GSI Group Inc. Announces the Entering into of Forbearance Agreements

    BEDFORD, MA, Feb. 19 /CNW Telbec/ - GSI Group Inc. (Nasdaq:   GSIG), a
supplier of precision technology and semiconductor systems (the "Company"),
announced today that on February 6, 2009, it entered into forbearance
agreements (collectively, the "Forbearance Agreements") with certain
beneficial owners (the "Investors") holding greater than 75% of the
outstanding aggregate principal amount of its 11% Senior Notes (the "Notes").
    The Company previously announced on December 4, 2008 and February 2,
2009, that it had identified errors related to the timing of revenue
recognition from sales to certain Semiconductor Systems Segment customers
during 2008 and 2007, respectively. As a result of the identification of those
errors, the Company has delayed the filing of its Quarterly Report on Form
10-Q for the quarterly period ended September 26, 2008 (the "Filing Delay").
    Pursuant to the Forbearance Agreements, the Investors agreed to forbear
from taking any action or exercising any remedies under the Indenture, dated
August 20, 2008, by and among GSI Group Corporation, as Issuer, The Bank of
New York Mellon Trust Company, N.A., as Trustee, the Company, as Guarantor,
and the other parties thereto (the "Indenture"), with respect to the Filing
Delay until the earlier of (i) the date on which a default or event of
default, other than the Filing Delay, occurs or exists, and (ii) February 27,
2009. The effectiveness of the forbearance is conditioned upon certain terms
and conditions set forth in the Forbearance Agreements, including the
following: (i) the Company shall retain the services of a financial advisor by
no later than February 20, 2009; (ii) in the event that Investors holding at
least 51% of the outstanding aggregate principal amount of the Notes elect to
retain the services of one financial advisor for purposes of rendering advice
in connection with such Investors' investment in the Company, the Company
agrees to pay reasonable fees and expenses of such advisor; and (iii) the
Indenture shall be amended to provide beneficial owners holding at least 25%
of the outstanding aggregate principal amount of the Notes with the ability to
provide a notice of failure thereunder.

    About GSI Group Inc.

    GSI Group Inc. supplies precision technology to the global medical,
electronics, and industrial markets and semiconductor systems. GSI Group
Inc.'s common shares are listed on Nasdaq (GSIG).

    Forward Looking Information

    Certain statements in this release are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 and
are based on current expectations and assumptions that are subject to risks
and uncertainties. All statements contained in this press release that do not
relate to matters of historical fact should be considered forward-looking
statements. These forward-looking statements include statements regarding the
qualitative and quantitative effects of the restatement, the periods covered
by the restatement, the nature of the Audit Committee's review and any
anticipated conclusions of GSI Group, its Audit Committee or management, and
other statements that are not historical facts. These forward looking
statements are subject to risks, uncertainties and changes in financial
condition, unknown factors and other items described in GSI Group's annual
report on Form 10-K for the fiscal year ended December 31, 2007 and the
quarterly reports on Form 10-Q filed with the Securities and Exchange
Commission. Such statements are based on management's beliefs and assumptions
and on information currently available to GSI Group's management. Actual
results may differ materially from the preliminary expectations expressed or
implied in these forward-looking statements due to various risks,
uncertainties or other factors, including the outcome and results of the
review by the Audit Committee and GSI Group's independent registered public
accounting firm. GSI Group disclaims any obligation to update any
forward-looking statements as a result of developments occurring after the
date of this document.

For further information:

For further information: Sergio Edelstein, GSI Group Inc., (781)

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