GSI Group (GSIG)

3. Bank Indebtedness

At both December 31, 2007 and December 31, 2006, the Company had no bank lines of credit.

3. Bank Indebtedness

FACE="Times New Roman" SIZE="2">At both December 31, 2007 and December 31, 2006, the Company had no bank lines of credit.

3. Bank Indebtedness

At both December 31, 2006 and December 31, 2005, the Company had no material lines of credit.

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GSI GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of December 31, 2006

(United States GAAP and tabular amounts in thousands of United States dollars except share amounts)

4. Bank Indebtedness

At December 31, 2005, pursuant to a security agreement between the Company and Bank of America, marketable securities included in short-term investments totaling $5.0 million were pledged as collateral for the Bank of America pledge agreement. This pledge was no longer required at September 29, 2006.

4. Bank Indebtedness

At December 31, 2005, pursuant to a security agreement between the Company and Bank of America, marketable securities included in short-term investments totaling $5.0 million were pledged as collateral for the Bank of America pledge agreement. This pledge was no longer required at June 30, 2006.

4. Bank Indebtedness

At both March 31, 2006 and December 31, 2005, the Company had no lines of credit but had two bank guarantees in British Pounds Sterling and Euros with National Westminster Bank, (“NatWest”), and Deutsche Bank respectively, for a total amount of available credit of $0.1 million at both March 31, 2006 and December 31, 2005. The NatWest bank guarantee for letters of credit, which are used for VAT and duty purposes in the United Kingdom, is valued at $45 thousand for both March 31, 2006 and December 31, 2005. The Deutsche Bank guarantee of $102 thousand and $101 thousand for March 31, 2006 and December 31, 2005, respectively, is for our Munich, Germany office lease. At December 31, 2005, pursuant to a security agreement between the Company and Bank of America, marketable securities included in short-term investments totaling $5.0 million were pledged as collateral for the Bank of America pledge agreement. This pledge is no longer required at March 31, 2006.

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4. Bank Indebtedness

At both December 31, 2005 and December 31, 2004, the Company had no lines of credit but had two bank guarantees in British Pounds Sterling and Euros with National Westminster Bank, or NatWest, and Deutsche Bank respectively, for a total amount of available credit of $0.1 million at December 31, 2005 and $0.2 million at December 31, 2004, respectively. The NatWest bank guarantee for letters of credit, which is used for VAT and duty purposes in the United Kingdom, is valued at $45 thousand and $38 thousand for December 31, 2005 and December 31, 2004, respectively. The Deutsche Bank guarantee of $101 thousand and $116 thousand for December 31, 2005 and December 31, 2004, respectively, is for our Munich, Germany office lease. At December 31, 2005, pursuant to a security agreement between the Company and Bank of America, marketable securities included in short term investments at December 31, 2005 (included in long term investments at December 31, 2004) totaling $5.0 million had been pledged as collateral for the Bank of America pledge agreement.

5.  Bank Indebtedness

          At both September 30, 2005 and December 31, 2004, the Company had no lines of credit but had two bank guarantees in British Pounds Sterling and Euros with National Westminster Bank (“NatWest”), and Deutsche Bank respectively, for a total amount of available credit of $0.1 million and $0.2 million at September 30, 2005 and December 31, 2004, respectively.  The NatWest bank guarantee for letters of credit, which is used for VAT and duty purposes in the United Kingdom, is valued at $46 thousand and $38 thousand at September 30, 2005 and December 31, 2004, respectively.  The Deutsche Bank guarantee of $102 thousand and $116 thousand for September 30, 2005 and December 31, 2004, respectively, is for our Munich, Germany office lease.  Pursuant to a security agreement between the Company and Bank of America, marketable securities totaling $5.0 million had been pledged as collateral for the Bank of America foreign currency swap agreement. This $5.0 million investment is included in short-term investments as of September 30, 2005 and long-term investments as of December 31, 2004.

5.  Bank Indebtedness

          At both July 1, 2005 and December 31, 2004, the Company had no lines of credit but had two bank guarantees in British Pounds Sterling and Euros with National Westminster Bank (“NatWest”), and Deutsche Bank respectively, for a total amount of available credit of $0.1 million and $0.2 million at July 1, 2005 and December 31, 2004, respectively.  The NatWest bank guarantee for letters of credit, which is used for VAT and duty purposes in the United Kingdom, is valued at $36 thousand and $38 thousand at July 1, 2005 and December 31, 2004, respectively.  The Deutsche Bank guarantee of $103 thousand and $116 thousand for July 1, 2005 and December 31, 2004, respectively, is for our Munich, Germany office lease.  Pursuant to a security agreement between the Company and Bank of America, marketable securities totaling $5.0 million had been pledged as collateral for the Bank of America foreign currency swap agreement. This $5.0 million investment is included in short-term investments as of July 1, 2005 and long-term investments as of December 31, 2004.

5.  Bank Indebtedness

     At both April 1, 2005 and December 31, 2004, the Company had no lines of credit but had two bank guarantees in British Pounds Sterling and Euros with National Westminster Bank, (“NatWest”), and Deutsche Bank respectively, for a total amount of available credit of $0.1 million and $0.2 million at April 1, 2005 and December 31, 2004, respectively. The NatWest bank guarantee for letters of credit, which are used for VAT and duty purposes in the United Kingdom, is valued at $38 thousand for both April 1, 2005 and December 31, 2004. The Deutsche Bank guarantee of $110 thousand and $116 thousand for April 1, 2005 and December 31, 2004, respectively, is for our Munich, Germany office lease. At both April 1, 2005 and December 31, 2004, pursuant to a security agreement between the Company and Bank of America, marketable securities included in long term investments totaling $5.0 million had been pledged as collateral for the Bank of America pledge agreement.