Document:

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                                                                    EXHIBIT 4.10

                     SECURITY AGREEMENT RE: DEPOSIT ACCOUNT

        This Security Agreement Re: Deposit Account (the "Agreement") is made as
of this 30th day of April, 2002, between GSI Lumonics, Inc., a corporation
organized under the laws of New Brunswick (the "Guarantor"), with its chief
executive office and mailing address at 105 Schneider Road, Kanata, Ontario,
Canada and Bank of Montreal, a Canadian chartered bank ("BMO"), as
Administrative Agent (the "Administrative Agent"), with its mailing address at
115 South LaSalle Street, Chicago, Illinois 60603. Capitalized terms used herein
without definition shall have the meanings given such terms in the hereinafter
identified and defined Participation Agreement.

        GSI Lumonics Corporation, a Michigan corporation (the "Lessee") has
requested that the Administrative Agent and the Lenders and Lessors waive
certain defaults under that certain Participation Agreement dated as of June 23,
1998, as amended (the "Participation Agreement"), entered into by and among the
Lessee; the Guarantor; BMO, and the other various financial institutions as are
or may from time to time become lenders (the "Lenders") under the Loan
Agreement; the Administrative Agent; and BMO Global Capital Solutions, Inc.
(formerly known as BMO Leasing (U.S.), Inc.), a Delaware corporation, as Agent
Lessor and Arranger (in such capacity as the agent lessor, the "Agent Lessor"
and in such capacity as the arranger, the "Arranger") and the Administrative
Agent is willing to do so on the condition, among other things, grant to the
Administrative Agent for the benefit of the Lessors and Lenders a first priority
security interest in and lien on the Account referred to below as collateral
security for the obligations of the Lessee and the Guarantor under the Operative
Documents. Accordingly, as an inducement to the Administrative Agent, Lenders
and Lessors to waive certain defaults, and other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the Guarantor
hereby pledges, assigns and grants to the Administrative Agent for the benefit
of the Lessors and Lenders a continuing security interest in, and acknowledges
and agrees that the Administrative Agent has and shall continue to have a
continuing security interest in, all right, title and interest of the Guarantor
in and to the following described deposit account maintained by the Guarantor
with the financial institution named below, and all renewals and reinvestments
thereof, and all sums now or hereafter payable on the Account and all interest
accrued or payable thereon, and all proceeds of the foregoing, in each case
whether not existing or hereafter arising (hereinafter referred to collectively
as the "Account"):

        Identifying Number                                 Amount of Initial
        and Type of Account       Name of Institution      Deposit in Account

Deposit Account No. ________       Bank of Montreal         U.S. $18,925,000

        The lien and security interest herein granted and provided for is made
and given to secure, and shall secure, the payment and performance of (i) any
and all indebtedness, obligations and liabilities whatsoever of the Guarantor to
the Lenders and Lessors evidenced by or arising under or otherwise relating to
the Guaranty, or any other instrument or document executed and delivered in
connection therewith, in each case whether direct or indirect, absolute or
contingent, due or to become due, and whether now existing or hereafter arising,
(ii) any and

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all indebtedness, obligations and liabilities whatsoever of the Lessee evidenced
by or arising under or otherwise related to the Operative Documents in each case
whether direct or indirect, absolute or contingent, due or to become due, and
whether now existing or hereafter arising, and (iii) all expenses and charges,
legal or otherwise, suffered or incurred by the Administrative Agent in
collecting or enforcing any of such indebtedness, obligations or liabilities or
in realizing on or protecting or preserving any security therefor, including,
without limitation, the assignment and security interest granted hereby (all of
the indebtedness, obligations and liabilities hereinabove described being
referred to hereinafter as the "Obligations").

        The Guarantor hereby agrees no moneys at any time constituting part of
the Account may be withdrawn by the Guarantor, until the Obligations are paid in
full, notwithstanding any provisions to the contrary contained in any other
agreement between Guarantor and the financial institution maintaining the
Account; provided, however, that prior to the occurrence and continuation of a
default hereunder the Guarantor shall be entitled to all payments with respect
to interest on the Account which are made prior to such occurrence and
continuation.

        The Guarantor agrees to execute and deliver to the Administrative Agent
such further instruments and agreements, and do all such other things, as the
Administrative Agent may deem necessary or appropriate to assure the
Administrative Agent its security interest hereunder. Without limiting the
foregoing, the Guarantor agrees to promptly deliver to the Administrative Agent
all certificates, instruments and documents at any time evidencing the Account,
or any part thereof, and to deliver to the Administrative Agent any income,
dividends, distributions and rights with respect to the Account which may at any
time come into the possession of the Guarantor.

        The Guarantor represents and warrants to the Administrative Agent, the
Agent Lessor, the Lenders and the Lessors that:

                1.      The Guarantor has full right, power and authority to
        maintain the Account, to enter into this Agreement and perform its
        obligations hereunder; and this Agreement is the legal, valid and
        binding obligation of the Guarantor enforceable in accordance with its
        terms.

                2.      The Guarantor is and will be the sole and lawful legal
        and equitable owner of the Account free and clear of any security
        interest, lien, charge or encumbrance of any other person, except for
        the security interest to the Administrative Agent hereunder.

                3.      The amount of the Account as of the date hereof is the
        amount stated above.

                4.      The Account, if evidenced by a certificate of deposit,
        is negotiable, has been duly negotiated to the Administrative Agent, and
        is genuine and in all respects what it purports to be.

        In the event that any of the following shall occur (herein called
"default" or "defaults"):

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                (a)     default in the observance or performance of any other
        obligation of the Guarantor herein or in the Guaranty;

                (b)     the occurrence of any event or the existence of any
        condition which is specified as an Event of Default (as defined in the
        Participation Agreement);

then in any such event, subject to the terms of Article II of the Guaranty, the
Administrative Agent, in addition to exercising such other rights and remedies
as may be available to it, (i) may appropriate (by set-off or otherwise) the
Account and all sums now or hereafter payable on the Account and any interest
accrued or payable thereon and apply the same to the Obligations, or any part
thereof, in such order and manner as the Administrative Agent in its sole
discretion shall determine and/or (ii) may exercise with respect to the Account
and such sums and interest all the rights, options and remedies of a secured
party under the Uniform Commercial Code of Illinois in respect of the Account.
Without limiting the foregoing, the Guarantor agrees that the Administrative
Agent shall have full and irrevocable right, power and authority during the
existence of a default to liquidate the Account prior to its stated maturity, if
any, without thereby incurring any liability whatsoever to the Guarantor and, in
the name of the Guarantor or in the Administrative Agent's own name or both, to
demand, collect, withdraw, receipt for or sue for all amounts due or to become
due and payable in respect of the Account, to execute any withdrawal receipts
respecting the Account, to endorse the name of the Guarantor on any and all
commercial paper given in payment thereof, and to take any other action,
including, without limitation, transfer any certificate evidencing the Account
into the Administrative Agent's own name or the name of its nominee, which the
Administrative Agent deems necessary or appropriate to preserve or protect its
interest in the Account. All rights and remedies of the Administrative Agent
hereunder shall be in addition to and not in substitution for any right, power
or remedy it may have under applicable law or under any other agreement or
instrument now or hereafter executed and delivered by the Guarantor to or in
favor of the Administrative Agent.

        The proceeds from any sale or other realization of the Account may be
applied by the Administrative Agent to the Obligations (whether or not then due
and payable) in such manner and order as the Administrative Agent in its
discretion shall determine and any proceeds not so applied may be held by the
Administrative Agent under this Agreement as collateral security for the
Obligations. The Guarantor agrees to pay the Administrative Agent all costs and
expenses (including court costs and reasonable attorneys' fees) suffered or
incurred by the Administrative Agent in enforcing or endeavoring to enforce the
Obligations, or any part thereof, in protecting, defending, or enforcing any
rights and remedies with respect to the Account or any of Guarantor's
obligations hereunder, or in connection with any foreclosure or other
realization upon the Account or any part thereof (whether in any litigation,
bankruptcy, insolvency or other proceeding whatsoever), all of which shall
constitute Obligations secured by the Account hereunder. The Administrative
Agent shall have no responsibility for the collection or protection of the
Account or any part thereof or to exercise (or give notice to the Guarantor of)
any option, privilege or right with respect to the Account, all of which are
waived by the Guarantor. The Administrative Agent may without notice at any time
and from time to time at its option transfer or register all or any part of the
Account into its or its nominee's name without any indication of security
interest. The Administrative Agent may transfer the Obligations, or any part
thereof, and deliver the Account subject to this Agreement to the transferee,
and the transferee shall

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become vested with all powers and rights given to the Administrative Agent with
respect to the Account.

        The Guarantor acknowledges that the lien and security interest hereby
created and provided for are absolute and unconditional and shall not in any
manner be affected or impaired by any acts or omissions whatsoever of the
Administrative Agent, any Lender or Lessor, or any other holder of any of the
Obligations, and without limiting the generality of the foregoing, the lien and
security interest hereof shall not be impaired by any acceptance by the
Administrative Agent, any Lender or Lessor, or any other holder of any of the
Obligations of any other security for or guarantors upon any of the Obligations
or by any failure, neglect or omission on the part of the Administrative Agent
or any other holder of any of the Obligations to realize upon or protect any of
the Obligations or any collateral or security therefor. The lien and security
interest hereof shall not in any manner be impaired or affected by (and the
Administrative Agent, without notice to anyone, is hereby authorized to make
from time to time) any sale, pledge, surrender, compromise, settlement, release,
renewal, extension, indulgence, alteration, substitution, exchange, change in,
modification or disposition of any of the Obligations, or of any collateral or
security therefor, or of any guaranty thereof, or of any instrument or agreement
setting forth the terms and conditions pertaining to any of the foregoing. After
the occurrence of a default, in order to realize hereon and to exercise the
rights granted the Administrative Agent hereunder and under applicable law,
there shall be no obligation on the part of the Administrative Agent or any
other holder of any of the Obligations at any time to first resort for payment
to the Lessee or any guaranty of the Obligations or any portion thereof or to
resort to any other collateral, security, property, liens or any other rights or
remedies whatsoever, and the Administrative Agent shall have the right to
enforce this Agreement irrespective of whether or not other proceedings or steps
seeking resort to or realization upon or from any of the foregoing are pending.
The lien and security interest created and provided for stand as direct and
primary security for the Obligations of the Lessee as well as for the other
Obligations secured hereby. No application of any sums received by the
Administrative Agent in respect of the Account or any disposition thereof to the
reduction of the Obligations or any part thereof shall in any manner entitle the
Guarantor to any right, title or interest in or to the Obligations or any
collateral or security therefor, whether by subrogation or otherwise, unless and
until all Obligations and all indebtedness, obligations, and liabilities of the
Lessee owing to the Administrative Agent have been fully paid and satisfied and
all agreements of the Administrative Agent to extend credit to or for the
account of the Lessee have expired or otherwise have been terminated. The
Guarantor further acknowledges and agrees that the Administrative Agent may,
without the consent of or notice to the Guarantor, extend, review, modify,
substitute or replace the indebtedness, obligations and liabilities of the
Lessee owing to the Administrative Agent guaranteed by the Guarantor under the
Guaranty or otherwise, and increase or decrease the amount of the credit
extended to Lessee, and that the Administrative Agent's right to enforce its
rights under this Agreement shall not be impaired by any of the foregoing

        No waiver or modification or amendment to the terms of this Agreement
shall be effective as against the Administrative Agent unless the same is in
writing and signed by an officer of the Administrative Agent. No such waiver,
modification or amendment shall in any way affect any of the rights or remedies
of the Administrative Agent hereunder except to the extent that such waiver,
modification or amendment specifically provides.

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        This Agreement and the assignment and security interest granted
hereunder shall remain in full force and effect until the Obligations shall be
paid and satisfied in full and all agreements of the Administrative Agent to
extend credit to or for the account of the Lessee have expired or otherwise have
been terminated.

        The financial institution maintaining the Account shall be fully
protected in, and shall not in any way be liable to the Guarantor for, acting on
any order or direction of the Administrative Agent respecting the Account or any
interest therein without making any inquiry whatsoever as to the Administrative
Agent's right or authority to give such order or direction or as to the
application of any payment made pursuant thereto, and any payment in respect of
the Account made to the Administrative Agent pursuant to any such order or
direction shall satisfy and discharge any liability of the financial institution
maintaining the Account to the Guarantor to the extent of such payment.

        No delay by the Administrative Agent in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise by
the Administrative Agent of any right or remedy shall preclude any other or
further exercise thereof or the exercise of any other right or remedy. The
rights and remedies of the Administrative Agent hereunder are cumulative to, and
not exclusive of, any rights or remedies which it would otherwise have. The
covenants, warranties, and representations of the Guarantor herein shall be in
addition to and cumulative of all other covenants, representations, and
warranties of the Guarantor contained in, or provided for in, any other
instrument or document now or hereafter executed and delivered by the Guarantor
to or in favor of the Administrative Agent. This Agreement may be executed in
any number of counterparts, and by different parties hereto on different
counterpart signature pages, and all of such counterparts taken together shall
be deemed to constitute one and the same instrument. This Agreement shall be
binding upon the Guarantor, and its successors and assigns, and shall inure to
the benefit of the Administrative Agent, and its successors and assigns. It is
agreed that this Agreement and all the rights and remedies of the Administrative
Agent hereunder shall be construed in accordance with and governed by the laws
of Illinois. If any part of this Agreement is unenforceable, that will not make
any other part unenforceable.

        THE GUARANTOR SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS
STATE COURT SITTING IN COOK COUNTY, ILLINOIS, FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

        THE GUARANTOR AND THE ADMINISTRATIVE AGENT WAIVE ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                           [Signature Page to Follow]

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        In Witness Whereof, the Guarantor has executed this Agreement this 30th
day of April, 2002.

                                       GSI Lumonics, Inc.

                                       By: /s/ Thomas R. Swain
                                         Name:  Thomas R. Swain
                                         Title: V.P. & CFO

        Acknowledged and agreed to as of the day and year last above written.

                                       Bank of Montreal, as Administrative Agent

                                       By: /s/ Ben Ciallella
                                         Name:   Ben Ciallella
                                         Title: Asset Portfolio Management

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            ACKNOWLEDGMENT OF SECURITY AGREEMENT RE: DEPOSIT ACCOUNT

        The undersigned, being the institution issuing the Account referred to
in the above and foregoing Agreement, hereby acknowledges receipt of a copy of,
and consents to, said Agreement and agrees that it shall hold the Account and
all funds maintained for the account thereof as bailee for the Administrative
Agent under the terms of the Agreement and the undersigned will only release the
Account and the funds held for the account thereof to or upon the order of the
Administrative Agent, and not the Guarantor, except as otherwise specifically
provided for in the Agreement. The undersigned hereby certifies that the amount
owing on the Account as of the date hereof is not less than the amount set forth
in said Agreement, that the Guarantor is the only party having any interest in
the Account as appears on the records of the undersigned and that the
undersigned has not received notice of any assignment, other than said
Agreement, of said Account.

                                       Bank of Montreal

                                       By: /s/ Ben Ciallello
                                         Name:   Ben Ciallello
                                         Title: Asset Portfolio Management<PAGE>

                                                                    Exhibit 4.11

                              WAIVER TO CERTAIN OF
                             THE OPERATIVE DOCUMENTS

        This Waiver dated as of April 30, 2002 (this "Waiver") refers to the
Participation Agreement dated as of June 23, 1998, as amended (the
"Participation Agreement"), entered into by and among GSI Lumonics Corporation
(formerly known as Lumonics Corporation), a Michigan corporation, as the Lessee
and Construction Agent (in its capacity as lessee, the "Lessee" and in its
capacity as construction agent, the "Construction Agent"); GSI Lumonics Inc.
(formerly known as Lumonics Inc.), a New Brunswick corporation, as Guarantor
(the "Guarantor"); Bank of Montreal, a Canadian banking organization ("BMO"),
and the other various financial institutions as are or may from time to time
become lenders (the "Lenders") under the Loan Agreement; BMO, as Administrative
Agent (in such capacity, the "Administrative Agent") for the Lenders and
Arranger; and BMO Global Capital Solutions, Inc. (formerly known as BMO Leasing
(U.S.), Inc.), a Delaware corporation, as Agent Lessor and Lessor (in such
capacity as the agent lessor, the "Agent Lessor" and in such capacity as the
arranger, the "Lessor"). Terms defined in the Participation Agreement are,
unless otherwise defined herein or the context otherwise requires, used herein
as defined therein.

        Whereas, the Lessee, the Guarantor, the Agent Lessor, the Lenders, the
Administrative Agent and the Arranger have entered into the Participation
Agreement;

        Whereas, the Lessee and the Guarantor have breached certain financial
covenants set forth in Section 10.2 of the Participation Agreement and have
requested that such defaults be waived; and

        Whereas, the Agent Lessor, the Administrative Agent, the Lessors and the
Lenders are willing to waive the financial covenants subject to the satisfaction
of the conditions set forth in Section 2 hereof;

        Now, Therefore, the parties hereto agree as follows:

        Section 1.  Waiver. Effective on (and subject to the occurrence of) the
Amendment Effective Date (as defined below), the Agent Lessor, Lessors,
Administrative Agent and Lenders waive any and all defaults of Sections 10.2(a),
(b), (c), (d) and (e) of the Participation Agreement which occurred prior to the
date hereof and prospectively through June 22, 2003.

        Section 2.  Representations and Warranties. The Lessee and Guarantor
represent and warrant to the Lenders that, after giving effect hereto, (a) each
representation and warranty set forth in Section 8.2 of the Participation
Agreement is true and correct as of the date of the execution and delivery of
this Amendment by the Lessee and Guarantor with the same effect as if made on
such date (except to the extent such representations and warranties expressly
refer to an earlier date, in which case they were true and correct as of such
earlier date), except if changes to such representations and warranties have
been disclosed pursuant to publicly available documents and (b) no Event of
Default or Unmatured Event of Default exists.

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        Section 3.  Effectiveness. The waivers set forth in Section 1 above
shall become effective on the date (the "Amendment Effective Date") when the
Administrative Agent shall have received (a) counterparts of this Amendment
executed by the Lessee, the Guarantor, the Agent Lessor, the Lessors, the Lender
and the Administrative Agent and Arranger, (b) copies of corporate action of the
respective Board of Directors of the Guarantor taken by such respective Board of
Directors relative to the pledge of collateral described in (c) below certified
by a secretary or assistant secretary as of the date hereof to be true and
correct and in full force and effect as of such date and (c) cash collateral in
the amount of U.S. $18,925,000 and an executed Security Agreement re: Deposit
Account regarding the same.

        Section 4.  Reaffirmation of Guaranty. The Guarantor heretofore executed
and delivered to the Agent Lessor, the Lender, the Administrative Agent and the
Lessors, the Guaranty dated June 23, 1998. The Guarantor hereby consents to this
Waiver and confirms that the Guaranty and all of the Guarantor's obligations
thereunder remain in full force and effect with respect to the obligations
guaranteed thereunder as such obligations have been amended and increased by
this Amendment.

        Section 5.  Miscellaneous.

      Section 5.1.  Continuing Effectiveness, etc. The Participation Agreement,
the Loan Agreement and the remaining Operative Documents shall remain in full
force and effect and are hereby ratified and confirmed in all respects.

      Section 5.2.  Counterparts. This Waiver may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same Amendment.

      Section 5.3.  Governing Law. This Waiver shall be a contract made under
and governed by the laws of the State of Illinois applicable to contracts made
and to be performed entirely within such state.

      Section 5.4.  Successors and Assigns. This Waiver shall be binding upon
the Lessee, the Guarantor, the Agent Lessor, the Lessor, the Lender, the
Administrative Agent and the Arranger and their respective successors and
assigns, and shall inure to the benefit of the Lessee, Guarantor, the Agent
Lessor, the Lenders, the Lessor and the Administrative Agent and the respective
successors and assigns of the Agent Lessor, the Lessor, the Lenders and the
Administrative Agent and the Arranger.

                  [Remainder of Page Intentionally Left Blank]

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        In Witness Whereof, the parties hereto have caused this Waiver to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.

                                     GSI Lumonics Corporation (formerly known as
                                         Lumonics Corporation), as Lessee and
                                         Construction Agent

                                     By:  /s/ Victor H. Woolley
                                           Name: Victor H. Woolley
                                           Title: Vice President

                                     GSI Lumonics Inc. (formerly known as
                                        Lumonics Inc.), as Guarantor

                                     By:  /s/  Thomas R. Swain
                                          Name: Thomas R. Swain
                                          Title:  V.P. & CFO

                                     By   /s/  Eileen Casal
                                          Name:  Eileen Casal
                                          Title:  V.P. & General Counsel

                                     BMO Global Capital Solutions, Inc.
                                        (formerly known as BMO Leasing
                                        (U.S.), Inc.), as Agent Lessor and
                                        as a Lessor

                                     By:  /s/  Thomas A. Batterham
                                          Name:  Thomas A. Batterham
                                          Title:  Vice President

                                     Bank of Montreal, as Administrative Agent,
                                        Arranger and as a Lender

                                     By:  /s/  Ben Ciallella
                                          Name:  Ben Ciallella
                                          Title:  Asset Portfolio Management

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