in the recitals hereof.

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure.

“Business Day” means any day other than Saturday, Sunday and any day that is a
legal holiday or a day on which banking institutions in New York, New York are
authorized by law or other governmental action to close.

“Canadian Counsel” has the meaning set forth in section 6(a) hereof.

“Chapter 11 Cases” has the meaning set forth in the recitals hereof.

“Claims” means all “claims” (as such term is defined in section 101 of the
Bankruptcy Code), including all Senior Note Claims.

“Collateral Perfection Counsel” has the meaning set forth in section 6(a)
hereof.

“Confirmation Date” has the meaning set forth in the Plan.

“Confirmation Order” has the meaning set forth in section 11 hereof.

“Company” has the meaning set forth in the preamble hereof.

“Debtors” has the meaning set forth in the preamble hereof.

“Equity Committee” means the statutory committee of equity security holders
appointed in the Chapter 11 Cases on December 22, 2009.

“Equity Holders” has the meaning set forth in the preamble hereof.

“First Modified Plan” mean the Company’s First Modified Plan of Reorganization
filed with the Bankruptcy Court in the Chapter 11 Cases.

“Holdings” has the meaning set forth in the preamble hereof.

“Holdings Common Shares” means common shares of Holdings, no par value.

“Holdings Equity Interest” has the meaning set forth in the Plan.

“Houlihan Lokey” has the meaning set forth in section 6(a) hereof.

 

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“Local Counsel” has the meaning set forth in section 6(a) hereof.

“Lock-Up Effective Date” has the meaning set forth in section 2 hereof.

“Milestones” shall mean the following milestones:

 

May 14, 2010    filing of (i) a motion or application seeking the entry of an
order of the Bankruptcy Court authorizing the assumption of this Agreement under
Sections 363 and 365 of the Bankruptcy Code and/or Rule 9019 of the Bankruptcy
Rules (the “Approval Order”) and (ii) the Plan. May 21, 2010    Entry of the
Approval Order May 28, 2010    Entry of Confirmation Order June 4, 2010   
Commencement of Rights Offering July 15, 2010    Subscription deadline for
Rights Offering July 23, 2010    Occurrence of Plan Effective Date

as such above dates may be waived or adjusted (for not more than 30 days in the
aggregate) only with the prior written consent of the Required Noteholders, such
consent not to be unreasonably withheld. Any request by the Company for
adjustment of the Milestone shall be accompanied by a certificate of the chief
restructuring officer of the Company attesting that the Company is not pursuing
an Alternate Transaction.

“New Indenture” has the meaning set forth in the Plan.

“NH Legal Counsel” has the meaning set forth in section 6(a) hereof.

“Noteholders” means any Senior Noteholder that executed this Agreement or
delivers an executed Addendum to the Company in accordance with this Agreement.

“Noteholder Representative” has the meaning set forth in section 6(b) hereof.

“Parties” has the meaning set forth in the preamble hereof.

“Person” means an individual, a partnership, a joint venture, a limited
liability company, a corporation, a trust, an unincorporated organization, a
group or any legal entity or association.

“Petition Date” has the meaning set forth in the recitals hereof.

“Plan” has the meaning set forth in the preamble hereof.

“Plan Documents” means (i) the Plan and the exhibits thereto, (ii) the Backstop
Commitment Agreement, (iii) the Rights Offering Documents, and (iv) the
Confirmation Order, in each case, in form and substance reasonably acceptable to
the Required Noteholders and, except in the case of the Backstop Commitment
Agreement, the Security Agreement and the New Indenture and related agreements,
documents, exhibits, annexes and schedules (provided that the Security Agreement
and the New Indenture shall be substantially in the form filed with

 

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the Bankruptcy Court on April 9, 2010 as revised to reflect the principal amount
of the New Senior Secured Notes as contemplated by the Plan and elimination of
provisions related to the issuance of Preferred Stock as such term is defined in
the Indenture filed with the Bankruptcy Court on April 9, 2010) the Equity
Committee.

“Plan Effective Date” has the meaning set forth in the Plan.

“Plan Modification Amendment” means any amendment, modification or supplement to
the Plan or Plan Documents that (i) affects, or has any impact upon, the
treatment of Senior Note Claims or Holdings Equity Interests or rights of any
holder of Senior Note Claims or Holdings Equity Interests under the Plan;
(ii) affects, or has an impact upon, the economic interests of the holders of
Senior Note Claims or Holdings Equity Interests; or (iii) has any adverse
overall economic effect (direct or consequential) on the Company and its direct
and indirect subsidiaries.

“Post-Effective Date Transaction” means any of the following, which shall occur
only after the Plan Effective Date: (a) a merger or other business combination
or similar transaction involving the Company or any of its affiliates, (b) any
sale or other disposition of all or substantially all the assets of the Company;
or (c) financial restructuring of the Company.

“Prior Agreement” has the meaning set forth in the recitals hereof.

“Registration Rights Agreement” has the meaning set forth in the Plan.

“Required Noteholders” means, as of any date of determination, Senior
Noteholders holding in the aggregate more than sixty-six and two-thirds percent
(66 2/3%) of the Senior Note Claims (but not less than $153,334,000) and
represent more than one-half (1/2) of the Senior Noteholders holding Senior
Notes.

“Restructuring” has the meaning set forth in the recitals hereof.

“Retainers” has the meaning set forth in Section 6(a) hereof.

“Rights Offering” has the meaning set forth in the Plan.

“Rights Offering Documents” means certain documents relating to the Rights
Offering, the subscription forms related to the Rights Offering, instructions to
the subscription forms and the Rights Offering Disclosure.

“Rights Offering Disclosure” means the supplemental disclosure to be provided in
connection with the Rights Offering.

“Senior Notes” means the 11% Senior Notes due 2013 in the aggregate principal
amount of $210,000,000 issued pursuant to the Indenture.

“Senior Note Claims” means all claims arising under or relating to the Senior
Notes and all agreements and instruments relating thereto that remain unpaid and
outstanding as of the Plan Effective Date, including, without limitation, the
aggregate principal amount, plus accrued and unpaid interest thereon, plus
accrued and unpaid fees, costs and expenses.

 

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“Senior Noteholders” means the holders of the Senior Note Claims.

“Side Letters” has the meaning set forth in the recitals hereof.

“Termination Date” has the meaning set forth in section 7 hereof.

“Termination Event” has the meaning set forth in section 7 hereof.

“Third Modified Plan” has the meaning set forth in the recitals hereof.

“Transfer” has the meaning set forth in section 19 hereof.

“Transferee” has the meaning set forth in section 19 hereof

2. Lock-Up Effective Date. This Agreement shall be effective (the “Lock-Up
Effective Date”) and bind the Debtors, the Equity Committee and each Noteholder
upon the last to occur of each of the following: (a) the Company’s execution of
this Agreement, (b) the Equity Committee’s execution of this Agreement, (c) each
Equity Holder’s execution of this Agreement and (d) execution of this Agreement
by the Required Noteholders.

3. Plan. The Plan is expressly incorporated herein and is made part of this
Agreement. The Plan may be amended, modified or supplemented by the Company, and
any term or condition of the Plan may be waived by the Company, in any manner
not materially inconsistent with this Agreement; provided, however, that any
Plan Modification Amendment, subject to the provisions of the Side Letters shall
require prior written consent of (i) a majority of the members of the Equity
Committee and (ii) the Required Noteholders, which consent may not be
unreasonably withheld or delayed.

4. Commitment of the Noteholders, the Equity Holders and the Equity Committee.
Prior to the applicable Termination Event (as defined below) and subject to the
occurrence of the Lock-Up Effective Date and the terms and conditions hereof:

 

  (a) Each Equity Holder agrees to timely file a notice with the Bankruptcy
Court indicating that those Ballots submitted with respect to the First Modified
Plan on account of its Holdings Equity Interest (now owned or hereafter
acquired) shall be changed to be votes accepting the Plan and such Equity Holder
shall not thereafter withdraw, change or revoke such vote unless the Termination
Date has occurred;

 

  (b) The Equity Committee and each Equity Holder agrees to use reasonable best
efforts to cause holders of Holdings Equity Interest who voted to reject the
First Modified Plan to timely file a notice with the Bankruptcy Court indicating
that those Ballots submitted with respect to the First Modified Plan on account
of their Holdings Equity Interest shall be changed to be votes to accept the
Plan;

 

  (c) Each Noteholder agrees not to withdraw, change or revoke its vote (or
cause its vote to be withdrawn, changed or revoked) with respect to the Plan;

 

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  (d) The Equity Committee shall upon filing of the Plan with the Bankruptcy
Court issue a press release indicating its support of the Plan;

 

  (e) Solely to the extent that the Bankruptcy Court determines that it is
necessary to solicit votes on the Plan, each Equity Holder and each Noteholder
agrees to timely vote or cause to be voted all such holder’s Holdings Common
Shares and Senior Note Claims, as applicable, in favor of the Plan in accordance
with any applicable procedures set forth in a disclosure statement and any
accompanying solicitation materials, and timely return a duly-executed ballot in
connection therewith;

 

  (f) If requested by the Debtors, each Noteholder, the Equity Committee and
each Equity Holder agrees to support the Company’s position that no further
solicitation of holders of claims is necessary to confirm the Plan or effectuate
the Restructuring;

 

  (g) Each Noteholder, the Equity Committee and each Equity Holder agrees not to
object to confirmation of the Plan or object to, or otherwise commence any
proceeding to oppose the Plan, or support an alternative restructuring;

 

  (h) Each Noteholder agrees not to amend or modify its Addendum;

 

  (i) Each Noteholder, the Equity Committee and each Equity Holder agrees,
except as otherwise permitted herein, not take any other action, including,
without limitation, initiating or joining any legal proceeding, that is
inconsistent with, or that would materially prevent, hinder or delay the
consummation of, the Restructuring in accordance with the Plan Documents; and

 

  (j) Subject to the provision of section 5(a) below, the Noteholders, the
Equity Committee and each Equity Holder agrees to not directly or indirectly
seek, solicit, support, consent to, or participate in the negotiation or
formulation of any Alternate Transaction, plan of reorganization, proposal,
offer, dissolution, winding up, liquidation, reorganization, merger or
restructuring for the Company other than the Plan; provided, however, that this
provision shall not restrict the Noteholders, the Equity Committee and each
Equity Holder from responding to inquiries received from third parties relating
to a potential Alternate Transaction.

Notwithstanding the foregoing, nothing in this Agreement shall be construed to
prohibit any Party from appearing as a party-in-interest in any matter to be
adjudicated in the Chapter 11 Cases so long as such appearance and the positions
advocated in connection therewith are not materially inconsistent with this
Agreement, the Plan and the Restructuring and are not for the purpose of
materially hindering, delaying or preventing the consummation of the
Restructuring.

 

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5. Commitment of the Company.

(a) Restructuring. Subject to its fiduciary duties as debtor in possession based
upon advice of counsel, the Company agrees to use its best efforts to
(i) support and complete the Restructuring in accordance with the Plan Documents
and all transactions contemplated by the Plan Documents, (ii) take any and all
necessary and appropriate actions in furtherance of the Restructuring in
accordance with the Plan Documents, (iii) complete the Restructuring in
accordance with the Plan Documents and all transactions contemplated under the
Plan Documents within the Milestones, (iv) obtain any and all regulatory and/or
third-party approvals required to consummate the Restructuring in accordance
with the Plan Documents, and (v) not directly or indirectly seek, solicit,
support, consent to, or participate in the negotiation or formulation of (x) any
plan of reorganization, proposal, offer, dissolution, winding up, liquidation,
reorganization, merger or restructuring for the Company other than the Plan,
(y) any disposition outside the ordinary course of business or inconsistent with
the Plan Documents of all, substantially all, or a material portion of the
assets of the Company, or (z) any other action that is inconsistent with, or
that would delay or obstruct the proposed confirmation or consummation of the
Plan. The limitations set forth in Section 5(a) above shall not preclude the
Company from considering a Post-Effective Date Transaction provided that (i) the
Company shall not execute any binding agreements or commitments regarding a
Post-Effective Date Transaction prior to the Plan Effective Date and (ii) any
discussions regarding a Post-Effective Date Transaction shall be conducted by
the Company in consultation with the Advisory Board.

(b) Alternate Transaction. If the Company, in accordance with its fiduciary duty
consummates an Alternate Transaction, then the Company shall upon consummation
of such Alternate Transaction (i) pay each Senior Noteholder its pro rata
portion of a cash fee equal to $4.2 million, which shall not be subject to
disgorgement and (ii) to the extent the GSI UK Note Claim is impaired under the
Plan, pay GSI UK a cash fee equal to $0.4 million which shall not be subject to
disgorgement. No Alternative Transaction shall be consummated after the
Confirmation Date and prior to the Plan Effective Date.

6. Fees and Retainers.

(a) Fees and Retainers. The Company agrees to pay the reasonable fees, costs and
expenses of (i) Schulte Roth & Zabel LLP (“Schulte”), legal counsel for the
Noteholders, (ii) Delaware counsel (“Local Counsel”), Canadian legal counsel
(“Canadian Counsel”) and counsel in the United Kingdom, Germany and Japan
(“Collateral Perfection Counsel”) to assist with perfection of stock pledges
contemplated under the Plan for the Noteholders; (iii) Houlihan Lokey Howard &
Zukin Capital, Inc. (“Houlihan Lokey”), financial advisor for the Noteholders
and (iv) if not paid on or before the date hereof, up to an additional $50,000
for Duff & Phelps in connection with solvency opinions, all of which shall be
payable regardless of whether the Restructuring is consummated. In furtherance
of the foregoing, the Company has provided by wire transfer (A) to Schulte,
Local Counsel, Canadian Counsel and Houlihan Lokey all invoiced fees and
expenses incurred through the Petition Date; (B) the following retainers
(“Retainers”) to: (i) Schulte the sum of $525,000 as a retainer (but not as a
cap) for invoiced fees and expenses incurred after the Petition Date, with any
such amount in excess of the invoiced fees and expenses being returned to the
Company upon the earlier to occur of the Termination Date and the Plan Effective
Date; (ii) Local Counsel, the sum of $75,000 as a retainer (but not as a cap)
for

 

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invoiced fees and expenses incurred after the Petition Date, with any such
amount in excess of the invoiced fees and expenses being returned to the Company
upon the earlier to occur of the Termination Date and the Plan Effective Date;
and (iii) Houlihan Lokey the sum of $400,000 as a retainer (but not as a cap)
for invoiced fees and expenses incurred after the Petition Date, with any such
amount in excess of the invoiced fees and expenses being returned to the Company
upon the earlier to occur of the Termination Date and the Plan Effective Date.
After the full application of Retainers, the Debtors shall pay approved invoices
of Schulte, Local Counsel, Canadian and Collateral Perfection Counsel
(collectively, the “NH Legal Counsel”) and Houlihan Lokey for professional fees
and expenses (net of any good faith disputes which shall be resolved pursuant to
section 6(b) herein) no later than 30 days after receipt of such invoice.

(b) Fee Dispute Resolutions. With respect to fees incurred after the Petition
Date, NH Legal Counsel shall deliver to the Company and a representative
appointed by the Noteholders (the “Noteholder Representative,” who initially
shall be Thomas Secor) their respective invoices for review. Fourteen (14) days
from the date on which the invoice has been provided to the Company and the
Noteholder Representative, each of the NH Legal Counsel may draw on their
respective Retainers to the extent of any portion of the invoiced fees that the
Company has not disputed in writing to the Noteholder Representative. If any
portion of the invoiced fees has been so disputed, the Company and the
Noteholder Representative (with the support of the Noteholders) agree to
cooperate for 20 days to reach an amicable solution to such dispute. Thereafter,
any unresolved dispute shall be settled by arbitration administered by the
American Arbitration Association in accordance with its Commercial Arbitration
Rules (with respect to which the parties shall be deemed to be the Noteholders
and the Company), and judgment on the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. The arbitrators shall award to
the prevailing party, if any, as determined by the arbitrators, all of its costs
and fees. “Costs and fees” mean all reasonable pre-award expenses of the
arbitration, including the arbitrators’ fees, administrative fees, travel
expenses, out-of-pocket expenses such as copying and telephone, court costs,
witness fees, and attorneys’ fees.

7. Termination. At the option of the Party or Parties specified below (unless
such Party seeking to terminate either (i) caused the Termination Event (as
defined below) or (ii) is in material breach of its obligations under this
Agreement), this Agreement and the obligations of the Parties hereunder may be
terminated upon the occurrence of any of the following events (each a
“Termination Event”):

 

  (a) At the option of the Required Noteholders, if the Company is in material
breach of any of its obligations under this Agreement, including any of the
Company’s commitments set forth in section 5(a)(i), (ii), (iv), or (v) above, or
any other agreement governing the Restructuring pursuant to the Plan to which
the Company and any Required Noteholders are parties, and any such breach by the
Company is not cured by the later of (i) five (5) Business Days after receipt of
written notice from the Required Noteholders or (ii) the expiration of the cure
period under the applicable agreement;

 

  (b)

At the option of the Required Noteholders, if the Company files any motion or
pleading with the Bankruptcy Court that is not consistent in any material
respect with this Agreement or any Plan Document, and such motion or pleading
has not

 

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  been withdrawn within five (5) Business Days of the Company receiving notice
from the Required Noteholders that such motion or pleading is inconsistent with
this Agreement or any Plan Document, provided that such notice must be issued
within five (5) Business Days after service of such motion or pleading and, so
long as the first scheduled hearing on such motion or pleading is scheduled upon
not less than twenty (21) days notice, no later than ten (10) days prior to the
scheduled hearing on such motion or pleading;

 

  (c) At the option of the Company or the Required Noteholders, if the
Bankruptcy Court (other than at the request of the Party electing such
termination) grants relief that is materially inconsistent with this Agreement
or the Plan;

 

  (d) At the option of the Company, the Equity Committee, the Equity Holders and
the Noteholders, if all parties (the Company, the Equity Committee, the Equity
Holders and the Noteholders) agree in writing to terminate this Agreement;

 

  (e) At the option of the Required Noteholders, if, after the full application
of any Retainers, the Company shall fail to pay, in accordance with section 6,
approved invoices of NH Legal Counsel or Houlihan Lokey for professional fees
and expenses (net of any good faith disputes which shall be resolved pursuant to
section 6(b) herein), provided that any breach existing as of the date hereof
shall be subject to the Company’s right to cure by no later than 5:00 p.m.
(Eastern Time) on May 21, 2010;

 

  (f) At the option of the Required Noteholders, if the Company 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;

 

  (g) At the option of the Required Noteholders, if (1) a trustee or an examiner
with expanded powers is appointed in any of the Chapter 11 Cases, or (2) any of
the Chapter 11 Cases is dismissed or converted to a case under chapter 7 of the
Bankruptcy Code;

 

  (h) At the option of the Required Noteholders, if 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
other than as set forth herein or in the Plan or disgorging any amounts paid
prior to the Petition Date from any holder of the Senior Note Claim;

 

  (i) At the option of the Company or the Required Noteholders, if the Equity
Committee, any Equity Holder or any Noteholder takes any action that would be a
material breach of this Agreement or the Backstop Commitment Agreement if such
breach is not cured within five (5) Business Days after receipt of written
notice from the Company;

 

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  (j) At the option of the Company or the Required Noteholders, if any court of
competent jurisdiction or other competent governmental or regulatory authority
shall have issued a final and non-appealable order making illegal or otherwise
preventing, prohibiting or materially restricting the Restructuring in a way
that cannot reasonably be remedied;

 

  (k) At the option of the Company, if it elects to file a plan of
reorganization which constitutes an Alternate Transaction with the Bankruptcy
Court or consummates any other Alternate Transaction in accordance with the
exercise of its fiduciary out rights and indefeasibly pays in full in cash the
fee described in section 5(b);

 

  (l) At the option of the Required Noteholders, if the Company withdraws the
Plan or files, proposes or otherwise supports any chapter 11 plan other than the
Plan;

 

  (m) At the option of the Required Noteholders, if the Company fails to meet
any of the Milestones;

 

  (n) Automatically, if the Backstop Commitment is terminated;

 

  (o) At the option of the Equity Committee, if the Required Noteholders have
failed to vote to accept the Plan;

 

  (p) At the option of the Required Noteholders or the Equity Committee, as
provided in the Side Letters; or

 

  (q) At the option of the Required Noteholder, if any prior breach of the
Company’s payment obligations under the Prior Agreement with respect to payment
of NH Legal Counsel shall not be cured by 5:00 p.m. (Eastern Time) on May 21,
2010.

The date on which this Agreement is terminated in accordance with the foregoing
provisions shall be referred to as the “Termination Date.” The act of
termination by any Party pursuant to this Agreement shall not be a violation of
the automatic stay of section 362 of the Bankruptcy Code; provided, however,
that nothing herein shall prejudice any Party’s rights to argue that the
termination was not proper under the terms of this Agreement. Sections 6, 9, and
29 survive the termination of this Agreement.

The cure periods in section 7(a), 7(b) and 7(i) shall be reduced from five
(5) Business Days to two (2) Business Days if the applicable Termination Event
occurs after entry of the Confirmation Order and prior to the Subscription
Expiration Date (as defined in the Plan).

8. Access and Disclosure.

(a) Access. The Company shall afford the Noteholders and their respective
attorneys, consultants, accountants and other authorized representatives full
access, upon reasonable notice during normal business hours, and at other
reasonable times, to all properties, books, contracts, commitments, records,
management personnel, lenders and advisors of the Company; provided, however,
that if in the reasonable judgment of counsel to the Company such access would
void the right of the Company to maintain its attorney-client privilege,
attorney work product or any other applicable privilege as to non-disclosure of
information, then denial of such access shall not constitute a Termination
Event.

 

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(b) Rights Offering Disclosure The Company shall provide the Equity Committee
and the Noteholders with copies of the Rights Offering Disclosure within a
reasonable time prior to distributing or filing such Rights Offering Disclosure
in connection with the Rights Offering in order to allow for the review and
comment on such disclosure. The Rights Offering Disclosure shall be in form and
substance reasonably acceptable to (i) a majority of the members of the Equity
Committee and (ii) the Required Noteholders. For the avoidance of doubt, any
objection to any such Rights Offering Disclosure pursuant to the immediately
preceding sentence on the grounds that such information is insufficient or
unlikely to allow for the Bankruptcy Court to issue a finding that such
disclosure is consistent with Section 1145 or Section 1125(e) of the Code shall
be deemed to be reasonable.

9. Disclosure of Material Information. On or before 8:30 a.m., New York City
time on earlier of (i) the 4th Business Day following the Termination Date, or
(ii) the Business Day prior to the Rights Offering Commencement Date (as defined
in the Plan), the Company shall disclose publicly (including by filing a Current
Report on Form 8-K, if the Company is permitted to make such filing), if the
Company has not previously so publicly disclosed such information, a summary of
information, which constitutes material nonpublic information provided by the
Company, any of its Subsidiaries or any of their respective officers or
directors, or, to the Company’s knowledge, any of their respective employees or
agents, to the Equity Committee and any of the Noteholders as is necessary (as
reasonably determined by the Company) to permit any Noteholder and any Equity
Holder who are in possession of such information to offer and sell (without
contravening applicable law) any securities issued under the Plan, which summary
with respect to the Company’s business plan as prepared by the Company’s
financial advisor CRG Partners shall include a summary of the Company’s
consolidated projections for all of the Company’s business units and not a
summary of the information on a business unit basis. Immediately after the
filing of such current report on Form 8-K, the Company hereby releases (a) the
Noteholders from any and all obligations, if any, imposed on the Noteholders
pursuant to Section 1(b) and the proviso in the second to last sentence of
Section 5 of those certain confidentiality agreements entered into between the
Company and such Noteholders and (b) the Equity Holders from any and all
obligations, if any, imposed on such holders pursuant to that certain
confidentiality agreement entered into between the Company and the Equity
Committee. The Company shall not, and shall cause each of its Subsidiaries and
each of their respective officers, directors, employees and agents, not to,
provide any Noteholders or the Equity Committee with any material, nonpublic
information regarding the Company or any of its Subsidiaries from and after the
public disclosure pursuant to this section 9 without the express written consent
of such Noteholder or Equity Committee, as applicable.

10. Entire Agreement. This Agreement, including the exhibits, schedules and
annexes hereto, including the Plan, the Plan Documents and the Side Letters,
constitutes the entire agreement of the Parties with respect to the subject
matter of this Agreement, and supersedes all other prior negotiations,
agreements and understandings, whether written or oral, among the Parties with
respect to the subject matter of this Agreement; provided, however, that except
as provided otherwise in section 9 above, any confidentiality agreement between
the Equity Committee, any Noteholder and any other Party shall survive this
Agreement and shall continue

 

- 12 -

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to be in full force and effect irrespective of the terms of this Agreement. With
respect to the Company and the Noteholders, this Agreement shall supersede and
replace the Prior Agreement and the Prior Agreement shall be of no further force
and effect; provided, however, nothing contained herein shall, prior to the
entry of the Approval Order, (i) release the Company from its obligation to pay
NH Legal Counsel and Houlihan Lokey as set forth in section 7 of the Prior
Agreement or (ii) affect the acknowledgement and agreement contained in section
32 of the Prior Agreement.

11. Confidentiality; Publicity; Side Letter. Unless required by applicable law
or regulation or requested by any regulatory authority, no Party shall disclose
the amount of a Noteholder’s holdings of Claims without the prior written
consent of such Noteholder; and if such disclosure is so required by law or
regulation or requested by a regulatory authority, the Party required to
disclose shall, to the extent permitted by law or advised by counsel, use
commercially reasonable efforts to afford each Noteholder a reasonable
opportunity to review and comment upon any such disclosure prior to the making
of such disclosure; provided, however, that each Noteholder acknowledges and
agrees that the Company may disclose such information in connection with
tabulating votes with respect to the Plan and obtaining entry of an order
confirming the Plan (the “Confirmation Order”). The foregoing shall not prohibit
the Company from disclosing the existence of this Agreement or the approximate
aggregate holdings of claims by the Noteholders in the aggregate. The Side
Letters contains highly confidential information regarding a provisional
agreement of the Noteholders and the Equity Committee to permit the Company to
modify the Plan in certain respects regarding particular claims. The Parties
believe that public disclosure of the Side Letters may impair the Company’s
ability to confirm the Plan. Upon the request of any party, copies of the Side
Letters shall be provided to the Bankruptcy Court (in camera) and to the Office
of the United States Trustee (in confidence).

12. No Waiver. Nothing herein shall be construed as a waiver by any Party of any
or all of such Party’s rights, and the Parties expressly reserve any and all of
their respective rights. Pursuant to Federal Rule of Evidence 408, state law
equivalents and any other applicable rules of evidence, this Agreement and all
negotiations relating hereto shall not be admissible into evidence in any
proceeding other than a proceeding to enforce its terms.

13. Reservation of Rights. This Agreement and the Restructuring are part of a
proposed compromise and settlement by and among the Company, the Equity
Committee and the Noteholders. Except as expressly provided in this Agreement,
nothing herein is intended to, or does, in any manner waive, limit, impair or
restrict the ability of each of the Parties hereto to protect and preserve their
rights, remedies and interests. Except as expressly set forth herein, nothing
herein shall be deemed an admission of any kind. If the transactions
contemplated herein are not consummated, or if this Agreement is terminated for
any reason, the Parties hereto fully reserve any and all of their rights,
pursuant to Federal Rule of Evidence 408 and any applicable state rules.

14. Representations and Warranties of all Parties. Each Party (to the extent
applicable) represents to each other Party that: (a) with respect to each Party
that (i) is an individual, such Party has all requisite authority to enter into
this Agreement and to carry out the transactions contemplated by, and perform
its respective obligation under, this Agreement and (ii) is not an individual
such Party is, as of the date of this Agreement, duly organized, validly
existing, and in

 

- 13 -

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good standing under the laws of the jurisdiction of its organization, and has
all requisite corporate, partnership or limited liability company power and
authority, subject to the Debtors’ obtaining approval by the Bankruptcy Court,
to enter into this Agreement and to carry out the transactions contemplated by,
and perform its respective obligations under, this Agreement; (b) with respect
to each Party that is not an individual, the execution and delivery of this
Agreement and the performance of such Party’s obligations hereunder have been
duly authorized by all necessary corporate or other action on its part; (c) the
execution, delivery and performance of this Agreement by such Party do not and
shall not (i) violate any provision of law, rule or regulation applicable to it
or, with respect to each Party that is not an individual, any of its
subsidiaries or its certificate of incorporation, bylaws or other organizational
documents or those of any of its subsidiaries or (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any material contractual obligation to which it or, with respect to each
Party any of its subsidiaries is a party or under its certificate of
incorporation, by-laws or other organizational documents; and (d) such Party
(i) is a sophisticated Person with respect to the matters set forth in this
Agreement; (ii) has adequate information to make an informed decision to enter
into this Agreement; and (iii) has independently and without reliance upon any
other Party, and based on such information as such Party has deemed appropriate,
made its own analysis and decision to enter into this Agreement.

15. Counterparts. This Agreement may be executed in one or more counterparts,
each of which, when so executed, shall constitute the same instrument and the
counterparts may be delivered by facsimile transmission or by electronic mail in
portable document format (.pdf).

16. Amendments. Except as otherwise provided herein, this Agreement may not be
modified, amended or supplemented without prior written consent of the Company,
the Equity Committee and the Required Noteholders.

17. Headings. The headings of the sections, paragraphs and subsections of this
Agreement are inserted for convenience only and shall not affect the
interpretation hereof.

18. Relationship Among Parties. Notwithstanding anything herein to the contrary,
the duties and obligations of the Parties under this Agreement shall be several,
not joint. No Equity Holder or Noteholder shall have any responsibility for any
trading by any other entity by virtue of this Agreement. No prior history,
pattern or practice of sharing confidences among or between the Equity Holder
and the Noteholders shall in any way affect or negate this understanding and
agreement.

19. Acquisitions and Dispositions of Holdings Common Shares and Senior Notes
Claims. It is understood and agreed that nothing in this Agreement shall
restrict the ability of any of the Equity Holders and any Noteholder to trade in
the debt or equity securities of the Company and its Subsidiaries without the
consent of the Company, the Equity Committee or any Noteholder, subject to
applicable securities laws and such other conditions and limitations on the
Equity Holders by virtue of such Parties being members of the Equity Committee;
provided, however, that (i) if prior to the entry of the Confirmation Order, an
Equity Holder or Noteholder sells, contracts to sell, gives, assigns,
hypothecates, pledges, encumbers, grants a security interest in, offers, sells
any option or contract to purchase, purchases any option or contract to sell,
grants any option, right or warrant to purchase, or otherwise transfers or
disposes of all or any portion

 

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of any Holdings Common Shares or Senior Note Claims held by such Equity Holder
or Noteholder (any of the foregoing, a “Transfer”) to any Person (each such
Person, a “Transferee”), the Transferee must, as a condition precedent to such
Transfer execute a addendum substantially in the form set forth in Schedule 1
(the “Addendum”) and an assumption in substantially the form set forth in
Schedule 2 hereto (the “Assumption Agreement”) and deliver the same to the
Company and (ii) a Noteholder, who is a party to the Backstop Commitment
Agreement, may only Transfer Senior Notes Claims if (A) following such Transfer,
the transferring Noteholder holds a sufficient amount of Senior Note Claims so
as to be able to meet its obligations under the Backstop Commitment Agreement or
(B) the Transferee, as a condition precedent to such Transfer, becomes a party
to the Backstop Commitment Agreement and assumes the obligations of the
Transferee under the Backstop Commitment Agreement with respect to the Senior
Note Claims to be so transferred. Any Transfer that is made in violation of the
immediately preceding sentence shall be null and void ab initio, and the Company
and each Equity Holder or Noteholder, as applicable, shall have the right to
enforce the voiding of such transfer. Any additional Holdings Common Shares or
Senior Note Claims acquired by an Noteholder or Equity Holder shall
automatically be deemed to be subject to the terms of this Agreement.

20. Independent Nature of Each Noteholder’s Obligations and Rights. The
obligations of each Noteholder hereunder are several and not joint with the
obligations of any other Noteholder hereunder, and no Noteholder shall be
responsible in any way for the performance of the obligations of any other
Noteholder hereunder. Nothing contained herein or in any other agreement or
document, and no action taken by any Noteholder pursuant hereto or thereto,
shall be deemed to constitute the Noteholders as a group, a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Noteholders are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by this
Agreement. Each Noteholder shall be entitled to protect and enforce its rights.
including, without limitation, the rights arising out of this Agreement, and it
shall not be necessary for any other Noteholder to be joined as an additional
Party in any proceeding for such purpose.

21. Independent Nature of Each Equity Holder’s Obligations and Rights. The
obligations of each Equity Holder hereunder are several and not joint with the
obligations of any other Equity Holder hereunder, and no Equity Holder shall be
responsible in any way for the performance of the obligations of any other
Equity Holder hereunder. Nothing contained herein or in any other agreement or
document, and no action taken by any Equity Holder pursuant hereto or thereto,
shall be deemed to constitute the Equity Holders as a group, a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Equity Holders are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated by this
Agreement. Each Equity Holder shall be entitled to protect and enforce its
rights including, without limitation, the rights arising out of this Agreement,
and it shall not be necessary for any other Equity Holder to be joined as an
additional Party in any proceeding for such purpose.

22. Approvals. Notwithstanding anything to the contrary herein, unless notified
in writing to the contrary, for purposes of seeking approval of the Plan
Documents or a Plan Modification, if any, the Company may rely on the written
approval (including in portable document format (.pdf) or email) of Schulte
Roth & Zabel LLP, counsel for the Noteholders, for approvals required by the
Noteholders, and of Jones Day, counsel for the Equity Committee, for approvals
required by the Equity Committee; provided, however, that any such approval from
Jones Day must be delivered by any of Dan Winikka, Chris Hewitt or Carl Black

 

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23. Specific Performance. It is understood and agreed by the Parties that money
damages would be an insufficient remedy for any breach of this Agreement by any
Party and each non-breaching Party shall be entitled to specific performance
(including with respect to Section 6 of this Agreement) and injunctive or other
equitable relief as a remedy of any such breach, including, without limitation,
an order of the Bankruptcy Court or other court of competent jurisdiction
requiring any Party to comply promptly with any of its obligations hereunder.

24. Governing Law & Disputes. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to such
state’s choice of law provisions which would require the application of the law
of any other jurisdiction. By its execution and delivery of this Agreement, and
subject to section 6(b) which governs disputes relating to fees and retainers
payable pursuant to section 6(a) of this Agreement, each of the Parties
irrevocably and unconditionally agrees for itself that the Bankruptcy Court
shall have exclusive jurisdiction of all matters arising out of or in connection
with this Agreement.

25. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

26. Severability. If any provision of this Agreement is found by any court of
competent jurisdiction to be invalid or unenforceable, the provision that would
otherwise be prohibited, invalid or unenforceable shall be deemed amended to
apply to the fullest extent that it would be valid and enforceable, and the
invalidity or unenforceability of such provision shall not affect the validity
of the remaining provisions of this Agreement so long as this Agreement as so
modified continues to express, without material change, the original intentions
of the Parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the Parties or the practical realization of the benefits that would otherwise be
conferred upon the Parties. The Parties will endeavor in good faith negotiations
to replace the prohibited, invalid or unenforceable provision(s) with a valid
provision(s), the effect of which comes as close as possible to that of the
prohibited, invalid or unenforceable provision(s).

27. Notices. All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally,
by internationally recognized overnight courier service, by facsimile
transmission, or by registered or certified mail (postage prepaid, return
receipt requested) to the Parties at the following addresses or facsimile
numbers:

If to the Company:

GSI Group Inc.

125 Middlesex Turnpike

Bedford, Massachusetts 01730

Attention: Chief Restructuring Officer

Telephone:

Fax Number: 781-266-5115

 

- 16 -

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With a copies to (which shall not constitute notice):

Brown Rudnick LLP

One Financial Center

Boston, Massachusetts 02111

Attn: William R. Baldiga, Esq.

Telephone: (617) 856-8586

Facsimile: (617) 856-8201

E-Mail: wbaldiga@brownrudnick.com

FTI Consulting, Inc.

3 Times Square

9th Floor

New York, New York 10036

Attn: Michael Katzenstein

Telephone: (212) 247-1010

Facsimile: (212) 841-9350

E-mail: mike.katzenstein@fticonsulting.com

If to a Noteholder (or a Transferee thereof):

To the address or facsimile number set forth below such Noteholder’s signature

(or as directed by such Transferee).

With a copy to (which shall not constitute notice):

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attn: David M. Hillman, Esq.

Telephone: (212) 756-2000

Facsimile: (212) 593-5955

E-mail: david.hillman@srz.com

If to the Equity Committee:

Jones Day

2727 North Harwood Street

Dallas, Texas 75201

Attn: Daniel P. Winikka

Telephone: (214) 220-3939

Facsimile: (214) 969-5100

E-Mail: dpwinikka@jonesday.com

 

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Any notice given by delivery, mail or courier shall be effective when received.
Any notice given by facsimile shall be effective upon oral or machine
confirmation of transmission.

28. Remedies Cumulative. All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise of any right, power, or remedy
thereof by any Party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such Party.

29. No Third-Party Beneficiaries. The terms and provisions of this Agreement are
intended solely for the benefit of the Parties hereto and their respective
successors and permitted assigns, and it is not the intention of the Parties to
confer third-party beneficiary rights upon any other Person.

30. Allowed Amount. The Company acknowledges and agrees and shall acknowledge
and agree in the Chapter 11 Cases that, as of the Petition Date, the Company is
indebted and liable to the Senior Noteholders, without objection, dispute,
disallowance, defense, counterclaim, avoidance, recharacterization or offset of
any kind or nature under the Indenture and the Senior Notes in the aggregate
principal amount of $210,000,000 (plus accrued and unpaid interest thereon and
fees, expenses and other obligations (including any reasonable fees and expenses
of the Trustee and the advisors (NH Legal Counsel and Houlihan Lokey) to the
Noteholders that are chargeable or reimbursable under the Indenture or the
Senior Notes or this Agreement)) incurred under or in connection with the
Indenture and the Senior Notes. The Plan shall include a settlement under
Bankruptcy Code section 1123(b)(3) and Bankruptcy Rule 9019 irrevocably and
fully allowing the Senior Note Claim as of the Confirmation Date.

31. Holding Period. For the purposes of Rule 144 under the Securities Act of
1933, as amended, the Company acknowledges that the holding period of the Senior
Notes may be tacked onto the holding period of the New Common Shares (as defined
in the Plan) received by the Noteholders pursuant to the Plan, including,
without limitation in connection with the Backstop Commitment. The Company
agrees not to take a position contrary to this section 30.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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GSI GROUP INC., on behalf of itself and its affiliates and subsidiaries listed
below By:   /s/ Marina Hatsopoulos Name:   Marina Hatsopoulos Title:   Director

GSI Group Corporation

MES International, Inc.

--------------------------------------------------------------------------------

Execution Copy

 

OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS

By:   /s/ Stephen W. Bershad

Name:   Stephen W. Bershad

By:   /s/ Bradley Louis Radoff

Name:   Bradley Louis Radoff JEC II Associates, LLC

By:   /s/ Michael Torok

Name:   Michael Torok Title:   Vice President EQUITY HOLDERS /s/ Stephen W.
Bershad Name:   Stephen W. Bershad /s/ Bradley Louis Radoff Name:   Bradley
Louis Radoff JEC II Associates, LLC

By:   /s/ Michael Torok

Name:   Michael Torok Title:   Vice President

[Signature Page to Restructuring Plan Support Agreement]

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Execution Copy

 

NOTEHOLDERS, each in its individual capacity thereof HALE CAPITAL PARTNERS, LP
By:    /s/ Martin Hale, Jr.   Name:    Martin Hale, Jr.   Title:   Managing
Member LIBERTY HARBOR MASTER FUND I, L.P. By:   Liberty Harbor I GP, LLC, its
general partner

  By:   /s/ Gregg J. Felton     Name:    Gregg J. Felton     Title:   President
TINICUM CAPITAL PARTNERS II, L.P. By:   Tinicum Lantern II LLC, Its General
Partner   By:   /s/ Eric Ruttenberg     Name:    Eric Ruttenberg     Title:  
Managing Partner HIGHBRIDGE INTERNATIONAL LLC By:  

Highbridge Capital Management, LLC

Its Trading Manager

  By:   /s/ Mark J. Vanacore     Name:    Mark J. Vanacore     Title:   Managing
Director

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SPECIAL VALUE CONTINUATION PARTNERS, L.P. By:   Tennenbaum Capital Partners, LLC
  Its: Investment Manager SPECIAL VALUE EXPANSION FUND, LLC By:   Tennenbaum
Capital Partners, LLC   Its: Investment Manager

TENNENBAUM OPPORTUNITIES

PARTNERS V, LP

By:   Tennenbaum Capital Partners, LLC   Its: Investment Manager

SPECIAL VALUE OPPORTUNITIES

FUND, LLC

By:   Tennenbaum Capital Partners, LLC   Its: Investment Manager Each of the
above by:   By:    /s/ Howard Levkowitz     Name:   Howard Levkowitz     Title:
  Managing Partner

 

22

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Execution Copy

Schedule 1

ADDENDUM

Reference is made to that certain Restructuring Plan Support Agreement (as
amended, modified or supplemented from time to time, the “Agreement”) by and
among GSI Group, Inc. and each of its subsidiaries and affiliates that are
debtors in the Chapter 11 Cases (collectively, “Company”) the Equity Committee,
each Equity Holder and each of the Noteholders party thereto from time to time.
Each capitalized term used but not defined herein shall have the meaning given
to it in the Agreement.

Upon execution and delivery of this Addendum by the undersigned, as provided in
section 19 of the Agreement, the undersigned hereby becomes a Noteholder or
Equity Holder, as applicable thereunder and bound thereby effective as of the
Lock-Up Effective Date.

By executing and delivering this Addendum, the undersigned represents and
warrants, for itself and for the benefit of each party to the Agreement, that:

 

  (a) as of the date of this Addendum, (i) with respect to a Transferee, who
becomes a Noteholder, is the legal and beneficial owner of the principal amount
of the Senior Note Claims (the “Senior Note Amount”), or advisor for beneficial
holders of such Senior Note Amount as set forth below its signature, except to
the extent that it may have entered into an agreement to transfer all or a
portion of such Senior Note Amount and the transferee has executed and delivered
an Assumption and Joinder Agreement therefor (a copy of which is attached to
this Addendum) and (ii) with respect to a Transferee, who becomes an Equity
Holder, is the legal and beneficial owner of the Holdings Common Shares or is
the nominee, investment manager or advisor for beneficial holders of such
Holdings Common Shares as set forth below its signature, except to the extent
that it may have entered into an agreement to transfer all or a portion of such
Holdings Common Shares and the transferee has executed and delivered an
Assumption and Joinder Agreement therefor (a copy of which is attached to this
Addendum);

 

  (b) other than pursuant to the Agreement, its ownership of the Senior Note
Amount or Holdings Common Shares, as applicable, is free and clear of any
pledge, lien, security interest, charge, claim, equity, option, proxy, voting
restriction, right of first refusal, or other limitation on disposition or
encumbrances of any kind that would adversely affect in any way such
Transferee’s performance of its obligations contained in the Agreement at the
time such obligations are required to be performed;

 

  (c)

as of the date of this Addendum, with respect to each Transferee that (i) is an
individual, such Transferee has all requisite authority to enter into this
Addendum and to carry out the transactions contemplated by, and perform its
respective obligation under, the Agreement and (ii) is not an individual

--------------------------------------------------------------------------------

  such Transferee is, it is duly organized, validly existing, and in good
standing under the laws of the state of its organization, and has all requisite
corporate, partnership, or limited liability company power and authority to
enter into this Addendum and to carry out the transactions contemplated by, and
perform its respective obligations under, the Agreement;

 

  (d) assuming the due execution and delivery of the Agreement by the Company
the Addendum and the Agreement are legally valid and binding obligations of it,
enforceable against it in accordance with its terms, except as may be limited by
bankruptcy, insolvency or similar laws, or by equitable principles relating to
or limiting creditors’ rights generally; and

 

  (e) as of the date of this Addendum, it is not aware of any event that, due to
any fiduciary or other duty to any other person, would prevent it from taking
any action required of it under the Agreement and this Addendum.

By executing and delivering this Addendum, the undersigned agrees to be bound by
all the terms of the Agreement and will take all necessary action to cause the
Trustee in connection with the Restructuring and the Plan to vote to accept the
Plan unless a Termination Event has occurred and become effective with respect
to the Agreement.

The undersigned acknowledges and agrees that once delivered to the Company, it
may not revoke, withdraw, amend, change or modify this Addendum unless a
Termination Event has occurred and become effective with respect to the
Agreement.

THIS ADDENDUM SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.

This Addendum may be executed in one or more counterparts, each of which, when
so executed, shall constitute the same instrument and the counterparts may be
delivered by facsimile transmission or by electronic mail in portable document
format (.pdf).

[Signature on Following Page]

 

2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be duly
executed and delivered by their proper and duly authorized officers as of this
         day of                 , 2010.

 

TRANSFEREE WHO BECOMES A NOTEHOLDER [NAME]  

as a Noteholder

[Please type the legal name of the undersigned above]

By:     Name:   Title:   [If second signature is necessary:] By:     Name:  
Title:   Principal Amount of Senior Notes: $             TRANSFEREE WHO BECOMES
AN EQUITY HOLDER [NAME]   as an Equity Holder [Please type the legal name of the
undersigned above] By:     Name:   Title:   [If second signature is necessary:]
By:     Name:   Title:   Holdings Common Shares:             

 

3

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Execution Copy

Schedule 2

ASSUMPTION AND JOINDER AGREEMENT

Reference is made to (i) that certain Restructuring Plan Support Agreement (as
amended, modified or supplemented from time to time, the “Agreement”), dated as
of                     , 2010, by and among GSI Group, Inc. (“GSI Group”) and
each of its subsidiaries and affiliates that are a debtor in the Chapter 11
Cases (collectively, “Company”), the Equity Committee, each Equity Holder and
each of the Noteholders party thereto from time to time, and (ii) that certain
Addendum, dated as of                     , 2010 (the “Transferor Addendum”)
submitted by                                 , as transferor (the “Transferor”).
Each capitalized term used but not defined herein shall have the meaning given
to it in the Agreement.

As a condition precedent to becoming the holder or owner of

¨                                  dollars ($            ) in principal amount
of the Senior Note Claims

¨                                  Holdings Common Shares

held as of the date hereof by the Transferor, the undersigned (the “Transferee”)
hereby agrees to become bound by all the terms, conditions and obligations set
forth in the Agreement and the Transferor Addendum copies of which are attached
hereto as Annex I. This Assumption and Joinder Agreement shall take effect and
shall become an integral part of the Agreement and the Transferor Addendum
immediately upon its execution, and the Transferee shall be deemed to be bound
by all of the terms, conditions and obligations of the Agreement and the
Transferor Addendum as of the date thereof. The (i) Transferee acquiring
Holdings Common Shares from an Equity Holder shall hereafter be deemed to be a
“Equity Holder” and a “Party” for all purposes under the Agreement, and
(ii) Transferee acquiring Senior Note Claims from a Noteholder shall hereafter
be deemed to be a “Noteholder” and a “Party” for all purposes under the
Agreement.

[Signatures on Following Page]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Assumption and Joinder Agreement has been duly executed
by each of the undersigned as of the date specified below.

Date:                     , 2010

 

          Name of Transferor     Name of Transferee           Authorized
Signatory of Transferor     Authorized Signatory of Transferee           (Type
or Print Name and Title of Authorized Signatory)     (Type or Print Name and
Title of Authorized Signatory)             Address of Transferee:              
        Attn:           Tel:           Fax:           E-mail:      

 

2

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Execution Copy

Exhibit A

PLAN

(See attached.)

[Signature Page to Restructuring Plan Support Agreement]

--------------------------------------------------------------------------------

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

 

 

FOURTH MODIFIED JOINT CHAPTER 11 PLAN OF REORGANIZATION

FOR MES INTERNATIONAL, INC., GSI GROUP INC. AND

GSI GROUP CORPORATION

 

 

 

Dated: May 14, 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.

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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 and Section 510(b) Claims – Class 6A
Claims and Interests    5  

3.7.

   Class 6B – GSI Equity Interests    6  

3.8.

   Class 6C – MES Equity Interests    6  

3.9.

   Class 6A Reserve Provisions    6 ARTICLE IV. PROVISIONS FOR TREATMENT OF
UNCLASSIFIED CLAIMS UNDER THE PLAN    8  

4.1.

   Unclassified Claims    8  

4.2.

   Treatment of Administrative Claims    8  

4.3.

   Treatment of Tax Claims    9

ARTICLE V. ACCEPTANCE OR REJECTION OF THE PLAN; EFFECT OF REJECTION BY ONE OR
MORE CLASSES OF CLAIMS OR EQUITY INTERESTS

   10  

5.1.

   Classes Entitled to Vote    10  

5.2.

   Class Acceptance Requirement    10  

5.3.

   Cramdown    10  

5.4.

   Confirmation in All Cases    10

ARTICLE VI. MEANS FOR IMPLEMENTATION OF THE PLAN

   10  

6.1.

   Operations between the Confirmation Date and the Effective Date    10

 

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6.2.

   Reporting Requirements Under Exchange Act, Listing on Securities Exchange and
Registration Rights Agreement    11  

6.3.

   Reorganized Holdings Constituent Documents    11  

6.4.

   New Corporate Structure for Reorganized Holdings    11  

6.5.

   Cancellation of Holdings Equity Interests, GSI UK Note and Senior Notes    11
 

6.6.

   New Common Shares, New Equity Awards and Rights    12  

6.7.

   Rights Offering    13  

6.8.

   ARS Sale    13  

6.9.

   New Senior Secured Notes    13  

6.10.

   Other General Corporate Matters    14  

6.11.

   Continued Corporate Existence of the Debtors    14  

6.12.

   Re-vesting of Assets    14  

6.13.

   Management    15  

6.14.

   Boards of Directors    15  

6.15.

   Officers    16  

6.16.

   New Equity Awards and Management Incentive Plan    16  

6.17.

   Causes of Action    17  

6.18.

   Appointment of the Disbursing Agent    17  

6.19.

   Sources of Cash for Plan Distributions    17  

6.20.

   Releases by the Debtors    17  

6.21.

   Releases by Creditors and Equity Security Holders    18  

6.22.

   Fixing of Principal Balance of GSI UK Note    19

ARTICLE VII. PLAN DISTRIBUTION PROVISIONS

   19  

7.1.

   Plan Distributions    19  

7.2.

   Timing of Plan Distributions    19  

7.3.

   Address for Delivery of Plan Distributions/Unclaimed Plan Distributions    19
 

7.4.

   De Minimis Plan Distributions    20  

7.5.

   Time Bar to Cash Payments    20  

7.6.

   Manner of Payment under the Plan    20  

7.7.

   Expenses Incurred on or after the Effective Date and Claims of the Disbursing
Agent    20  

7.8.

   Fractional Plan Distributions    20  

7.9.

   Special Plan Distribution Provisions for Equity Interests and Senior Note
Claims    21  

7.10.

   Surrender and Cancellation of Instruments    22

ARTICLE VIII. PROCEDURES FOR RESOLVING AND TREATING CONTESTED CLAIMS

   22  

8.1.

   Objection Deadline    22  

8.2.

   Prosecution of Contested Claims    23  

8.3.

   Claims Settlement    23  

8.4.

   Entitlement to Plan Distributions Upon Allowance    23  

8.5.

   Estimation of Claims    23

ARTICLE IX. CONDITIONS PRECEDENT TO CONFIRMATION OF THE PLAN AND THE OCCURRENCE
OF THE EFFECTIVE DATE

   24  

9.1.

   Conditions Precedent to Confirmation    24  

9.2.

   Conditions Precedent to the Occurrence of the Effective Date    24

 

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9.3.

   Waiver of Conditions    25  

9.4.

   Effect of Non-Occurrence of the Effective Date    25

ARTICLE X. THE DISBURSING AGENT

   25  

10.1.

   Powers and Duties    25  

10.2.

   Plan Distributions    26  

10.3.

   Exculpation    26

ARTICLE XI. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

   26  

11.1.

   Assumption and Rejection of Executory Contracts and Unexpired Leases    26  

11.2.

   Cure    28  

11.3.

   Claims Arising from Rejection, Expiration or Termination    28

ARTICLE XII. RETENTION OF JURISDICTION

   29

ARTICLE XIII. MISCELLANEOUS PROVISIONS

   31  

13.1.

   Payment of Statutory Fees    31  

13.2.

   Satisfaction of Claims    31  

13.3.

   Special Provisions Regarding Insured Claims    31  

13.4.

   Subrogation    32  

13.5.

   Third Party Agreements; Subordination    32  

13.6.

   Exculpation    32  

13.7.

   Discharge of Liabilities    32  

13.8.

   Discharge of Debtors    33  

13.9.

   Notices    34  

13.10.

   Headings    34  

13.11.

   Governing Law    34  

13.12.

   Expedited Determination    35  

13.13.

   Exemption from Transfer Taxes    35  

13.14.

   Retiree Benefits    35  

13.15.

   Notice of Entry of Confirmation Order and Relevant Dates    35  

13.16.

   Interest and Attorneys’ Fees    35  

13.17.

   Modification of the Plan    35  

13.18.

   Revocation of Plan    36  

13.19.

   Setoff Rights    36  

13.20.

   Compliance with Tax Requirements    37  

13.21.

   Rates; Currency    37  

13.22.

   Injunctions    37  

13.23.

   Binding Effect    38  

13.24.

   Severability    38  

13.25.

   No Admissions    38  

13.26.

   Senior Notes Settlement    38

 

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TABLE OF EXHIBITS

 

Exhibit

  

Name

A    Glossary of Defined Terms B    List of Plan Documents

 

iv

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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 seven (7) 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

 

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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)

 

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Class

  

Designation

  

Impairment

  

Whether Entitled to Vote

Class 4B    GSI Intercompany Claims    Unimpaired    No (deemed to accept) 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, at the sole
discretion of the applicable Debtor, receive the following treatment: (i) 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, (ii) be paid in accordance with the
terms under which such Allowed Intercompany Claim arose, (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 Intercompany Claim, or (iv) be canceled
and be of no further force or effect.

 

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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 as set forth in Section 13.26(a) to the extent such fees, expenses
and other amounts are due and payable under the Allowed Note Claim as set forth
in Section 13.26(a) and unpaid as of the Effective Date;

(iii) a payment in Cash of Post-Petition Interest from the Petition Date through
the Effective Date;

(iv) a Pro Rata Share of the Notes Payment;

(v) a Pro Rata Share of the Contingent Excess Cash;

(vi) a Pro Rata Share of the Supplemental Equity Exchange; and

(vi) a Pro Rata Share of the New Senior Secured Notes, but only as and to the
extent such Senior Note has not been exchanged in connection with the Note
Exchanges or paid pursuant to the Notes Payment;

provided, however, that the provisions of Section 3.5(ii) above shall not apply
to any fees, expenses and other amounts arising under the Backstop Commitment
Agreement.

 

3.6. Class 6A – Holdings Equity Interest and Section 510(b) Claims – Class 6A
Claims and Interests.

On the Effective Date, all Class 6A Claims and Interests shall be cancelled or
discharged, as applicable, and on account of each Allowed Class 6A Claim and
Interest there shall be distributed on the Plan Distribution Date:

(i) a Pro Rata Share of that number of New Common Shares to be issued in respect
of all of the Class 6A Claims and Interests that is equal to the number of
Holdings Common Shares issued and outstanding immediately preceding the
Effective Date (excluding treasury stock) plus the number of Holdings Common
Shares that are not

 

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issued but are earned and have vested prior to or vest as of the Effective Date,
subject to adjustment pursuant to Section 3.9 below, which shall be subject to
dilution based upon additional New Common Shares to be issued in connection with
the Rights Offering, Note Exchanges, New Equity Awards and the Management
Incentive Plan and subject to adjustment pursuant to Section 3.9 below; and

(ii) a Pro Rata Share of Rights, to be issued in respect of Allowed Class 6A
Claims and Interests based on Holdings Common Shares outstanding immediately
preceding the Effective Date (excluding treasury stock and Holdings Common
Shares that have not vested as of the Rights Offering Commencement Date), to
participate in the Rights Offering.

All Equity Interests in Holdings which are either unexercised or unvested
(following any applicable acceleration provisions of such Equity Interest) as of
the Effective Date, including treasury stock and all options, warrants, calls,
rights, participation rights, puts, awards, commitments (and therefore are not
included in the definition of Holdings Equity Interests), all Shareholder Rights
(including any Shareholder Right not yet exercisable pursuant to the Shareholder
Rights Plan) and any other agreements of any character to acquire such Equity
Interest shall be cancelled and terminated on the Effective Date. The Holders of
Shareholder Rights shall neither receive nor retain any property under the Plan
on account of such Shareholder Rights unless the Bankruptcy Court orders
otherwise. The Holders of Equity Interests in Holdings which are identified on
Schedule 6.16(a) hereof and are unexercised or unvested as of the Effective Date
(other than Shareholder Rights) shall receive Plan Distributions only pursuant
to Section 6.16(a) and Schedule 6.16(a) hereof.

 

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.

 

3.9. Class 6A Reserve Provisions.

The treatment provided to the holders of Allowed Class 6A Claims and Interests
under Section 3.6 hereof is subject to the following adjustment:

(a) an amount of New Common Shares equal to 6.165% of the New Common Shares to
be distributed under Section 3.6 hereof, which shall be subject to dilution
based up additional New Common Shares to be issued in connection with the Rights
Offering, Note Exchanges, New Equity Awards and the Management Incentive Plan,
shall be set aside in a reserve (“Class 6A Reserve”); and

 

6

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(b) any Plan Distribution pursuant to Section 3.6 hereof on account of Allowed
Section 510(b) Claims that become allowed after the Effective Date shall be made
solely out of the Class 6A Reserve and any portion of such Allowed
Section 510(b) Claim which cannot be so covered shall not be entitled to any
Plan Distribution.

Any New Common Shares in the Class 6A Reserve shall be voted by the Escrow Agent
proportionally in the same manner as the New Common Shares are voted.

The Class 6A Reserve shall be subject to the terms of the Escrow Agreement and
shall become available for distribution first to the holders of Section 510(b)
Claims and then to holders of Allowed Holdings Equity Interests only at such
time as the Securities Class Action (i) has become subject to a final settlement
or a Final Order and (ii) any available insurance for such Allowed
Section 510(b) Claims has been exhausted or is determined to be unavailable to
satisfy all or a portion of such Claims, pursuant to one or more Final Orders.
At such time, the Class 6A Reserve will be distributed pursuant to Section 3.9
hereof and the terms of the Escrow Agreement first to holders of Section 510(b)
Claims that are Allowed at such time (subject, for the avoidance of doubt, to
any deduction of such Claims pursuant to Section 13.3 hereof). To the extent all
or any portion of the Class 6A Reserve is not distributed to holders of Allowed
Section 510(b) Claims, such remaining portion of the Class 6A Reserve shall be
distributed to holders of Allowed Holdings Equity Interests on a Pro Rata basis.

The Class 6A Reserve shall be treated as a disputed ownership fund pursuant to
Treasury Regulations Section 1.468B-9(b)(1) or as otherwise determined by the
Debtors. The Escrow Agent shall file income tax returns for the Class 6A Reserve
pursuant to Treasury Regulations Section 1.468B-9(c)(1) or as otherwise
determined by the Debtors and shall pay all taxes owed on any net income or gain
of the Class 6A Reserve on a current basis solely from the assets of such Class
6A Reserve. Notwithstanding the foregoing, the Debtor may (with the consent of
the Required Noteholders) determine that it is more efficient to treat the Class
6A Reserve as something other than a disputed ownership fund under Treasury
Regulations Section 1.468-9(b)(1) (e.g., an IRC Section 641 trust).

Nothing in the Plan shall be deemed to affect, or otherwise prejudice, the
rights of the holders of Section 510(b) Claims to pursue, collect on, or receive
a recovery or proceeds from, any policy of insurance providing coverage for such
Claims.

The Debtors reserve the right, following a final settlement or Final Order
reducing the size of the class in the Securities Class Action but not disposing
of the Securities Class Action, to seek an order from the Court reducing the
number of New Common Shares held in the Class 6A Reserve. Any New Common Shares
released from the Class 6A Reserve as a result of such an order shall be
promptly distributed to holders of Holdings Equity Interests that are Allowed on
such date on a Pro Rata basis.

 

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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.

(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.

 

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(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 fifth anniversary of the
Petition Date (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 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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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.

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.

 

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6.2. Reporting Requirements Under Exchange Act, Listing on Securities Exchange
and Registration Rights Agreement.

(a) Reporting Requirements and Listing. Reorganized Holdings shall use its best
efforts to be a mandatory reporting company under Section 12 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, but subject to Section 6.14(a), 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.

(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, 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

 

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(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, New Equity Awards and Rights.

As consideration for the issuance by Reorganized GSI to Reorganized Holdings of
a number of newly issued shares of common stock of Reorganized GSI which
reflects the Note Claims exchanged in the Note Exchanges, Reorganized Holdings
shall 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 reservation for issuance, as applicable, and the
issuance by Reorganized Holdings of the New Common Shares (including the New
Common Shares issuable upon exercise of the Rights or exercise or vesting of the
New Equity Awards), the Rights and the New Equity Awards is hereby authorized
without further act or action under applicable law, regulation, order or rule.

The Confirmation Order shall provide that the issuance of (a) the (i) New Common
Shares issuable (x) to holders of Allowed Class 6A Claims and Interests and
(y) pursuant to the Supplemental Equity Exchange, (ii) New Equity Awards,
(iii) Rights, (iv) New Common Shares issuable upon exercise of the Rights or
exercise or vesting of New Equity Awards 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, and (b) the securities
issuable to the Backstop Investors shall be exempt from the registration
requirements of the Securities Act in accordance with section 1145 of the
Bankruptcy Code, or, if and to the extent section 1145 does not apply,
Section 4(2) of the Securities Act.

 

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6.7. Rights Offering.

Each holder of Holdings Common Shares shall have the opportunity to participate
in the Rights Offering on the terms and subject to the conditions set forth in
the Rights Offering Procedures. To the extent that any such holder does not
fully elect to exercise its Rights by 11:59 p.m., New York City Time, on the
Subscription Expiration Date, such unexercised Rights shall expire, and the
Backstop Investors shall purchase the remaining amount of New Common Shares
offered in the Rights Offering pursuant to and in accordance with the Backstop
Commitment Agreement. Pursuant to the Backstop Commitment, the Backstop
Investors shall exchange (the “Backstop Exchange”) a minimum face amount of $20
million (but in no event no more than the Rights Offering Amount) of Senior
Notes held by the Backstop Investors, after giving effect to the Notes Payment,
for New Common Shares at the Purchase Price Per Share as provided in the Rights
Offering Documents. The Backstop Investors shall purchase such New Common Shares
by, at each of their option to be exercised in their sole and absolute
discretion, paying cash or exchanging the principal amount of Senior Notes equal
to such Backstop Investor’s Purchase Price (as defined in the Backstop
Commitment Agreement). All Cash proceeds from the Rights Offering shall be used
to partially fund the Notes Payment.

 

6.8. ARS Sale.

Holdings or Reorganized Holdings, as the case may be, shall effectuate, as
necessary, the ARS Sale. All proceeds from the ARS Sale available on the
Effective Date, if any, shall be used to partially fund the Notes Payment.

 

6.9. 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.

 

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(c) Security Documents. On or before the Effective Date, (i) Reorganized
Holdings, Reorganized GSI and Reorganized MES shall execute and shall cause
their respective 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, Reorganized GSI and Reorganized MES
shall deliver or shall cause their respective Subsidiaries to deliver the
Security Documents.

 

6.10.   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 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.

 

6.11.   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.

 

6.12.   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.

 

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6.13.   Management.

Except as set forth in Section 6.14 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.

 

6.14.   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 Restructuring Officer of Reorganized
Holdings, two members selected by the Required Noteholders, two members with
industry expertise selected by the Equity Committee, one member selected by
mutual agreement between the Required Noteholders and the Equity Committee (the
“Consensual Board Member”), and one member selected by the Board of Directors of
Holdings prior to the Effective Date, which member shall be selected from the
members of such board as of the date hereof, provided that at least a majority
of the Board of Directors shall satisfy the NASDAQ Stock Market’s definition of
“Independent Directors”). A member of the Equity Committee may be selected to
serve as a member of the board of directors of Reorganized Holdings only if such
Equity Committee member subscribed to the Rights Offering to the fullest extent
permissible based upon the amount of Holdings Common Shares held by such Equity
Committee member as of May 7, 2010. The directors shall serve in accordance with
the applicable Reorganized Holdings Constituent Documents, as the same may be
amended from time to time.

Each of Liberty Harbor, LLC, Tennenbaum Capital Partners, LLC, and Highbridge
Capital Management, LLC (each a “Noteholder Observer Party”) shall, at its
expense, have the right to observe all meetings and deliberations of the board
of directors of Reorganized Holdings. A Noteholder Observer Party shall lose its
rights under this paragraph if at any time it holds less than 3% of the New
Common Shares then outstanding.

(b) Reorganized GSI. From and after 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.

(c) Reorganized MES. From and after the Effective Date, the Consensual Board
Member shall be the sole member of the initial board of directors of Reorganized
MES.

(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.

 

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6.15.   Officers.

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.

 

6.16.   New Equity Awards and Management Incentive Plan.

(a) New Equity Awards. On the Effective Date each Holder of

(1) options to purchase common shares of Holdings that are set forth on Schedule
6.16(a) hereof and have not been exercised as of the Effective Date as reflected
on Schedule 6.16(a) (“Old Options”) shall be assumed and remain outstanding and
exercisable for New Common Shares subject to the same terms as the Old Options,
including, without limitation, the exercise price (“New Options”), provided that
if distributions to Holders of Holdings Common Shares pursuant to Section 3.6
are made by way of issuing such Holders a fractional New Common Share for each
Holdings Common Share so held (“Fractional Distribution”), the number of New
Common Shares issuable upon exercise of such New Option shall similarly be
adjusted down to reflect the Fractional Distribution (for the avoidance of
doubt, no underlying contract or agreement pursuant or in accordance to which
such Old Options is issued shall be assumed); and

(2) restricted shares of Holdings that are set forth on Schedule 6.16(a) hereof
and have not vested as of the Effective Date as reflected on the Schedule
6.16(a) (“Old Restricted Shares”) shall be assumed and remain outstanding on the
same terms as the Old Restricted Shares, including, without limitation, the
vesting provisions (“New Restricted Shares”) provided that the number of New
Restricted shall be adjusted down to reflect any Fractional Distribution (for
the avoidance of doubt, no underlying contract or agreement pursuant or in
accordance to which such Old Options is issued shall be assumed).

The rights afforded holders of Old Options and Old Restricted Shares pursuant to
this Section 6.16(a) shall be in exchange for and in complete satisfaction,
discharge, and release of all Claims and Equity Interests on account of such Old
Options and Old Restricted Shares, against the Debtors and the Debtors in
Possession, or any of their Estates, Assets, properties, or interests in
property.

(b) 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

 

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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.

 

6.17.   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 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.

 

6.18.   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.

 

6.19.   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.

 

6.20.   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

 

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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. For purposes of this Section 6.20, “Released Parties” shall
also include the Equity Committee and its members, in their capacity as members
of the Equity Committee and as individual entities, and with respect to each of
the foregoing entities, such entity’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 and other professionals,
in each case in their capacity as such.

 

6.21.   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, 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; provided further that the foregoing releases shall not apply to any
holder of a Claim or Equity Interest if such holder opted out of the releases
provided for in this Section 6.21 by a timely written election pursuant to such
holder’s ballot.

 

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6.22.   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.

 

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.

 

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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.

 

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 or
vesting of New Equity Awards) 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

 

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Section 7.8, the number of New Common Shares to be distributed (including New
Common Shares issuable upon the exercise or vesting of New Equity Awards) 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 Equity Awards or New Common Shares in the
amounts specified in Article III, Section 6.16(a) and Schedule 6.16(a) hereto;
provided, further, that this Section 7.8(a) shall not apply to Rights
distributed in the Rights Offering or the New Common Shares issued pursuant to
the exercise of Rights in connection with the Rights Offering and the Backstop
Exchange, each of which shall be governed by the Rights Offering Procedures or
Backstop Commitment Agreement, as applicable.

(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 Holdings Equity Interests and Senior Notes shall be closed as of the close
of business on the Plan Distribution Record 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 Holdings Equity Interests and Senior Notes as of
the close of business on the Plan Distribution Record Date, provided, however,
that with respect to making Plan Distributions on account of Restricted Shares
of Holdings, which shares have vested as of the Effective Date, but which have
not been issued as of the Effective Date and are therefore not reflected on the
transfer ledger, Plan Distributions shall be made in accordance with Holdings’
Restricted Share ledger as set forth in Schedule 6.16(a). On the Effective Date,
(a) all Holdings Equity Interests, Old Options, Old Restricted Shares and Senior
Notes shall be cancelled and annulled and (b) all Section 510(b) Claims shall be
discharged, and all rights thereunder shall be settled and compromised in full
in exchange for the Plan Distributions to be made to the holders of Holdings
Equity Interests, Senior Note Claims, Old Options, Old Restricted Shares and
Section 510(b) Claims as applicable.

 

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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
(including any distributions out of the Class 6A Reserve) 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 less any applicable taxes, and without interest or other compensation for
the time elapsed after the Effective Date, provided that any distributions on
account of Allowed Section 510(b) Claims that become Allowed after the Effective
Date shall only be made out of the Class 6A Reserve in accordance with
Section 3.9.

 

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 on the docket of the
Chapter 11 Cases 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, (vii) the
Confirmation Order consistent with the Plan Support Agreement and
(viii) 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 proposed Confirmation Order and Plan Documents are each in a form and
substance reasonably satisfactory to the Debtors, the Required Noteholders, and,
except in the case of the Backstop Commitment Agreement, the Equity Committee;

(c) The Plan Support Agreement shall not have terminated in accordance with the
terms thereof; and

(d) The proposed 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) 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;

(b) The New Indenture shall be executed and have become effective and all
conditions to the effectiveness thereof shall have been satisfied or waived;

 

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(c) The Confirmation Order or such portions thereof as are required shall have
been confirmed and recognized by the Court of Queen’s Bench of New Brunswick;

(d) 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;

(e) The Plan Documents (i) shall have been approved by the Bankruptcy Court,
(ii) as applicable, shall have been executed by the Debtors, the Equity
Committee, and the Backstop Investors and (iii) shall be in full force and
effect;

(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 Rights Offering and Backstop Commitment shall have been consummated on
the terms and conditions set forth in the Rights Offering Documents; and

(h) The Effective Date shall have occurred by July 23, 2010, unless such date is
extended pursuant to the terms of 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)

 

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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.

 

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
Documents, any Final Order of the Bankruptcy Court entered pursuant to or in the
furtherance of the Plan Documents, 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
Documents, or (b) against any holder of a Claim or an Equity Interest for
receiving or retaining Plan Distributions as provided for by the Plan Documents.
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 Documents 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 (including any schedule hereto) or
by order of the Bankruptcy

 

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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 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

 

27

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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 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 three (3) days prior to
the commencement of 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

 

28

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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.

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;

 

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(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 and Plan Documents) 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;

(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 Disclosure Statement Order and the Confirmation Order; and

(xvii) To hear and determine any other matters related hereto and not
inconsistent with the Bankruptcy Code.

 

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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 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 for
purposes of calculating the Allowed amount of such Claim entitled to Plan
Distribution there shall be deducted from such Claim: (i) the amount of any
insurance proceeds actually received by such holder in respect of such Allowed
Insured Claim and (ii) with respect to any Section 510(b) Claim any payment by a
Debtor to the holder of such claim from the Debtors’ self insured retention
amount. The Debtors shall be authorized to pay from cash an amount up to an
aggregate cap of $300,000, the self-insured portion of any settlement of the
Securities Class Action. 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.

 

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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 to seek subordination of any
Claim (other than the Senior Note Claims) 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.

 

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 and Plan Documents, the implementation or administration of the Plan and
Plan Documents, or the property to be distributed under the Plan and Plan
Documents, 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 and
Plan Documents and the negotiation of the Plan and Plan Documents. For purposes
of this Section 13.6, “Released Parties” shall also include the Equity Committee
and its members, in their capacity as members of the Equity Committee and as
individual entities, and with respect to each of the foregoing entities, such
entity’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 and other professionals, in each case in their capacity as
such.

 

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.

 

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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 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; and provided further, notwithstanding any language to the contrary
contained in the Disclosure Statement, Plan and/or Confirmation Order, no
provision shall release any nondebtor from liability in connection with any
legal action or claim brought by the U.S. Securities and Exchange Commission.
This paragraph shall not affect or limit the discharge granted to the Debtors
under sections 524 and 1141 of the Bankruptcy Code.

 

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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.

c/o FTI Consulting, Inc.

Attention: Michael E. Katzenstein, Chief Restructuring Officer

3 Times Square, 9th Floor

New York, NY 10036

Telephone: (214) 384-4909

Facsimile: (214) 260-7127

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

 

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.

 

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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.

(b) All reasonable, due and unpaid fees, costs and expenses of NH Professionals,
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

 

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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.

 

13.19.   Setoff Rights.

In the event that any Debtor has a Claim of any nature whatsoever against the
holder of a Claim (other than the Senior Note Claims) 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.

 

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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);

(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.

 

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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.

 

13.26.   Senior Notes Settlement.

Pursuant to section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019
and subject to the occurrence of the Effective Date, the entry of the
Confirmation Order shall constitute approval of a compromise and settlement of
any objection, dispute, disallowance, defense, counterclaim, avoidance,
subordination, recharacterization or offset of any kind or nature to:

(a) the Class 5 Senior Note Claim in the aggregate amount of (A) $210,000,000 in
principal due and owing under the Senior Notes as of the Petition Date, plus
(B) $6,031,666.67 in accrued pre-petition interest, plus (C) accrued
post-petition interest, plus (D) reimbursement of reasonable fees and expenses
as provided in section 6 of the Plan Support Agreement, and plus (E) any other
obligations arising under the Senior Notes, the Indenture or the Plan Support
Agreement (including any reasonable fees and expenses of the Trustee); and

 

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(b) the Holdings Equity Interest held by the holders of the Senior Notes.

The Senior Note Claim shall be an Allowed Class 5 Claim on the Confirmation Date
and shall be entitled to the treatment provided under section 3.5 of the Plan.
The Holdings Equity Interest held by the holders of the Senior Notes shall be an
Allowed Class 6A Equity Interest on the Confirmation Date and shall be entitled
to the treatment provided under section 3.6 of the Plan.

In consideration for the foregoing, the Noteholders (as defined in the Plan
Support Agreement) agreed to: (i) enter into the Plan Support Agreement,
(ii) support the Plan and the release and discharge provisions contained
therein, (iii) withdraw proofs of claim numbers 64, 65, 66, 67, 68, 69, 70, 71,
72, 73, 74, 75, 76, 77, 78, 79 and 80 as soon as practical after the Effective
Date; (iv) forebear from enforcing the pre-Petition Date guaranty obligation of
Excel Technology Inc. based on any act that occurred prior to the Effective Date
and (v) terminate the pre-Petition Date guaranty of Excel Technology Inc. upon
the Effective Date and receipt by holders of Senior Note Claims of the Plan
Distributions required to be made under Section 3.5 of the Plan.

[SIGNATURES ON NEXT PAGE]

 

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Dated: May 14, 2010

 

Respectfully submitted, GSI Group Inc., on behalf of itself, GSI Group
Corporation and MES International, Inc. By:   /s/ Marina Hatsopoulos Name:  
Marina Hatsopoulos Title:   Director

 

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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”   

(a) 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;

 

(b) 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

 

(c) 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, (A) the issued and outstanding common shares in
Holdings as reflected in the stock transfer ledger as of the Effective Date and
(B) with respect to Restricted Shares, as reflected on Holdings’ restricted
share ledger as set forth in the Schedule 6.16(a) provided that such Restricted
Shares have vested in accordance with their terms as specified in Schedule
6.16(a).

4.   “ARS Sale”    means the sale, liquidation or other disposition of the
Debtors’ remaining auction rate securities. 5.   “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.

 

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6.           “Avoidance Actions”    means all Causes of Action of the Estates
that arise under chapter 5 of the Bankruptcy Code. 7.   “Backstop Commitment”   
means the Backstop Investors’ commitment to purchase at the Purchase Price Per
Share all New Common Shares to be issued by Reorganized Holdings pursuant to
Rights not exercised in the Rights Offering. 8.   “Backstop Commitment
Agreement”    means the agreement among the Backstop Investors and the Debtors,
dated as of May 14, 2010, pursuant to which the Backstop Investors agreed to
provide the Backstop Commitment. 9.   “Backstop Exchange”    shall have the
meaning set forth in Section 6.7 hereof. 10.   “Backstop Investors”    means the
Noteholder signatories to the Backstop Commitment Agreement. 11.   “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. 12.   “Bankruptcy Court”    means the United States Bankruptcy Court
for the District of Delaware, or such other court having jurisdiction over the
Chapter 11 Cases. 13.   “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. 14.   “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. 15.   “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. 16.   “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.

 

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17.           “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. 18.   “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. 19.   “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. 20.   “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. 21.   “Claims Agent”    means the entity
designated by order of the Bankruptcy Court to process proofs of claim. 22.  
“Claims Adjustment Amount”    means the excess amount, if any by which Allowed
and unpaid filed and scheduled (excluding Disallowed Claims) Priority Claims
(Class 1), Secured Claims (Class 2) and General Unsecured Claims (Class 3)
exceed $22,500,000 in the aggregate. 23.   “Class 5 Notes”    means the Senior
Notes and the GSI UK Note. 24.   “Class 6A Claims and Interests”    means
Holdings Equity Interests and Section 510(b) Claims, collectively.

 

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25.           “Class 6A Reserve”    shall have the meaning set forth in Section
3.9 hereof. 26.   “Committee”    means any official committee appointed in the
Chapter 11 Cases. 27.   “Confirmation Date”    means the date on which the Clerk
of the Bankruptcy Court enters the Confirmation Order on the docket of the
Bankruptcy Court. 28.   “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. 29.   “Confirmation Order”    means the order of the
Bankruptcy Court confirming the Plan. 30.   “Consensual Board Member”    shall
have the meaning set forth in Section 6.14 hereof. 31.   “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 and with respect to Restricted Shares,
Schedule 6.16(b) or if at such time there is an objection pending to the
allowance thereof.

 

4

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32.           “Contingent Excess Cash”    means, for every dollar of Claims
Adjustment Amount, Cash to be paid to the holders of Allowed Senior Note Claims
and Allowed GSI UK Note Claims in accordance with the distribution provisions of
the Plan in an amount equal to one cent per each one percent of ownership of New
Common Shares held by holders of Allowed Senior Note Claims and Allowed GSI UK
Note Claims on account of such Claims after giving effect to the Rights
Offering, Supplemental Note Exchanges, New Equity Awards and the Management
Incentive Plan but without giving effect to the New Common Shares issued
pursuant to the Backstop Commitment. 33.   “Debtor”    means any of Holdings and
its direct and indirect Subsidiaries that are debtors in the Chapter 11 Cases,
including GSI and MES. 34.   “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. 35.   “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. 36.   “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. 37.   “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.

 

5

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38.           “Effective Date”    means the first Business Day after all of the
conditions specified in Section 9.2 have been satisfied or waived (to the extent
waivable) on which the Plan shall be substantially consummated (provided,
however, that substantial consummation shall be deemed to have occurred no later
than the receipt of distributions provided by the Senior Noteholders as set
forth in Section 3.5(i) - (vii) hereof). 39.   “Equity Committee”    means the
statutory committee of equity security holders appointed in the Chapter 11 Cases
on December 22, 2009. 40.   “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. 41.   “Escrow Agent”    shall mean the Escrow Agent as set forth
in the Escrow Agreement. 42.   “Escrow Agreement”    shall mean an escrow
agreement by and among Reorganized Holdings on the account of holders of Section
510(b) Claims and the Escrow Agent, substantially in the form filed with the
Bankruptcy Court as a Plan Supplement. 43.   “Estate”    means the estate of any
Debtor created by section 541 of the Bankruptcy Code upon the commencement of
the Chapter 11 Cases. 44.   “Exchange Act”    means the Securities Exchange Act
of 1934, as amended and the rules and regulations of the Security and Exchange
Commission promulgated thereunder. 45.   “Face Amount Minimum”    shall have the
meaning ascribed to it in Section 7.8(b) hereof. 46.   “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).

 

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47.           “Fee Claim”    means a Claim of a Professional Person. 48.  
“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. 49.   “Fractional Distribution”    has the meaning set forth in Section
6.16(a) hereof. 50.   “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. 51.   “GSI”    means GSI
Group Corporation, a Michigan corporation 52.   “GSI Limited Holdings”    means
GSI Limited Holdings Corporation, a company organized under the laws of the
Province of New Brunswick, Canada, which on the Effective Date will become a
direct wholly-owned subsidiary of Holdings. 53.   “GSI Limited Holdings II”   
means GSI Limited Holdings II Corporation, a company organized under the laws of
the Province of New Brunswick, Canada, which on the Effective Date will become a
direct wholly-owned subsidiary of GSI Limited Holdings. 54.   “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. 55.   “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.

 

7

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56.           “GSI UK Note Claim”    means the Claim against a Debtor arising
pursuant to the GSI UK Note. 57.   “GSI UK Shares”    means all of the issued
and outstanding shares of capital stock of GSI UK. 58.   “Guarantee Claim”   
means a Claim against a Debtor arising pursuant to a guarantee of the
obligations of any Obligor Debtor valid under applicable law. 59.   “Guarantor
Debtor”    means a Debtor that has guaranteed the obligations of any Obligor
Debtor. 60.   “Holdings Common Shares”    means common shares of Holdings, no
par value. 61.   “Holdings Equity Interest”    means an Equity Interest in
Holdings, including any such Equity Interest that is exercised or earned and
vested as of the Effective Date (including any such Equity Interests that
becomes vested by way of acceleration on the Effective Date pursuant to its
terms), but excluding any such Equity Interest that is unexercised or unvested
as of the Effective Date (which shall include treasury stock and all options,
warrants, calls, rights, participation rights, puts, awards, commitments,
Shareholder Rights (including any Shareholder Right not yet exercisable pursuant
to the Shareholder Rights Plan) or any other agreements of any character to
acquire such Equity Interest). 62.   “Holdings”    means GSI Group Inc., a
company continuing to be organized under the laws of the Province of New
Brunswick, Canada. 63.   “Indenture Trustee”    means the indenture trustee
under the New Indenture 64.   “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. 65.   “Integral
Multiples”    shall have the meaning ascribed to it in Section 7.8(b) hereof.
66.   “Intercompany Claim”    means a Claim held by any Debtor or any wholly
owned Subsidiary of any Debtor against any 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.

 

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67.           “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. 68.   “IRS”    means the United States Internal Revenue
Service. 69.   “Management Incentive Plan”    means the management incentive
plan contemplated by Section 6.16(b) hereof. 70.   “MES”    means MES
International, Inc., a Delaware corporation and a wholly owned subsidiary of
MicroE Systems, Inc., a wholly owned subsidiary of GSI. 71.   “New Common
Shares”    means common shares of Reorganized Holdings. 72.   “New Equity
Awards”    means New Options and New Restricted Shares 73.   “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 on May 14, 2010 as a Plan Document. 74.   “New Options”    has
the meaning set forth in Section 6.16(a) hereof. 75.   “New Restricted Shares”
   has the meaning set forth in Section 6.16(a) hereof. 76.   “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. The
principal amount of the New Senior Secured Notes shall be $230 million less the
sum of (i) the Notes Payment plus (ii) the aggregate face amount of Senior Note
Claims exchanged for New Common Shares pursuant to the Note Exchanges. 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.

 

9

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77.           “NH Legal Counsel”    has the meaning set forth in Section 6(a) of
the Plan Support Agreement. 78.   “NH Professionals”    means, collectively, NH
Legal Counsel and Houlihan Lokey Howard & Zukin Capital, Inc. 79.   “Note
Claims”    means the Senior Note Claims and the GSI UK Note Claims. 80.  
“Noteholders”    means the holders of the Senior Notes who execute the Plan
Support Agreement. 81.   “Note Exchanges”    means the exchange of Senior Notes
for New Common Shares at the Purchase Price Per Share pursuant to the Backstop
Exchange and the Supplemental Equity Exchange. 82.   “Noteholder Observer
Parties”    shall have the meaning set forth in Section 6.14(a) hereof. 83.  
“Notes Payment”    means a Cash payment or payments (a) to holders of Allowed
Note Claims in the aggregate amount of $10,952,381 plus (b) to holders of
Allowed Senior Notes Claims, the Rights Offering Proceeds plus (c) to the holder
of the GSI UK Note Claim, the product of the aggregate amount of Rights Offering
Proceeds times the proportion of the principal amount of the GSI UK Note ($20
million) to the original principal amount of the Senior Notes ($210 million).
84.   “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. 85.   “Objection Deadline”    means the
deadline for filing objections to Claims as set forth in Section 8.1 of the
Plan. 86.   “Obligor Debtor”    means any Debtor that is the primary obligor of
any obligations guaranteed by another Debtor.

 

10

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87.           “Old Equity Awards”    means Old Options and Old Restricted
Shares. 88.   “Old Options”    has the meaning set forth in Section 6.16(a)
hereof. 89.   “Old Restricted Shares”    has the meaning set forth in Section
6.16(a) hereof. 90.   “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. 91.   “Petition Date”    means, with
respect to any Debtor, the date on which the Chapter 11 Case of such Debtor was
commenced. 92.   “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. 93.   “Plan Distribution Date”    means
(a) with respect to any Claim (other than a Senior Note 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, (b) with respect to any Equity Interest, the
Effective Date or a date that is as soon as reasonably practicable after the
Effective Date and (c) with respect to the Senior Note Claims, the Effective
Date or such other date after the Effective Date that is agreed to in writing
with the Required Noteholders. 94.   “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. 95.   “Plan Distribution Record Date”    means (a) with
respect to any Claim, the Confirmation Date, (b) with respect to any Equity
Interest, the Effective Date, and (c) with respect to the Senior Note Claims,
the Subscription Expiration Date as set forth in the Rights Offering Documents.

 

11

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96.           “Plan Distribution Rights”    means the rights that are part of
the plan distribution to holders of Allowed Class 6A Claims and Interests who
hold Holdings Common Shares on the Plan Distribution Record Date (excluding
Holdings Common Shares that have not vested as of the Rights Offering
Commencement Date), to be issued and, to the extent such holder so elects,
exercised on the Plan Distribution Date. 97.   “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, which shall
be in form and substance reasonably acceptable to the Debtors, the Required
Noteholders and, except with respect to the Backstop Commitment Agreement, the
Equity Committee. 98.   “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 Interests thereunder
(including without limitation the Plan Documents). 99.   “Plan Support
Agreement”    means that certain restructuring plan support agreement, by and
among the Debtors, the Equity Committee and each of the Noteholders dated as of
May 14, 2010. The Plan Support Agreement will be filed with the Bankruptcy Court
as a Plan Document. 100.   “Post-Effective Date Fully Diluted Capital Stock of
Reorganized Holdings”    means the total number of New Common Shares issued
pursuant to this Plan, including the Rights Offering and Note Exchanges, and all
New Common Shares issuable upon exercise or vesting of New Equity Awards or in
connection with any management incentive plan. 101.   “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.

 

12

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102.       “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, General Unsecured Claims and Note 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.

 

13

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103.       “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. 104.  
“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. 105.   “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 and shall not include NH Professionals. 106.  
“Purchase Price Per Share”    means the price of $1.80 per share. 107.  
“Registration Rights Agreement”    means Registration Rights Agreement by and
between Reorganized Holdings and the Backstop Investors, pursuant to which the
Backstop Investors would have the right to require Reorganized Holdings to
effect registered secondary offerings of the New Common Shares on terms and
conditions to be negotiated and reflected in such Registration Rights Agreement
which shall be in form and substance reasonably acceptable to the Required
Noteholders, provided there shall be no more than two demand resale shelf
registrations. The Registration Rights Agreement will be filed with the
Bankruptcy Court as a Plan Document. 108.   “Reinstated” or “Reinstatement”   

means rendering a Claim unimpaired within the meaning of section 1124 of the
Bankruptcy Code. Unless the Plan specifies a particular method of Reinstatement,
when the Plan provides that an Allowed Claim will be Reinstated, such Claim will
be Reinstated, at the applicable Reorganized Debtor’s sole discretion, in
accordance with one of the following:.

 

a) The legal, equitable and contractual rights to which such Claim entitles the
holder will be unaltered; or

 

14

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b) Notwithstanding any contractual provisions or applicable law that entitles
the holder of such Claim to demand or receive accelerated payment of such Claim
after the occurrence of a default:

 

i. any such default that occurred before or after the commencement of the
applicable Chapter 11 Case, other than a default of a kind specified in
section 365(b)(2) of the Bankruptcy Code, will be cured;

 

ii. the maturity of such Claim as such maturity existed before such default will
be reinstated;

 

iii. the holder of such Claim will be compensated for any damages incurred as a
result of any reasonable reliance by such holder on such contractual provision
or such applicable law;

 

iv. if such Claim arises from any failure to perform a nonmonetary obligation,
other than a default arising from failure to operate a nonresidential real
property lease subject to section 365(b)(1)(A) of the Bankruptcy Code, the
holder of such Claim will be compensated for any actual pecuniary loss incurred
by such holder as a result of such failure; and

 

v. the legal, equitable or contractual rights to which such Claim entitles the
holder of such Claim will not otherwise be altered.

109.       “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

 

15

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     boards of directors as to the transactions effectuated by this Plan) and
other professionals, in each case in their capacity as such; provided, that if
the Bankruptcy Court requires the Debtors to re-solicit approval of the Plan
pursuant to Section 1125 of the Bankruptcy Code, then “Released Parties” shall
also include the Equity Committee and its members, and with respect to each of
the foregoing entities, 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 and other professionals,
in each case in their capacity as such. 110.       “Reorganized GSI Entities”   
means Reorganized Holdings, together with its affiliated Debtors as reorganized.
111.   “Reorganized GSI”    means GSI, on or after the Effective Date. 112.  
“Reorganized Holdings”    means Holdings, on or after the Effective Date, to be
renamed Excel Technology, Inc. as of the Effective Date. 113.   “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.
114.   “Reorganized MES”    means MES, on or after the Effective Date. 115.  
“Required Noteholders”    has the meaning set forth in the Plan Support
Agreement. 116.   “Restricted Shares”    means common shares of Holdings which
pursuant to the awards for such shares are subject to vesting. 117.   “Rights”
   means the non-transferable entitlement to elect to subscribe for New Common
Shares upon the exercise of Plan Distribution Rights, which such election to so
exercise by the applicable holder must be made on or prior to the Subscription
Expiration Date.

 

16

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118.       “Rights Offering”    means the subscription election procedure for
the exercise of the Plan Distribution Rights in the Rights Offering Amount to
holders of Holdings Common Shares, as described in the Rights Offering Packet,
provided that each applicable holder will be entitled to participate at the
Rights Offering at the Pro Rata Rights Offering Percentage. 119.   “Rights
Offering Amount”    means $85 million. 120.   “Rights Offering Commencement
Date”    means the date upon which certain Rights Offering Documents are mailed
or otherwise submitted or provided to holders of outstanding and vested but not
yet issued Holdings Common Shares, and such date will also be the start of the
subscription election period for the Rights Offering. 121.   “Rights Offering
Disclosure”    has the meaning set forth in the Plan Support Agreement. 122.  
“Rights Offering Documents”    means the documents effectuating the Rights
Offering and Backstop Commitment. 123.   “Rights Offering Percentage”    means
the percentage calculated by dividing (a) the Rights Offering Amount divided by
the Purchase Price Per Share by (b) the number of shares outstanding immediately
preceding the Effective Date (excluding treasury stock and Holdings Common
Shares that had not vested as of the Rights Offering Commencement Date). 124.  
“Rights Offering Procedures”    means the document setting forth the procedures
for participating in the Rights Offering, as included in the Rights Offering
Packet. 125.   “Rights Offering Packet”    means certain documents relating to
the Rights Offering, including the Rights Offering Disclosure, Rights Offering
Procedures, the subscription forms related to the Rights and instructions to the
subscription forms, which packet shall be included as a Plan Document in Exhibit
B hereto. 126.   “Rights Offering Proceeds”    means all Cash proceeds from the
Rights Offering.

 

17

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127.       “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. 128.   “Section 510(b) Claim”    shall mean any Claim
subordinated pursuant to section 510(b) of the Bankruptcy Code arising from the
rescission of a purchase or sale of any Holdings Equity Interest or rights
relating to any Holdings Equity Interest, or any Claim for damages arising from
the purchase or sale of any Holdings 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, including, for the
avoidance of doubt, any Claims arising from the Securities Class Action. 129.  
“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.

 

18

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130.       “Securities Act”    means the Securities Act of 1933, as amended and
the rules and regulations of the Security and Exchange Commission promulgated
thereunder. 131.   “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. 132.   “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. 133.   “Security Documents”    means (a)
the Security Agreement, (b) all other security agreements, pledge agreements,
collateral assignments, mortgages, deeds of trust, title policies, 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 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, and (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.

 

19

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134.       “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. 135.   “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. 136.  
“Senior Notes Indenture”    means that certain Indenture, by and among GSI,
Holdings and Excel Technology, Inc. (f/k/a Eagle Acquisition Corporation), as
guarantors and The Bank of New York Mellon Trust Company, N.A., as trustee,
dated as of August 20, 2008, relating to those certain 11% Senior Subordinated
Notes due 2013 issued by GSI, 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. 137.   “Shareholder Rights”
   means the rights issued under the Shareholder Rights Plan. 138.  
“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. 139.   “Subordinated Claim”    means a Claim (other
than a Note Claim) against any Debtor subordinated by a Final Order. 140.  
“Subsidiary”    means any entity of which Holdings owns directly or indirectly
more than fifty percent (50%) of the outstanding capital stock or membership
interests. 141.   “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), MicroE Systems Corp., Reorganized MES, The Optical
Corp., Photo Research, Inc., Quantronix Corp. and Synrad, Inc.

 

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142.       “Subscription Expiration Date”    means the Business Day reasonably
determined by Holdings, in consultation with the Backstop Investors, on which
the subscription election period for the Rights Offering shall expire, which
date shall be no earlier than 20 Business Days after the Rights Offering
Commencement Date. 143.   “Supplemental Equity Exchange”    means, after giving
effect to the Notes Payment, the exchange of the face amount of $5,476,190 of
Class 5 Notes, respectively, for New Common Shares at the Purchase Price Per
Share. 144.   “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.

 

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EXHIBIT “B”

PLAN DOCUMENTS

Articles of Reorganization of Reorganized Holdings

Plan Support Agreement

Backstop Commitment Agreement

Registration Rights Agreement

Escrow Agreement

New Indenture and New Senior Secured Notes

Security Agreement

Rights Offering Escrow Agreement

Rights Offering Packet

Schedule 6.16(a): Schedule of Unvested Restricted Stock and Unexercised Options
and The Vesting Provisions Thereof

Schedule 6.16(b): Schedule of Vested Restricted Stock and The Vesting Provisions
Thereof

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Exhibit B

BACKSTOP COMMITMENT AGREEMENT

(See attached.)

 

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