INDEMNIFICATION  AGREEMENT

     This  Agreement (the "Agreement") made and entered into as of July 7, 2004,
(the  "Effective  Date"),  by  and  between  The  GSI  Group,  Inc,  a  Delaware
corporation  (the  "Company"),  and  Ann  Montgomery  ("Indemnitee"):

     Competent  and  experienced persons are becoming more reluctant to serve as
directors  and  officers  of corporations unless they are provided with adequate
protection,  generally through insurance and indemnification, against claims and
actions  against  them  for their activities on behalf or at the request of such
corporations;  and

     Uncertainties in the interpretations of the statutes, regulations, laws and
public  policies relating to indemnification of corporate directors and officers
are  such  as  to  make  an  adequate  and  reliable assessment of the risks and
potential liabilities to which directors and officers of corporations may become
personally  exposed  difficult,  particularly  in  light of the proliferation of
lawsuits  against  directors and officers in connection with their activities in
such  capacity  and  by  reason  of  their  status  as  such;  and

     The  Company,  based  upon  its business experience, has concluded that the
continuation  of  present  trends  in litigation against corporate directors and
officers  will  inevitably make it more difficult for the Company to attract and
retain  directors  and officers of the highest degree of competence committed to
the  active  and effective direction and supervision of the business and affairs
of the Company, and its subsidiaries and affiliates and the operation of its and
their  facilities;  and

     The  Company  deems  these  consequences  to  be so detrimental to the best
interests  of  the Company's shareholders that it has concluded that the Company
should  act  to  provide  its  directors  and  officers with enhanced protection
against  the  inordinate  risks  attendant on their positions in order to assure
that  the  most  capable  persons otherwise available will be attracted to these
positions  and,  in  this  connection, the Board of Directors of the Company has
further  concluded that it is not only reasonable and prudent but also necessary
for  the  Company  to  contractually obligate itself to indemnify to the fullest
extent permitted by applicable law its directors and officers, and to assume, to
the  maximum  extent  permitted  by applicable law, financial responsibility for
expenses  and  liabilities  which  might  be  incurred  by  such  individuals in
connection  with  claims  lodged against them for their decisions and actions in
such  capacity;  and

     Title  8 of the Corporation Act of the State of Delaware ("Title 8"), under
which law the Company is organized, empowers a corporation organized in Delaware
to  indemnify  persons  who serve as directors, officers, employees or agents of
the  corporation  or  persons  who  serve  at  the request of the corporation as
directors,  officers,  employees  or agents of another corporation, partnership,
joint  venture,  employee  benefit  plan,  trust  or  other  enterprise;  and

     The  Bylaws  and  the  Articles  of  Incorporation  of  the  Company permit
indemnification  in accordance with and to the full extent permitted by the laws
of  the  State  of  Delaware;  and
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     The  Company has (i) reviewed the type of insurance available to insure the
directors  and  officers  of  the Company and of its subsidiaries and affiliates
against  costs,  expenses  (including  attorneys'  fees  and  disbursements),
judgments,  penalties,  fines  and  amounts  paid  in  settlement  actually  and
reasonably incurred by them in connection with any action, suit or proceeding to
which  they are, or are threatened to be made a party by reason of their status,
decisions  or  actions  in such positions, (ii) studied the nature and extent of
the  coverage provided by insurance and the cost to the Company, (iii) concluded
that  it  would be in the best interests of the Company and its shareholders for
the Company to enter into agreements to indemnify certain persons in the form of
this  Agreement;  and

     The  Company  desires  to have Indemnitee serve as a director or officer of
the  Company,  its  subsidiaries  or  affiliates,  free  from  undue concern for
unpredictable,  inappropriate  or  unreasonable  claims for damages by reason of
Indemnitee  such  service;  and

     Indemnitee  is  willing  to  continue  to  serve  the  Company  in  the
above-mentioned  capacity  on  the  condition  that Indemnitee be indemnified as
provided  for  herein.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth  below  and  based  on  the  premises  set  forth  above,  the Company and
Indemnitee  covenant  and  agree  as  follows:

     Section  1.  Services  by  Indemnitee.  Indemnitee  agrees  to  serve  as a
director  or  officer  of  the  Company,  or  at the request of the Company as a
director  or  officer  of  its  subsidiaries or affiliates or as a member of any
committee  of  any  such board of directors.  Indemnitee may at any time and for
any  reason  resign  from  any  such  position (subject to any other contractual
obligation  or  any  obligation imposed by operation of law), in which event the
Company  shall have no obligation under this Agreement to continue Indemnitee in
such  position  but  shall  continue  to  be  fully  obligated  hereunder.

     Section  2.  Indemnification-General.  The  Company  shall  indemnify,  and
advance Expenses (as defined below), to Indemnitee as provided in this Agreement
and  to  the fullest extent permitted by applicable law in effect on the date of
this  Agreement  and to any greater extent that applicable law may in the future
from  time to time permit. The rights of Indemnitee provided under the preceding
sentence shall include, but shall not be limited to, the rights set forth in the
other  Sections  of  this  Agreement.

     Section  3.  Indemnification for Proceedings.  Indemnitee shall be entitled
to  the  rights  of  indemnification  provided in this Section 3 if by reason of
Indemnitee's  Corporate  Status  (as  defined  below), Indemnitee was, is, or is
threatened  to  be  made,  a named defendant or respondent to any Proceeding (as
defined  below),  including  to  the  extent  any  such  Proceeding involves the
negligence  of  Indemnitee.  Pursuant  to  this  Section  3, Indemnitee shall be
indemnified  against  judgments, penalties (including excise and similar taxes),
fines,  amounts  paid in settlement and reasonable Expenses actually incurred by
Indemnitee (including, without limitation, those incurred on Indemnitee's behalf
in  connection  with such Proceeding or any claim, issue or matter in it, if the
Company  fails to demonstrate by a preponderance of the evidence that Indemnitee
did not (a) conduct himself or herself in good faith, (b) reasonably believe (i)
in the case of conduct in Indemnitee's Official Capacity (as defined below) that
Indemnitee's  conduct  was in the Company's best interests and (ii) in all other
cases,  that Indemnitee's conduct was at least not opposed to the best interests
of  the Company, and (c) in the case of any criminal Proceeding, have reasonable
cause  to  believe  Indemnitee's  conduct  was  unlawful.
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     Section  4.  Limitation on Indemnification.  Proceedings by or in Behalf of
the  Company.  Notwithstanding the provisions of Section 3 above, unless (and to
the extent) permitted by then applicable law, if, in a Proceeding, Indemnitee is
found  liable  to the Company, its subsidiaries or affiliates or is found liable
on  the  basis  that personal benefit was improperly received by Indemnitee, the
rights  of  indemnification provided in Section 3 shall be limited to reasonable
Expenses  actually  incurred by Indemnitee in connection with the Proceeding and
shall  not  be  made in respect of any Proceeding in which Indemnitee shall have
been  found  liable  for willful or intentional misconduct in the performance of
Indemnitee's  duty  to  the  Company,  its  subsidiaries  or  affiliates.

     Section  5.  Court  Ordered Indemnification. Notwithstanding the provisions
of  Section  3  and Section 4 above, Indemnitee may apply for indemnification to
any  court  of  competent  jurisdiction  and  if,  upon  application,  the court
determines,  after  giving  any  notice  the  court  considers  necessary,  that
Indemnitee  is  fairly and reasonably entitled to indemnification in view of all
of  the  relevant  circumstances,  whether  or  not  Indemnitee  has  met  the
requirements  set  forth  in  Section 3 above or has been adjudged liable in the
circumstances  described  in  Section  4  above,  the  court  may  order  the
indemnification  that  the  court determines is proper and equitable.  The court
shall,  however,  limit  indemnification  to reasonable Expenses incurred by the
Indemnitee if the Indemnitee is found liable to the Company, its subsidiaries or
affiliates  or  if Indemnitee is found liable on the basis that personal benefit
was  improperly received by him or her, whether or not the benefit resulted from
an  action  taken  in  Indemnitee's  Official  Capacity.

     Section  6.  Indemnification  for  Expenses  of  a Party Who is Successful.
Without  limiting  the  effect  of  any  other  provision  of this Agreement, if
Indemnitee  is, by reason of Indemnitee's Corporate Status, a named defendant or
respondent in a Proceeding and is wholly successful, on the merits or otherwise,
in any Proceeding, Indemnitee shall be indemnified against all Expenses actually
incurred  by  Indemnitee  (including  without  limitation,  those  incurred  on
Indemnitee's  behalf) in connection with the Proceeding. To the extent permitted
by  then  applicable law, if Indemnitee is not wholly successful in a Proceeding
but is wholly successful, on the merits or otherwise, as to one or more but less
than  all  claims,  issues  or  matters  in  such  Proceeding, the Company shall
indemnify  Indemnitee against all Expenses actually incurred by Indemnitee or on
Indemnitee's  behalf  in connection with each successfully resolved claim, issue
or matter.  For purposes of this Section and without limitation, the termination
of any claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice,  shall  be  deemed  to be a wholly successful result as to the claim,
issue  or  matter.

     Section  7.  Indemnification for Expenses of a Witness. Notwithstanding any
other  provision  of  this  Agreement,  the  Company shall pay and reimburse all
Expenses  incurred by Indemnitee in connection with Indemnitee's appearance as a
witness  or other participation in a Proceeding at a time when Indemnitee is not
a  named  defendant  or  respondent  in  the  Proceeding.
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     Section  8.  Advancement  of  Expenses.  The  Company  shall  advance  all
reasonable  Expenses  incurred  by or on behalf of Indemnitee in connection with
any  Proceeding  within  ten business days after the receipt by the Company of a
statement  or  statements from Indemnitee requesting an advance or advances from
time  to  time (or, in the event a determination of entitlement to an advance is
required  in  accordance  with  applicable  law  as  specified below, within ten
business  days  after  the  determination that such advancement is permissible),
whether prior to or after final disposition of the Proceeding. Each statement or
statements  shall  reasonably  evidence  the Expenses incurred by Indemnitee and
shall  include  or  be  preceded  or  accompanied  by  a  written affirmation by
Indemnitee  of  Indemnitee's  good  faith  belief  that  Indemnitee  has met the
standard  of  conduct  necessary  for indemnification under this Agreement and a
written undertaking by or on behalf of Indemnitee to repay any Expenses advanced
if  it  shall  ultimately  be  determined  that Indemnitee is not entitled to be
indemnified  against  the  Expenses. Each written undertaking to pay the amounts
advanced  must  be  an unlimited general obligation but need not be secured, and
shall  be  accepted  without  reference  to financial ability to make repayment.

     Section 9.  Interval Protection Against Premature Enforcement.  The Company
and  the  Indemnitee  agree  that  any  Interval  Protection  (as defined below)
provided  for  in  this  Section  9 is an Expense (as defined below). During the
interval  between  the  Company's  receipt  of  Indemnitee's  request  for
indemnification  and the latest to occur of (a) payment in full to Indemnitee of
the  indemnification to which Indemnitee is entitled, or (b) a determination (if
required)  pursuant  to  Section  10 or a final adjudication or conclusion of an
arbitration pursuant to Section 12 (if Indemnitee elects to seek an adjudication
or  arbitration) that Indemnitee is not entitled to indemnification, the Company
shall provide "Interval Protection" which, for purposes of this Agreement, shall
mean  the  taking  of  the  necessary  steps  (whether  or not the steps require
expenditures  to  be  made by the Company at that time) to stay, pending a final
determination of Indemnitee's entitlement to indemnification (and, if Indemnitee
is  so  entitled),  the payment, the execution, enforcement or collection of any
judgments,  penalties,  fines  or  any other amounts for which Indemnitee may be
liable  (and  as  to which Indemnitee has requested indemnification) in order to
avoid Indemnitee's being or becoming in default with respect to any amounts (the
necessary  steps  to include, but not be limited to, the procurement of a surety
bond to achieve a stay or the loan to Indemnitee of amounts necessary to satisfy
the  judgments,  penalties,  fines  or other amounts for which Indemnitee may be
liable  and  as  to  which  a stay of execution cannot be obtained, the Board of
Directors by its approval of the form of this Agreement having made the judgment
that,  in  general, the loan or similar assistance may reasonably be expected to
benefit  the  Company),  within three days after receipt of Indemnitee's written
request,  together  with  a written undertaking by Indemnitee to repay, no later
than  90  days following receipt of statement from the Company, amounts (if any)
expended  by  the Company for that purpose, if it is ultimately determined (in a
final  adjudication  or  conclusion of an arbitration pursuant to Section 12, if
Indemnitee  elects to seek such an adjudication or arbitration, and otherwise in
a  determination  (if  required)  pursuant to Section 10) that Indemnitee is not
entitled  to  be  indemnified  against  the judgments, penalties, fines or other
amounts,  provided  that  in  no  event  shall the Company pay the amount of any
judgment, penalty, fine or other amount except pursuant to Section 2, 3, 5 or 13
(if  applicable).

     Section 10.  Procedure for Determination of Entitlement to Indemnification.
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     (a)     To  obtain  indemnification  under this Agreement, Indemnitee shall
submit to the Company a written request, including documentation and information
which  is  reasonably  available  to  Indemnitee  and is reasonably necessary to
determine  whether and to what extent Indemnitee is entitled to indemnification.
The  General  Counsel  of  the  Company (or, if there is no General Counsel, the
Secretary  of  the  Company)  shall,  promptly  upon  receipt  of  a request for
indemnification,  advise  the  Board of Directors in writing that Indemnitee has
requested  indemnification.

     (b)     Upon  written request by Indemnitee for indemnification pursuant to
the  first sentence of Section 10(a), a determination, if required by applicable
law,  with  respect  to  Indemnitee's  entitlement shall be made in the specific
case:  (i)  if  a  Change  of Control (as defined below) shall have occurred, by
Independent  Counsel  (as  defined  below)  in a written opinion to the Board of
Directors,  a  copy of which shall be delivered to Indemnitee (unless Indemnitee
shall  request  that such determination be made by the Board of Directors or the
shareholders,  in  which  case  by the Board of Directors or shareholders in the
manner provided for in clause (ii)(A) or (C), as the case may be, or pursuant to
clause  (iii)  of  this Section 10(b)); or (ii) if a Change of Control shall not
have  occurred,  (A)  by  the  Board of Directors by a majority vote of a quorum
consisting of Disinterested Directors (as defined below), or, if a quorum is not
obtainable,  by  a  majority  vote  of  a  committee  of the Board of Directors,
designated  to act in the matter by a majority vote of all directors, consisting
solely of two or more Disinterested Directors or (B) if a quorum of the Board of
Directors  consisting  of  Disinterested Directors is not obtainable or, even if
obtainable, if such quorum of Disinterested Directors so directs, by Independent
Counsel in a written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee or (C) if requested by Indemnitee by the shareholders of
the  Company  in a vote that excludes the shares held by directors who are named
defendants  or  respondents  in  the Proceeding; or (iii) as provided in Section
11(b) of this Agreement; and, if it is so determined that Indemnitee is entitled
to  indemnification,  payment  to Indemnitee shall be made within ten days after
such  determination.  Indemnitee  shall  cooperate  with  the person, persons or
entity  making  the  determination  with  respect to Indemnitee's entitlement to
indemnification,  including  providing  to  such  person, persons or entity upon
reasonable  advance  request  any  documentation  or  information  which  is not
privileged  or  otherwise  protected  from  disclosure  and  which is reasonably
available to Indemnitee and reasonably necessary to the determination. Any costs
or expenses (including attorneys' fees and disbursements) incurred by Indemnitee
in  so  cooperating  with the person, persons or entity making the determination
shall  be  borne  by  the  Company  (irrespective  of  the  determination  as to
Indemnitee's  entitlement  to  indemnification)  and the Company indemnifies and
agrees  to  hold  Indemnitee  harmless  from  them.
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     (c)     In the event the determination of entitlement to indemnification is
to  be  made  by  Independent Counsel pursuant to Section 10(b), the Independent
Counsel shall be selected as provided in this Section 10(c), and, if required by
then  applicable law, a determination as to the reasonableness of Expenses shall
be  made  by  the Board of Directors or a committee of the Board of Directors by
vote  in  the manner set forth in Section 10(b)(ii)(A), or if a quorum cannot be
obtained  and  a  committee  cannot  be  established,  by a majority vote of all
directors  of  the  Company. If a Change of Control shall not have occurred, the
Independent  Counsel  shall be selected by the Board of Directors or a committee
of  the  Board  of  Directors  by  vote  in  the  manner  set  forth  in Section
10(b)(ii)(A),  or  if  a  quorum  cannot  be  obtained and a committee cannot be
established, by a majority vote of all directors of the Company, and the Company
shall  give  written notice to Indemnitee advising Indemnitee of the identity of
the Independent Counsel so selected. If a Change of Control shall have occurred,
the  Independent  Counsel  shall  be  selected  by  the  Board of Directors or a
committee  of  the Board of Directors by vote in the manner set forth in Section
10(b)(ii)(A),  or  if such a quorum cannot be obtained and a committee cannot be
established,  by  a majority vote of all directors of the Company, which counsel
shall  be  selected from a list identifying two alternative separate Independent
Counsel  provided  in  writing by Indemnitee, and the Company shall give written
notice  to  Indemnitee  advising  Indemnitee  of the identity of the Independent
Counsel  so  selected.  In  either  event,  Indemnitee or the Company (as to the
written  list),  as the case may be, may, within seven days after written notice
shall  have been given, deliver to the Company or to Indemnitee, as the case may
be,  a written objection to the selection or list of Independent Counsel, as the
case  may  be.  The  objection  may  be  asserted  only  on  the ground that the
Independent  Counsel  so  selected  or  identified in the list does not meet the
requirements  "Independent  Counsel' as defined in Section 18 of this Agreement,
and  the  objection  shall set forth with particularity the factual basis of the
assertion.  If  written objection is made, the Independent Counsel so elected or
identified  in  the list may not serve as Independent Counsel unless and until a
court  has  determined  that the objection is without merit, and the Company and
Indemnitee,  as  the  case  may be, may at any time after receipt of the other's
written  objection  give  the  other  written  notice  of  the  selection  of an
alternative  Independent  Counsel or a list identifying two alternative separate
Independent  Counsel,  as  applicable,  and  the  procedure for objecting to the
Independent  Counsel  set  forth  above  shall again be followed (the "Selection
Process").  The  Selection  Process  shall  be  followed as many times as may be
necessary  until  Independent  Counsel  is  selected  without  objection.
Notwithstanding  the foregoing, if within 30 days after submission by Indemnitee
of  the  written  request  for  indemnification  pursuant  to  Section 10(a), no
Independent  Counsel  shall  have been selected or, if selected, shall have been
objected  to, either the Company or Indemnitee may petition a court of competent
jurisdiction  for  resolution of any objection which shall have been made by the
Company  to  the  list  provided by Indemnitee or by Indemnitee to the Company's
selection  of  Independent Counsel or for the appointment as Independent Counsel
of  a  person  selected  by the court or by such other person as the court shall
designate,  and  the  person with respect to whom an objection is so resolved or
the  person  so  appointed shall act as Independent Counsel under Section 10(b).
The  Company  shall  pay any and all reasonable fees and expenses of Independent
Counsel  incurred  by the Independent Counsel in connection with acting pursuant
to  Section  10(b),  and  the Company shall pay all reasonable fees and expenses
incident  to  the  procedures of this Section 10(c), regardless of the manner in
which  the  Independent  Counsel  was  selected  or  appointed.  Upon  the  due
commencement  of  any  judicial  proceeding  or  arbitration pursuant to Section
12(a)(iii)  of  this  Agreement,  Independent  Counsel  shall  be discharged and
relieved  of  any  further  responsibility  in  this  capacity  (subject  to the
applicable  standards  of  professional  conduct  then  prevailing).
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     Section  11.  Presumptions  and  Effect  of  Certain  Proceedings.

     (a)     In  making  a  determination  with  respect  to  entitlement  to
indemnification,  the person or persons or entity making the determination shall
presume  that  Indemnitee is entitled to indemnification under this Agreement if
Indemnitee  has  submitted  a  request  for  indemnification  in accordance with
Section  10(a) of this Agreement, and the Company shall have the burden of proof
to  overcome  that  presumption  in  connection  with  the making by any person,
persons  or  entity  of  any  determination  contrary  to  that  presumption.

     (b)     If  the  person,  persons  or  entity  empowered  or selected under
Section  10  of  this  Agreement  to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within 30 days after receipt
by  the  Company  of  the request, the requisite determination of entitlement to
indemnification  shall  be  deemed  to  have  been  made and Indemnitee shall be
entitled  to  indemnification,  absent  (i)  a  misstatement  by Indemnitee of a
material  fact, or an omission of a material fact necessary to make Indemnitee's
statement  not  materially  misleading,  in  connection  with  the  request  for
indemnification,  or (ii) a prohibition of indemnification under applicable law;
provided, however, that the 30-day period may be extended for a reasonable time,
not to exceed an additional 15 days, if the person, persons or entity making the
determination  with  respect  to  entitlement  to  indemnification in good faith
requires  the  additional  time for the obtaining or evaluating of documentation
and/or information; and provided, further, that the foregoing provisions of this
Section  11(b)  shall  not  apply  (i)  if  the  determination of entitlement to
indemnification  is  to be made by the stockholders pursuant to Section 10(b) of
this  Agreement  and  if  (A) within 15 days after receipt by the Company of the
request  for the determination the Board of Directors has resolved to submit the
determination  to  the shareholders for their consideration at an annual meeting
thereof to be held within 75 days after receipt and determination is made there,
or (B) a special meeting of stock holders is called within 15 days after receipt
for  the purpose of making a determination, the meeting is held for such purpose
within  60 days after having been so called and the determination is made there,
or  (ii) if the determination of entitlement to indemnification is to be made by
Independent  Counsel  pursuant  to  Section  10(b)  of  this  Agreement.

     (c)     The  termination of any Proceeding or of any claim, issue or matter
in  it,  by  judgment,  order,  settlement or conviction, or upon a plea of nolo
contendere  or its equivalent, shall not (except as otherwise expressly provided
in  this  Agreement) of itself be determinative that Indemnitee did not meet the
requirements  set  forth  in  Section 3. Indemnitee shall be deemed to have been
found  liable  in  respect  of  any claim, issue or matter only after Indemnitee
shall  have  been  so  adjudged  by  a  court  of  competent  jurisdiction after
exhaustion  of  all  appeals.
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     Section  12.  Remedies  of  Indemnitee.

     (a)     In  the  event that (i) a determination is made pursuant to Section
10  of  this  Agreement that Indemnitee is not entitled to indemnification under
this  Agreement,  (ii)  advancement  of  Expenses is not timely made pursuant to
Section  8  of  this  Agreement,  (iii)  the  determination  of  entitlement  to
indemnification  is  to be made by Independent Counsel pursuant to Section 11(b)
of  this  Agreement and the determination shall not have been made and delivered
in  a written opinion within 90 days after receipt by the Company of the request
for  indemnification, or (iv) payment of indemnification is not made pursuant to
Section  6  or  Section 7 of this Agreement within ten days after receipt by the
Company  of  a  written request for it, or (v) payment of indemnification is not
made  within  ten  days  after  a determination has been made that Indemnitee is
entitled  to  indemnification  or  the determination is deemed to have been made
pursuant  to  Section  10  or  Section 12 of this Agreement, Indemnitee shall be
entitled  to  an  adjudication  in  any  court  of  competent  jurisdiction  of
Indemnitee's  entitlement  to  indemnification  or  advancement  of  Expenses.
Alternatively,  Indemnitee,  at  Indemnitee's  option,  may  seek  an  award  in
arbitration  to be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association. Except for a proceeding seeking enforcement of
rights  under  Section  6,  Indemnitee shall commence such proceeding seeking an
adjudication  or  an  award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence the proceeding pursuant to this
Section  12(a).  The  Company  shall  not  oppose Indemnitee's right to seek any
adjudication  or  award  in  arbitration.

     (b)     In  the event that a determination shall have been made pursuant to
Section 10 of this Agreement that Indemnitee is not entitled to indemnification,
any  judicial  proceeding  or  arbitration commenced pursuant to this Section 12
shall  be  conducted  in all respects as a de novo trial, or arbitration, on the
merits  and  Indemnitee  shall  not  be  prejudiced  by  reason  of that adverse
determination.  In  any judicial proceeding or arbitration commenced pursuant to
this Section 12, the Company shall have the burden of proving that Indemnitee is
not  entitled to indemnification or advancement of Expenses, as the case may be.

(c)     If  a  determination  shall  have  been made or deemed to have been made
pursuant  to  Section  10  or  Section  11  of this Agreement that Indemnitee is
entitled  to indemnification, the Company shall be bound by the determination in
any  judicial  proceeding  or arbitration commenced pursuant to this Section 12,
absent  (i) a misstatement by Indemnitee of a material fact, or an omission of a
material  fact  necessary  to  make  Indemnitee's  statement  not  materially
misleading,  in  connection  with  the  request  for  indemnification, or (ii) a
prohibition  of  indemnification  under  applicable  law.

     (d)     The  Company  shall  be  precluded  from  asserting in any judicial
proceeding  or  arbitration  commenced  pursuant  to  this  Section  12 that the
procedures  and  presumptions  of  this  Agreement  are  not  valid, binding and
enforceable  and  shall stipulate in any court or before any arbitrator that the
Company  is  bound  by  all  the  provisions  of  this  Agreement.
                                        8
<PAGE>
     (e)     To  the  extent permitted by then applicable law, in the event that
Indemnitee, pursuant to this Section 12, seeks a judicial adjudication of, or an
award in arbitration to enforce Indemnitee's rights under, or to recover damages
for  breach  of, this Agreement, and unless there is a specific judicial finding
that  Indemnitee's  suit  was frivolous, Indemnitee shall be entitled to recover
from  the  Company, and shall be indemnified by the Company against, any and all
expenses  (of the types described in the definition of Expenses in Section 18 of
this  Agreement) actually and reasonably incurred by Indemnitee in such judicial
adjudication  or  arbitration.

     Section  13.  Nonexclusivity;  Survival  of Rights; Insurance; Subrogation.

     (a)     The  rights  of  indemnification  and  to  receive  advancement  of
Expenses  as  provided  by  this  Agreement shall not be deemed exclusive of any
other  rights  to  which Indemnitee may at any time be entitled under applicable
law,  the  Articles  of  Incorporation,  the  Bylaws,  any  agreement, a vote of
shareholders  or  a  resolution of directors, or otherwise. No amendment of this
Agreement  or  any provision shall be effective as to Indemnitee with respect to
any action taken or omitted by Indemnitee in Indemnitee's Corporate Status prior
to  amendment,  alteration  or  repeal.

     (b)     To  the  extent  that  the Company maintains an insurance policy or
policies  providing  liability  insurance  for  directors,  officers,  partners,
venturers,  employees,  agents  or  fiduciaries  of  the Company or of any other
corporation,  partnership,  joint venture, trust, employee benefit plan or other
enterprise  which  person serves at the request of the Company, Indemnitee shall
be  covered  by such policy or policies in accordance with its or their terms to
the  maximum  extent  of  the coverage available for any such director, officer,
partner,  venturer,  employee  or  agent  under  the  policy  or  policies.

     (c)     In the event of any payment under this Agreement, the Company shall
be  subrogated  to the extent of the payment to all of the rights of recovery of
Indemnitee,  who shall execute all papers required and take all action necessary
to  secure  the rights, including execution of documents necessary to enable the
Company  to  bring  suit  to  enforce  these  rights.

     (d)     The  Company  shall  not be liable under this Agreement to make any
payment  of amounts otherwise indemnifiable if and to the extent that Indemnitee
has  otherwise  actually  received  such  payment  under  any  insurance policy,
contract,  agreement  or  otherwise.

     Section  14.  Duration  of  Agreement.
                                        9
<PAGE>
     (a)     This  Agreement  shall  continue until and terminate upon the later
of:  (i)  the  tenth  anniversary  after  Indemnitee  has  ceased  to serve as a
director,  officer,  partner,  venturer,  employee,  agent  or  fiduciary of the
Company or of any other corporation, partnership, joint venture, trust, employee
benefit  plan  or other enterprise which Indemnitee served at the request of the
Company; or (ii) (A) the final termination or resolution of all Proceedings with
respect  to  Indemnitee  commenced  during the 10-year period and (B) either (x)
receipt  by Indemnitee of the indemnification to which Indemnitee is entitled or
(y)  a final adjudication or binding arbitration that Indemnitee is not entitled
to  any  further  indemnification,  as  the  case  may  be.

     (b)     This  Agreement shall be binding upon the parties and the Company's
successors  and  assigns  and  shall  inure  to  the benefit of the parties, the
Indemnitee's  heirs,  devises,  executors,  administrators  and  other  legal
representatives  and  the  Company's  successors  and  assigns.

     Section 15.  Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a)  the  validity,  legality  and enforceability of the remaining provisions of
this  Agreement  (including  without  limitation, each portion of any Section of
this  Agreement  containing  any  provision  held  to  be  invalid,  illegal  or
unenforceable,  that  is not itself invalid, illegal or unenforceable) shall not
in  any way be affected or impaired; and (b) to the fullest extent possible, the
provisions of this Agreement (including, without limitation, each portion of any
Section  of  this  Agreement  containing  any such provision held to be invalid,
illegal  or unenforceable, that is not itself invalid, illegal or unenforceable)
shall  be  construed  so  as  to  give  effect  to  the intent manifested by the
provision  held  invalid,  illegal  or  unenforceable.

     Section  16.  Identical  Counterpart. This Agreement may be executed in one
or  more  counterparts,  each of which shall for all purposes be deemed to be an
original  but all of which together shall constitute one and the same Agreement.
Only  one  such  counterpart  signed by the party against whom enforceability is
sought  needs  to  be  produced  to  evidence  the  existence of this Agreement.

     Section  17.  Headings.  The headings of the sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement  or  to  affect  the  construction  thereof.

     Section  18.  Definitions.  For  purposes  of  this  Agreement:
                                       10
<PAGE>
     (a)     "Change  of  Control"  means  a  change  in  control of the Company
occurring  after  the  Effective  Date  of a nature that would be required to be
reported  in  response  to  Item  6(e)  of Schedule 14A of Regulation 14A (or in
response  to any similar item on any similar schedule or form) promulgated under
the  Securities  Exchange Act of 1934 (the "Act"), whether or not the Company is
then  subject  to  such  reporting requirement; provided, however, that, without
limitation,  such  a Change in Control shall be deemed to have occurred if after
the  Effective Date (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under  the  Act),  directly  or  indirectly,  of  securities  of  the  Company
representing  25%  or  more  of  the combined voting power of the Company's then
outstanding  securities without the prior approval of at least two-thirds of the
members  of  the  Board of Directors in office immediately prior to such person'
attaining  such  percentage  interest;  (ii) the Company is a party to a merger,
consolidation,  sale of assets or other reorganization, or a proxy contest, as a
consequence  of  which  members  of the Board of Directors in office immediately
prior  to such transaction or event constitute less than a majority of the Board
of  Directors  thereafter;  or (iii) during any period of two consecutive years,
individuals  who  at  the  beginning  of  such  period  constituted the Board of
Directors cease for any reason to constitute at least a majority of the Board of
Directors.

     (b)     "Corporate Status" describes the status of a person who is or was a
director,  officer,  partner,  venturer,  employee,  agent  or  fiduciary of the
Company or of any other corporation, partnership, joint venture, trust, employee
benefit  plan  or  other  enterprise  (whether  conducted  for profit or not for
profit)  which  such  person  is  or  was serving at the request of the Company,
whether  before  or  after  the  Effective  Date.

     (c)     "Disinterested Director" means a director of the Company who at the
time  of  the vote is not a named defendant or respondent in the Proceeding with
respect  to  which  indemnification  is  being  requested.

(d)     "Expenses"  shall  include  all attorneys' fees, retainers, court costs,
transcript  costs,  fees  of experts, witness fees, travel expenses, duplicating
costs,  printing and binding costs, telephone charges, postage, delivery service
fees,  and  all  other  disbursements  or  expenses  incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating or being
or  preparing  to  be  a  witness  in  a  Proceeding.

     (e)     "Independent  Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and. neither currently is, nor
in  the  past  five  years has been, retained to represent: (i) the Company, any
affiliate  of  the  Company  or Indemnitee in any matter material to either such
party,  or  (ii)  any  other  party to the Proceeding giving rise to a claim for
indemnification  hereunder. Notwithstanding the foregoing, the term "Independent
Counsel"  shall  not  include  any person who, under the applicable standards of
professional  conduct  then  prevailing,  would  have  a conflict of interest in
representing  either  the  Company  or  Indemnitee  in  an  action  to determine
Indemnitee's  rights  under  this  Agreement.|

     (f)     "Official  Capacity"  means:

          (i)     when  used  with respect to a director, the office of director
in  the  Company,  and
                                       11
<PAGE>
          (ii)     when used with respect to a person other than a director, the
elective  or  appointed  office  in  the  Company  held  by  the  officer or the
employment  or agency relationship undertaken by the employee or agent in behalf
of  the  Company,  but

          (iii)     in  both clauses (i) and (ii) above does not include service
for any other foreign or domestic corporation or any partnership, joint venture,
sole  proprietorship,  trust,  employee  benefit  plan  or  other  enterprise.

(g)     "Proceeding"  includes any threatened, pending or completed action, suit
or  proceeding  including,  but  not  limited to, arbitration, alternate dispute
resolution  mechanism,  investigation,  administrative  hearing  or  any  other
proceeding,  whether  civil,  criminal,  administrative,  arbitrative  or
investigative,  any  appeal  in  any  of  the  foregoing  and  any  inquiry  or
investigation  that  could  lead  to  an  action,  suit or proceeding except one
initiated  by  an Indemnitee pursuant to Section 12 of this Agreement to enforce
Indemnitee's  rights  under  this  Agreement.

     Section  19.  Modification  and  Waiver.  No  supplement,  modification  or
amendment  of this Agreement shall be binding unless executed in writing by both
of  the  parties  hereto.  No  waiver of any of the provisions of this Agreement
shall  be  deemed  or  shall  constitute a waiver of any other provisions hereof
(whether  or  not similar) nor shall such waiver constitute a continuing waiver.

     Section  20.  Notice  by  Indemnitee.  Indemnitee agrees promptly to notify
the  Company  in writing upon being served with any summons, citation, subpoena,
complaint,  indictment, information or other document relating to any Proceeding
or  matter  which  may  be subject to indemnification or advancement of Expenses
covered  hereunder.

     Section  21.  Notices.  All  notices,  requests,  demands  and  other
communications  shall  be in writing and shall be deemed to have been duly given
if  (I)  delivered by hand and receipted for by the party to whom said notice or
other  communication  shall  have  been directed, or (ii) mailed by certified or
registered  mail  with postage prepaid, on the third business day after the date
on  which  it  is  so  mailed:

     (a)     If  to  Indemnitee,  at the address indicated on the signature page
hereof;  and

     (b)     If  to  the  Company:

          The  GSI  Group,  Inc.

          1004  East  Illinois  Street

          Assumption,  Illinois  62510

          Attention:  President

with  a  copy  to  the  attention  of  the  Secretary  at  such  address;  or
                                       12
<PAGE>
     (c)     To such other address as may have been furnished to either party by
the  other  party.

     Section 22.  Governing Law.  The parties agree that this Agreement shall be
governed  by,  and  construed  and  enforced in accordance with, the laws of the
State  of  Delaware.

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered on its behalf as of the date and year first above
written.

THE  GSI  GROUP,  INC.,  a  Delaware  corporation


By:  _________________________________
Its:  _________________________________





____________________________________
ANN  MONTGOMERY

977  EAST  1830  NORTH  ROAD
TAYLORVILLE,  IL  62568

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<PAGE>