SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 8-K

                                CURRENT REPORT
                    PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

       DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) December 10, 2003
                                                       (December 10, 2003)


                               GSI Lumonics Inc.
              -------------------------------------------------
              (Exact Name of Registrant as Specified in Charter)


New Brunswick, Canada             000-25705                98-0110412
------------------------------------------------------------------------------
(State or Other                   (Commission              (IRS Employer
Jurisdiction of                   File Number)             Identification No.)
Incorporation)


39 Manning Road, Billerica, Massachusetts                          01821
------------------------------------------------------------------------------
(Address of Principal Executive Offices)                       (Zip Code)


       Registrant's Telephone Number, including area code (978) 439-5511
                                                          --------------


                                      N/A
         ------------------------------------------------------------
         (Former Name or Former Address, if Changed Since Last Report)


ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS.
------   ------------------------------------

         On December 10, 2003, GSI Lumonics Corporation completed the purchase
of the whole of the issued share capital of Westwind Air Bearings Inc. from FR
Holdings Inc. and GSI Lumonics Limited completed the purchase of the whole of
the issued share capital of Westwind Air Bearings Limited from Cobham Plc and
Lockman Investments Limited. Both GSI Lumonics Corporation and GSI Lumonics
Limited are wholly owned subsidiaries of GSI Lumonics Inc. The purchase price
was (British pound) 21,250,000 in cash. The amount of the consideration was
determined through arm's length negotiations between the parties and was
financed out of available cash and investments at hand. Both Westwind Air
Bearings Limited and Westwind Air Bearings Inc. are involved in the design,
manufacture and supply of products using air bearing technology.

         Copies of the sale and purchase agreement, dated December 10, 2003,
relating to the above, and the press release are attached hereto as exhibits
2.1 and 99.1 respectively.

<PAGE>



ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.
------   ---------------------------------

(a)      Financial Statements of Business Acquired. Not applicable.

(b)      Pro Forma Financial Information. Not applicable.

(c)      Exhibits. The following exhibits are furnished in accordance with the
provisions of Item 601 of Regulation S-K.

Exhibit No.             Description
-------------           -----------
2.1                   Agreement for the sale and purchase of the whole of the
                      issued share capital of Westwind Air Bearings Limited
                      and Westwind Air Bearings Inc. among Cobham plc, FR
                      Holdings Inc., Lockman Investments Limited, GSI Lumonics
                      Limited and GSI Lumonics, Corporation, dated December 10,
                      2003. GSI Lumonics Inc. agrees to furnish supplementally
                      any omitted schedule to the Commission upon request.

99.1                  Press release issued by GSI Lumonics Inc., dated
                      December 10, 2003.

<PAGE>

                                  SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                         GSI Lumonics Inc.
                                         (Registrant)

                                         By:  /s/ Thomas R. Swain
                                             ---------------------------------
                                         Name:  Thomas R. Swain
                                         Title: Vice President of Finance and
                                                Chief Financial Officer

Dated: December 10, 2003


                                 EXHIBIT INDEX
                                 -------------

Exhibit
-------

2.1                   Agreement for the sale and purchase of the whole of the
                      issued share capital of Westwind Air Bearings Limited
                      and Westwind Air Bearings Inc.

99.1                  Press release issued by GSI Lumonics Inc., dated
                      December 10, 2003.




<PAGE>

                                                                   Exhibit 2.1

                                                                EXECUTION COPY



                          DATED    10 DECEMBER 2003







                                   COBHAM plc

                                     - and -

                                FR HOLDINGS INC.

                                     - and -

                           LOCKMAN INVESTMENTS LIMITED

                                     - and -

                              GSI LUMONICS LIMITED

                                     - and -

                            GSI LUMONICS, CORPORATION





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

                                    AGREEMENT

                          for the sale and purchase of
                      the whole of the issued share capital
                      of Westwind Air Bearings Limited and
                           Westwind Air Bearings Inc.

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





<PAGE>


                                    CONTENTS
Clause                                                                  Page

1     INTERPRETATION.....................................................2
2     SALE AND PURCHASE OF THE SALE SHARES...............................5
3     CONSIDERATION......................................................5
4     SELLERS' WARRANTIES................................................5
5     LIMITATIONS OF LIABILITY...........................................7
6     PURCHASERS' WARRANTIES............................................10
7     TAX DEED..........................................................11
8     COMPLETION........................................................11
9     GUARANTEES AND LOAN ACCOUNTS......................................13
10    PROTECTIVE COVENANTS..............................................14
11    THE ESCROW........................................................15
12    ANNOUNCEMENTS AND CONFIDENTIALITY.................................17
13    INTEREST..........................................................18
14    NOTICES...........................................................18
15    RESOLUTIONS AND WAIVERS...........................................19
16    GENERAL...........................................................20
17    WHOLE AGREEMENT...................................................21
18    GOVERNING LAW.....................................................21
19    SELLERS' REPRESENTATIVE...........................................22

Schedule
1     SALES SHARES AND CONSIDERATION......................................
2     PARTICULARS OF THE COMPANIES........................................
3     PARTICULARS OF THE SUBSIDIARIES.....................................
4     PROPERTIES..........................................................
5     WARRANTIES..........................................................


Documents to accompany agreement:

(1)   Disclosure Letter
(2)   Tax Deed



                                       (i)

<PAGE>



THIS AGREEMENT is made on           10 December 2003

BETWEEN:

(1)      COBHAM plc, a company incorporated under the laws of England and Wales
         registered under number 30470, whose registered office is at Brook
         Road, Wimborne, Dorset BH21 2BJ, England ("Cobham");

(2)      FR HOLDINGS, INC., a corporation incorporated under the laws of
         Delaware, USA with number 0912214 whose registered office is c/o The
         Corporation Trust Company, Corporation Trust Center, 1209 Orange
         Street, Wilmington, Delaware 19801, USA ("FRH");

(3)      LOCKMAN INVESTMENTS LIMITED, a company incorporated under the laws of
         England and Wales registered under number 675211, whose registered
         office is at Brook Road, Wimborne, Dorset BH21 2BJ, England
         ("Lockman", and together with Cobham and FRH, the "Sellers");

(4)      GSI LUMONICS LIMITED, a company incorporated under the laws of
         England and Wales registered under number 01041317 whose registered
         office is at Cosford Lane, Swift Valley, Rugby, Warwickshire CV21
         1QN, England ("UK Purchaser"); and

(5)      GSI LUMONICS, CORPORATION, a corporation incorporated under the laws
         of Michigan USA whose principal offices are at 39 Manning Road,
         Billerica, Massachusetts, MA 01821, USA (the "US Purchaser") and,
         together with the UK Purchaser, the "Purchasers").

WHEREAS:

(A)      Westwind Air Bearings Limited ("Westwind UK") is a private company
         limited by shares short particulars of which are set out in Part A of
         Schedule 2 having an authorised capital of (British pound)25,890,225
         and US$5,000 divided into 500,000 deferred shares of (British pound)1
         each, 4,920,000 unclassified shares of (British pound)1 each,
         8,693,225 9% non-redeemable cumulative preference shares of (British
         pound)1 each, 11,777,000 6.3% redeemable cumulative preference shares
         of (British pound)1 each and 500,000 ordinary shares of US$0.01 each
         of which 500,000 deferred shares, 11,777,000 6.3% redeemable
         cumulative preference shares and 25,000 ordinary shares have been
         issued fully paid or credited as fully paid ("Westwind UK Shares").

(B)      Westwind Air Bearings Inc. ("Westwind US") is a corporation short
         particulars of which are set out in Part B of Schedule 2 having an
         authorised capital of US$10 divided into 1,000 shares of US$0.01 each
         100 of which have been issued ("Westwind US Shares").

(C)      Each of the Sellers wishes to sell the Sale Shares (as defined below)
         set opposite its name in Schedule 1 and the UK Purchaser wishes to
         purchase the Westwind UK Shares and the US Purchaser wishes to
         purchase the Westwind US Shares, in each case, on the terms set out
         in this agreement.


                                       1
<PAGE>


IT IS AGREED as follows:

1        INTERPRETATION

1.1      In this agreement:

         "Accounts" means the audited balance sheet as at the Accounts Date and
         audited profit and loss account for the period of 12 months ended on
         that date of each of the Group Companies (other than Westwind Air
         Bearings (Suzhou) Co., Ltd., and Westwind US) and in each case the
         notes, statements and directors' reports relating to them;

         "Accounts Date" means 31 December, 2002;

         "Business Day" means a day on which banks are open for business in
         London and New York (excluding Saturdays, Sundays and public holidays);

         "Claim" means any claim made by any of the Purchasers against any of
         the Sellers for breach of Warranty or under the Tax Deed;

         "Companies" means Westwind UK and Westwind US and "Company" means
         each or both of them (as the case may be);

         "Completion" means completion of the sale and purchase of the Sale
         Shares in accordance with clause 8;

         "Completion Date" means the date of this agreement;

         "Confidential Information" means business, technical, financial,
         operational, administrative, staff management, marketing and economic
         information relating primarily to the Group, the identities of
         customers and all other information of a secret and/or proprietary
         nature relating to the Group but shall not include such information
         relating to the Group which is in, or which comes into, the public
         domain or a party's possession other than as a result of (i) a breach
         of any obligations imposed by this agreement or (ii) a breach of any
         other duty of confidentiality relating to that information;

         "Consideration" means the aggregate consideration payable in respect
         of all of the Sale Shares;

         "Disclosure Letter" means the letter relating to the Warranties of the
         same date as this agreement from the Sellers' to the Purchasers,
         receipt of which has been acknowledged by the Purchasers;

         "Escrow Account" means the account in the joint names of Cobham and
         Westwind UK in which the Escrow Amount is held;

         "Escrow Amount" has the meaning given in clause 8.3(a);

         "Group Companies" means each of the Companies and the Subsidiaries
         and "Group Company" means any of them;

         "Group Loans" means any indebtedness by way of borrowing, including
         accrued interest thereon, between the Sellers' Group and the Group
         Companies;


                                       2
<PAGE>

         "Information Technology" means all material computer systems (including
         software and hardware) owned by or licensed to the Group Companies;

         "Intellectual Property Rights" means (i) copyright, patents, know-how,
         trade secrets, database rights, and rights in trade-marks and designs
         (whether registered or unregistered), (ii) applications for
         registration (including all corresponding foreign counterpart
         applications, re-issues, re-examinations, divisionals, continuations,
         continuations-in-part and extensions thereof) and the right to apply
         for registration, for any of the same, and (iii) all other intellectual
         property rights and equivalent or similar forms of protection existing
         anywhere in the world;

         "Liens" means any liens, pledges, encumbrances, charges (fixed or
         floating), mortgages, third party claims, debentures, options, rights
         of pre-emption, rights to acquire, assignment by way of security,
         trust arrangement for the purpose of providing security or security
         interests of any kind, including retention arrangements or other
         encumbrances and any agreement to create the foregoing;

         "Planning Acts" means the Town and Country Planning Act 1990, the
         Planning (Listed Buildings and Conservation Areas) Act 1990, the
         Planning (Hazardous Substances) Act 1990, the Planning (Consequential
         Provisions) Act 1990 and the Planning and Compensation Act 1991;

         "Properties" means properties specified in schedule 4 and "Property"
         means any of them and includes every part of each of them;

         "Purchasers' Group" means each of the Purchasers and their group
         undertakings (including each Group Company) at the date of this
         agreement;

         "Restricted Business" means the design, manufacture and supply of
         products and services using air bearing technology;

         "Sale Shares" means the Westwind UK Shares and the Westwind US Shares
         referred to in Schedule 1;

         "Sellers' Group" means the Sellers and their group undertakings
         (except the Group Companies) at the date of this agreement;

         "Sellers' Representative" means Cobham or any alternative
         representative from time to time notified to the Purchasers in
         accordance with this agreement;

         "Senior Employee" means an employee of any Group Company who is in
         receipt of an annual gross basic salary (on the basis of full-time
         employment) in excess of (British pound)50,000;

         "Subsidiaries" means all the companies details of which are set out
         in Schedule 3 and "Subsidiary" means any of them;

         "TCGA" means Taxation of Chargeable Gains Act 1992;

         "Taxation" or "Tax" has the meaning given to it in the Tax Deed;

         "Tax Authority" has the meaning given to it in the Tax Deed;


                                       3
<PAGE>


         "Tax Claim" means any claim by any of the Purchasers against any of
         the Sellers pursuant to the Tax Deed or for breach of the Tax
         Warranties;

         "Tax Deed" means the tax deed dated the date of this agreement
         between the Sellers and the Purchasers;

         "Taxes Act" means Income and Corporation Taxes Act 1988;

         "Tax Warranties" means those warranties in Part D of Schedule 5;

         "Transaction" means the acquisition by each of the Purchasers of the
         relevant Sale Shares;

         "UK GAAP" means generally accepted accounting principles and
         practices in the United Kingdom;

         "VATA" means the Value Added Tax Act 1994;

         "Warranties" means the warranties contained in Schedule 5 and
         "Warranty" means anyone of them; and

         "Warranty Claim" means any claim by the Purchasers in connection with
         the Warranties.

1.2      In this agreement any reference, express or implied, to an enactment
         includes references to:

         (a)   that enactment as amended, extended or applied by or under any
               other enactment (before or after signature of this agreement);

         (b)   any enactment which that enactment re-enacts (with or without
               modification); and

         (c)   any subordinate legislation made (before or after signature of
               this agreement) under any enactment, as re-enacted, amended,
               extended or applied as described in paragraph (a) above, or
               under any enactment referred to in paragraph (b) above;

         and "enactment" includes any legislation in any jurisdiction.

1.3      Where any expression is qualified by the expression "so far as the
         Sellers are aware" or to "the Sellers' knowledge, information and
         belief" or any similar expression that statement shall be deemed to
         be made on the basis of the actual knowledge of Warren Tucker and
         Allan Cook and the knowledge those persons would have if they had
         made reasonable enquiry of the following persons in relation to the
         following areas: Steve Webb (all areas), Chris Roberts (all areas),
         Steve Ratcliffe (Part 1 and sections A, B and C of Part 2 of Schedule
         5), Chris Watford (section F of Part 2 of Schedule 5) and Ken
         Morrison (section D of Part 2 of Schedule 5).

1.4      Words denoting persons shall include bodies corporate and
         unincorporated associations of persons and a reference to a person
         includes that person's legal personal representatives, successors and
         permitted assigns.

1.5      Terms defined in the Companies Act 1985, as amended, shall have the
         same meanings herein.


                                       4
<PAGE>


1.6      In this agreement a reference to a clause, paragraph or schedule,
         unless the context otherwise requires, is a reference to a clause,
         paragraph or schedule to this agreement.

1.7      In this agreement, a reference to times of the day is to London time.

1.8      In construing this agreement the so-called "ejusdem generis" rule
         does not apply and accordingly the interpretation of general words is
         not restricted by (i) being preceded by words indicating a particular
         class of acts, matters or things; or (ii) being followed by
         particular examples.

1.9      Clauses 1.1 to 1.8 apply unless the contrary intention appears.

1.10     The headings in this agreement do not affect its interpretation.

2        SALE AND PURCHASE OF THE SALE SHARES

2.1      Subject as provided in this agreement, each of the Sellers shall
         sell, with full title guarantee on the terms that the same shall be
         sold free from all Liens or other third party rights of any nature
         whatsoever, the Sale Shares set opposite its name in Schedule 1, and
         each of the Purchasers agrees to purchase the Sale Shares set
         opposite its name in Schedule 1, together with all rights attaching
         to them at the date of Completion.

2.2      From and after Completion, each of the Purchasers shall be entitled
         to exercise all rights which are attached or accruing to the Sale
         Shares set out opposite its name in Schedule 1 including, without
         limitation, the right to receive all dividends, distributions or any
         return of capital declared, made or paid with effect from Completion.

2.3      Each Seller covenants that, on or after Completion, it will, at its
         own cost and expense, execute and do (or procure to be executed and
         done by and other necessary party) all such deeds, documents, acts
         and things as the Purchasers may from time to time require in order
         to vest any of the Sale Shares in the Purchasers or their nominees
         which are nominated in accordance with clause 8.

2.4      The Purchasers and Sellers shall not be obliged to complete the
         purchase or sale of any of the Sale Shares unless the purchase and
         sale of all the Sale Shares is completed simultaneously in accordance
         with this agreement.

3        CONSIDERATION

3.1      The Consideration for the sale and purchase of the Sale Shares shall
         be the sum of(British pound)21,250,000 to be paid in cash in
         accordance with clause 8 and apportioned between the Sellers as
         provided in Schedule 1.

3.2      If any payment is made by a Seller to the Purchasers under or in
         respect of any breach of any provision of this agreement (including
         any payment pursuant to any Claim, including a Tax Claim) the payment
         shall so far as possible be treated as a reduction in the
         Consideration and the Consideration shall accordingly be reduced by
         the amount of such payment.

4        SELLERS' WARRANTIES

4.1      Each Seller jointly and severally warrants to each of the Purchasers
         that:

                                      5

<PAGE>

         (a)   each of the statements set out in Part 1 of Schedule 5 is true
               and accurate in respect of such Seller and the Sale Shares set
               opposite its name in Schedule 1; and

         (b)   except as fairly disclosed in the Disclosure Letter, each of
               the statements set out in Part 2 of Schedule 5 is true and
               accurate.

4.2      Each of the Warranties set out in the several paragraphs of Schedule
         5 is separate and independent and, except as expressly provided to
         the contrary in this agreement, is not limited:

         (a)   by reference to any other paragraph of Schedule 5; or

         (b)   by anything in this agreement or the Tax Deed or any other
               document referred to herein (other than the Disclosure Letter).

4.3      Each of the Sellers agrees with the Purchasers (for itself and as
         trustee for each Group Company) to waive any rights or claims which
         it may have against any Group Company or the directors, officers or
         employees of any Group Company in respect of any misrepresentation,
         inaccuracy or omission in or from any information or advice supplied
         or given by any Group Company or its employees in connection with the
         giving of the Warranties or the Tax Deed and the preparation of the
         Disclosure Letter other than in respect of any fraudulent
         misrepresentation, inaccuracy or omission.

4.4      The Purchasers hereby, and undertake to shall procure that the Group
         Companies will, waive all rights and claims, in relation to dividend
         payments on the preference shares in the capital of Westwind UK,
         which they may have against any director of any Group Company or
         against any member of the Sellers' Group and covenant not to, and
         undertake to procure that the Group Companies will not, take any
         action against any director of any Group Company or against any
         member of the Sellers' Group in relation thereto.

4.5      Any sum payable to the Purchasers pursuant to a Claim shall be made
         free and clear of and without deduction for or on account of any
         Taxation, except to the extent that any such deduction or withholding
         is required by law. If such Taxation or amounts in respect of such
         Taxation must be deducted or withheld from any sum payable to the
         Purchasers pursuant to a Claim, then the Sellers shall pay an
         additional amount (such amount being referred to as the "gross-up
         amount") as will ensure that after such deduction or withholding
         there shall remain a sum equal to the amount that would otherwise
         have been payable to the Purchasers pursuant to a Claim. To the
         extent that the Purchaser subsequently obtains any Taxation credit,
         allowance, repayment or relief as a result of a Seller paying to the
         Purchaser the gross-up amount, the Purchaser shall pay to the Seller
         so much of the economic benefit from that Taxation credit, allowance,
         repayment or relief which the Purchaser has received and retained as
         does not exceed the gross-up amount.

4.6      If there is a breach of a Warranty and as a result of the breach:

         (a)   the value of the Group Company or of its assets are less than
               it would have been in the absence of the breach; or

         (b)   the Group Company incurs a liability which it would not have
               incurred, or which exceeds the liability it would have
               incurred, had matters been as warranted; or


                                       6
<PAGE>

         (c)   a Group Company suffers loss, costs or expenses,

         then the Sellers shall pay to the Purchasers by way of damages an
         amount equal to the resulting diminution of value, or the liability
         or excess liability, and the loss, costs and expenses (including
         legal and other professional fees). Nothing in this agreement shall
         be deemed to relieve the Purchasers from any common law duty to
         mitigate any loss or damage incurred by it or the Group Companies as
         a result of any breach of the Warranties.

5        LIMITATIONS OF LIABILITY

5.1      The liability of the Sellers in respect of the Warranties shall be
         limited as follows:

         (a)   the Sellers shall not be liable in respect of any breach of the
               Warranties if and to the extent that the losses arising from
               the breach are actually recovered under the Tax Deed or any
               other provision of this agreement;

         (b)   if in respect of any one matter a Tax Claim may be made both
               under the Tax Warranties and under the Tax Deed, then to the
               extent that recovery in respect of that Tax Claim is actually
               made under the Tax Warranties, the amount payable under the Tax
               Deed in respect of the same matter is reduced accordingly and
               vice versa;

         (c)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it relates to any liability for which
               provision is made or falls to be made, or of which the payment
               or discharge is reflected, in the Accounts;

         (d)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it relates to any liability or
               obligation which would not have arisen but for a change in
               legislation or any amendment to, or the withdrawal of, any
               practice previously published by a Tax Authority, in either
               case occurring after Completion, in each case with
               retrospective effect;

         (e)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it relates to any liability or
               obligation which arises as a result of any change after
               Completion of the date to which any Group Company makes up its
               accounts or in the accounting policies and practices of any
               Group Company or in any change from UK GAAP (or other
               applicable accountancy standard or practices used by the Group
               Company) to any other accounting standards or practices;

         (f)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it relates to any liability or
               obligation which was occasioned by any voluntary act of the
               Purchasers' Group or any Group Company after Completion save
               (subject to clause 5.1(m) below) in respect of any Warranty
               Claim under the environmental warranties set out in paragraph
               A.10 of Part 2 of Schedule 5;

         (g)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it relates to any liability or
               obligation of which the Purchasers' Group are actually aware at
               the date of this agreement;

         (h)   in the case of a Taxation liability, the Sellers shall not be
               liable in respect of any Warranty Claim to the extent that it
               relates to any liability or obligation if any profits or other
               amount to which the Taxation is attributable were actually


                                       7
<PAGE>


               received by any Group Company but were not reflected in the
               Accounts and should have been;

         (i)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it arises or is increased as a result
               of the failure of any Group Company to make any valid claim,
               election, surrender or disclaimer, to give any valid notice or
               consent or to do any other thing under the provisions of any
               enactment or regulation relating to Taxation after Completion,
               the making, giving or doing of which was taken into account in
               computing the provisions for Taxation in the Accounts and
               either set out in the notes thereto or notified in good time in
               writing to the Purchaser after Completion;

         (j)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent it arises as a result of a failure by the
               Purchaser to comply with Clause 10 (Conduct of Tax Affairs) of
               the Tax Deed;

         (k)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it would not have arisen but for a
               material change in the nature or conduct of any trade carried
               on by any Group Company at Completion, being a material change
               occurring on or after Completion;

         (l)   the Sellers shall not be liable to the Purchasers (taken
               together) more than once in respect of the same loss; and

         (m)   the Sellers shall not be liable in respect of any Warranty
               Claim under the environmental warranties set out in paragraph
               A.10 of Part 2 of Schedule 5 where such claim arises as a
               result of:

               (i)    any information provided to any regulatory authority by
                      the Purchasers or the Group Companies save (i) as
                      required by law or legislation or (ii) where such
                      information is provided as a direct result of a written
                      request to the Purchasers or the Group Companies for
                      such information by such regulatory authority and
                      neither the Purchasers nor any person acting on their
                      behalf has done anything to incite or encourage such a
                      written request from the relevant authority;

               (ii)   any intrusive investigations undertaken at any Relevant
                      Property by or on behalf of the Purchasers (except where
                      demanded of the Purchasers by any regulatory authority
                      or a prospective purchaser of any of the Properties or
                      the Group Companies or in the ordinary course of business
                      of the Group Companies as carried out at the date of this
                      agreement).

5.2      The Purchasers and the Sellers each acknowledge that neither of them
         are aware of any Warranty Claim arising out of the WSP Environmental
         UK Ltd., Phase 1 environmental audit in relation to Holton Health
         Industrial Estate, Poole, Dorset.

5.3      The liability of the Sellers shall also be limited as follows:

         (a)   the Purchaser shall not be entitled to recover any damages in
               respect of any breach or breaches of the Warranties unless (i)
               the amount of damages in respect


                                       8
<PAGE>

               of such breach or breaches exceeds in aggregate the sum of
               (British pound)180,000, in which event the Sellers shall be
               liable for the whole amount of the liability and not merely the
               excess and (ii) each individual claim or series of claims
               arising out of the same matters, facts or circumstances exceeds
               (British pound)15,000; and

         (b)   the maximum aggregate liability of the Sellers under this
               agreement and the Tax Deed shall not exceed the Consideration.

5.4      The Purchasers shall not be entitled to make any Warranty Claim in
         respect of any matter fairly disclosed in the Disclosure Letter.

5.5      If after Completion any of the Purchasers or any Group Company
         becomes aware of a matter which could give rise to a claim under the
         Warranties (other than in respect of a breach of any Tax Warranty, in
         which case the claim shall be dealt with in the manner set out in the
         Tax Deed) the Sellers shall not be liable in respect of the Warranty
         Claim unless the Purchasers have given written notice of the claim,
         setting out reasonable particulars of the relevant facts, and, if
         reasonably practicable the amount claimed, to the Sellers promptly
         and in any event within three months of any officer of GSI Lumonics,
         Inc. (the parent undertaking of the Purchasers' Group) becoming aware
         of such Warranty Claim.

5.6      The Sellers shall cease to have any liability under or in respect of
         the Warranties:

         (a)   on the later to occur of the relevant limitation period and the
               tenth anniversary of the Completion Date for claims arising
               under the Warranties in Part 1 of Schedule 5;

         (b)   in respect of the Tax Warranties on the seventh anniversary of
               the Completion Date provided that, in the case of Westwind US
               or any Subsidiaries subject to Tax in a jurisdiction outside
               the United Kingdom, on such later date as is six months after
               the last date on which the Tax Authority which is seeking to
               impose a Tax to which any Claim relates may do so;

         (c)   on the seventh anniversary of the date of Completion in respect
               of claims under Warranty A.10 (Environmental); and

         (d)   on the date 18 months after the Completion Date in respect of
               all other Warranties,

         except in respect of a Warranty Claim of which the Purchaser gives
         written notice to the Sellers before the relevant date. The liability
         of the Sellers in respect of any Warranty Claim shall in any event
         terminate if proceedings in respect of it have not commenced within
         six months of service of notice of that Warranty Claim.

5.7      The limitations of liability contained in this clause 5 shall not
         apply to any liability for any Claim to the extent that the same is
         attributable to fraud, fraudulent misrepresentation or wilful
         concealment on the part of the relevant Seller.

5.8      If, at any time after the date of this agreement and before the
         expiry of three months following Completion the Sellers (or any of
         them), want to insure their liabilities in respect of claims they
         shall (notwithstanding any other provision of this agreement) be able
         to disclose Confidential Information to a prospective insurer subject
         to the receipt


                                       9
<PAGE>

         of a confidentiality undertaking from such insurer in form and
         substance reasonably satisfactory to the Purchasers.

5.9      If a claim for breach of Warranty arises as a result of, or in
         connection with, a liability or alleged liability to a third party (a
         "Third Party Claim"), then (except for a liability in relation to
         Taxation where the provisions of the schedule to the Tax Deed shall
         apply) at the Sellers' cost in respect of out of pocket expenses (but
         not, for example, management time);

         (a)   the Purchasers shall procure the relevant Group Company to make
               available to the Sellers such persons and all such information
               as the Sellers may reasonably require for assessing,
               contesting, appealing or compromising the Third Party Claim;

         (b)   the Purchasers shall procure the relevant Group Company, to the
               extent reasonably practicable, to consult with the Sellers in
               relation to the conduct of any appeal, dispute, compromise or
               defence of the Third Party Claim; and

         (c)   the Purchaser shall, and shall procure that the relevant Group
               Company shall, to the extent reasonably practicable, keep the
               Sellers informed of the progress of the Third Party Claim.

5.10     This paragraph applies if:

         (a)   the Sellers make a payment (excluding any interest on a late
               payment) in respect of a claim for breach of Warranty (the
               "Damages Payment"); and

         (b)   any Group Company or any Purchaser receives any sum which would
               not have been received but for the circumstance which gave rise
               to that claim for breach of Warranty (the "Third Party Sum");
               and

         (c)   the receipt of the Third Party Sum was not taken into account
               in calculating the Damages Payment; and

         (d)   the aggregate of the Third Party Sum and the Damages Payment
               exceeds the amount required to compensate the Purchaser in full
               for the loss or liability which gave rise to the claim for
               breach of Warranty in question, such excess being the Excess
               Recovery.

         If this paragraph applies, the relevant Purchaser shall, promptly on
         receipt of the Third Party Sum by it or the relevant Group Company,
         repay to the relevant Seller(s) an amount equal to the lower of (i)
         the Excess Recovery and (ii) the Damages Payment, after deducting (in
         either case) all costs incurred by the Purchaser(s) or the relevant
         Group Company in recovering the Third Party Sum and any taxation
         payable by the Purchaser(s) or any Group Company by virtue of its
         receipt.

5.11     Without prejudice to the Purchasers' duty to mitigate any loss in
         respect of any breach of the Warranties, if in respect of any matter
         which would otherwise give rise to a breach of the Warranties one of
         the Group Companies is entitled to claim under any policy of
         insurance, the amount of insurance monies to which that Group Company
         actually receives shall reduce pro tanto or extinguish the claim for
         breach of the Warranties.


                                      10
<PAGE>


6        PURCHASERS' WARRANTIES

6.1      Each of the Purchasers warrants to the Sellers that:

         (a)   it has the requisite power and authority to enter into and to
               perform this agreement and the agreements and deed referred to
               in this agreement which are to be entered into by the
               Purchasers or one or more members of the Purchasers' Group;

         (b)   it has obtained or satisfied all corporate, regulatory and
               other approvals, or any other conditions, necessary to execute
               and complete this agreement and the agreements and deed
               referred to in this agreement which are to be entered into by
               the Purchasers or one or more members of the Purchasers' Group;

         (c)   this agreement and each of the agreements and the deed referred
               to in this agreement which are to be entered into by the
               Purchasers or one or more members of the Purchasers' Group
               constitute binding obligations of each of the Purchasers and
               each such member in accordance with its respective terms;

         (d)   compliance with the terms of this agreement and the agreements
               and deed referred to in this agreement which are to be entered
               into by the Purchasers or one or more members of the
               Purchasers' Group does not and will not conflict with or
               constitute a default or a breach under any provision of:

               (i)    the Purchasers' or the respective member's memorandum or
                      articles of association or by-laws or equivalent
                      constitutional documents; or

               (ii)   any order, judgement, decree or regulation or any other
                      restriction of any kind by which the Purchasers or the
                      respective member is bound or submits; or (iii) any
                      agreement, instrument or contract to which the
                      Purchasers or the respective member is a party or by
                      which it is bound; and

         (e)   it is not actually aware of any breach of Warranty by the
               Sellers.

7        TAX DEED

7.1      The parties to the Tax Deed shall enter into the Tax Deed on
         Completion.

8        COMPLETION

8.1      Completion shall take place at the offices of Allen & Overy at 40
         Bank Street, Canary Wharf, London immediately after the signature of
         this agreement (or on such later date as the Sellers and the
         Purchasers may agree in writing).

8.2      At Completion:

         (a)   Cobham and Westwind UK shall each sign the bank mandate in
               respect of the Escrow Account providing that no withdrawals may
               be made from the Escrow Account without the joint signatures of
               Cobham and Westwind UK;

         (b)   each of the Sellers shall procure the delivery to the
               Purchasers of:

                                      11
<PAGE>

               (i)    duly executed transfers in favour of the relevant
                      Purchaser or its nominee(s) of all the Sale Shares shown
                      opposite its name in Schedule 1;

               (ii)   the share certificates representing such Sale Shares (or
                      an express indemnity in a form reasonably satisfactory
                      to the Purchasers in the case of any found to be
                      missing); and

               (iii)  the Tax Deed duly executed by the Sellers;

         (c)   the Sellers shall procure the delivery to the Purchasers of:

               (i)    the certificate of incorporation, common seal, minute
                      books and share certificate books of Westwind UK;

               (ii)   duly executed transfers of each share in a Subsidiary as
                      is not registered in the name of the Company or a member
                      of the Group in favour of the Purchasers or as it may
                      direct together with the relevant share certificates;
                      and

               (iii)  the resignation of Warren Tucker and Allan Cook as
                      directors of Westwind UK in each case acknowledging
                      under seal that they have no claim against any member of
                      the Group whether for loss of office or otherwise; and

         (d)   Each of the Sellers shall procure that a board meeting of the
               Companies are held at Completion at which it is resolved that:

               (i)    such persons as the Purchasers nominate are appointed as
                      additional directors and the secretary of that member of
                      the Group;

               (ii)   if relevant, the transfers referred to in paragraph (a)
                      above (subject only to their being duly stamped) are
                      approved for registration; and

               (iii)  its bank mandates are revised in such manner as the
                      Purchasers require.

8.3      Upon completion of all the matters (or waiver by the Purchasers
         thereof) referred to in clause 8.2 the Purchasers shall:

         (a)   subject to clause 11.11 pay into the Escrow Account an amount
               of (British pound)3,000,000 of the Consideration (the "Escrow
               Amount");

         (b)   pay the remainder of the Consideration to the relevant Sellers
               apportioned between them as provided in Schedule 1, such
               payment to be made by transfer of funds to Cobham receipt of
               which shall be a valid discharge of the Purchasers' obligations
               under this sub-clause;

         (c)   deliver to the Sellers a duly executed counterpart of the Tax
               Deed; and

         (d)   as evidence of the authority of each person executing a
               document referred to in this clause 8 on the Purchasers behalf
               an extract of the minutes of a duly held meeting of the
               directors of the Purchasers (or a duly constituted committee
               thereof) authorising the execution by the Purchasers of the
               document and, where such execution is authorised by a committee
               of the board of directors of the


                                      12
<PAGE>

               Purchasers, an extract of the minutes of a duly held meeting of
               the directors constituting such committee or the relevant
               extract thereof certified to be a true extract by a director or
               the secretary of the Purchasers.

8.4      If any foregoing provisions of this clause 8 is not fully complied
         with, the Purchasers, in the case of non-compliance by the Sellers,
         or the Sellers in the case of non-compliance by the Purchasers, shall
         be entitled (in addition to, and without prejudice to, all other
         rights or remedies available to it, including the right to claim
         damages) by written notice to the Sellers or, as the case may be, the
         Purchasers, served on such date:

         (a)   to elect to terminate this agreement; or

         (b)   to effect Completion so far as practicable having regard to the
               defaults which have occurred; or

         (c)   to fix a new date for Completion in which case the foregoing
               provisions of this sub-clause shall apply to Completion as so
               deferred.

9        GUARANTEES AND LOAN ACCOUNTS

9.1      The Purchasers shall use all reasonable endeavours to procure that on
         Completion, or as soon as reasonably practicable following
         Completion, each member of the Sellers' Group is released from all
         guarantees and indemnities given, if any, by it in respect of
         obligations of any of any Group Company and, pending such release,
         the Purchasers shall indemnify the Sellers (for themselves and as
         trustees on behalf of the relevant members of the Sellers' Group)
         against all liabilities under those guarantees and indemnities.

9.2      Each of the Sellers shall use all reasonable endeavours to procure
         that on Completion, or as soon as reasonably practicable following
         Completion, each of the Group Companies is released from all
         guarantees and indemnities given by it in respect of obligations of
         each Seller and/or any member of the relevant Sellers' Group and,
         pending such release, each of the Sellers shall indemnify the
         relevant member of the Group against all liabilities under those
         guarantees and indemnities.

9.3      The Purchasers shall procure that immediately on Completion the Group
         Loans representing amounts due from the Group Companies to the
         Sellers' Group are repaid on behalf of the Group Companies to Cobham
         on behalf of the relevant members of the Sellers' Group.

9.4      Cobham shall procure that immediately on Completion the Group Loans
         representing amounts due from the Sellers' Group to the Group
         Companies are repaid on behalf of the Seller's Group to the relevant
         Group Company.

9.5      The repayment of the Group Loans under this clause shall serve to
         satisfy all outstanding indebtedness between the Sellers' Group and
         the Group Companies and to release all outstanding liability between
         them.

9.6      The Purchasers shall procure that on Completion the Group Companies
         repay any indebtedness including any term loans and overdrafts (and
         interest thereon) owed by the Group Companies to Barclays Bank plc in
         respect of which any member of the Sellers' Group has provided a
         guarantee or indemnity.


                                      13
<PAGE>

10       PROTECTIVE COVENANTS

10.1     Each Seller covenants with each of the Purchasers for itself and as
         trustee for each Group Company that it shall not, and shall procure
         that no member of the Sellers' Group shall, directly or indirectly:

         (a)   for a period of five years from Completion be concerned in any
               business which is competitive with the Restricted Business, or
               any part of it, carried on by a Group Company at Completion; or

         (b)   for a period of five years from the date of this agreement,
               directly induce or attempt to induce any director (other than a
               director resigning at Completion), or employee of a Group
               Company who is in receipt of an annual gross basic salary (on
               the basis of full-time employment) in excess of (British
               pound)25,000 to leave the employment of, or relationship with,
               that Group Company or enter into any employment or services
               agreement with a Seller or a member of the Sellers' Group
               (otherwise than in response to a newspaper or trade
               advertisement); or

         (c)   make use of or (except as required by law or any competent
               regulatory body or stock exchange) disclose or divulge to any
               third party any Confidential Information of a secret or
               confidential nature relating to the business of any Group
               Company; or

         (d)   for a period of five years from Completion, carry on the
               Restricted Business or canvass or solicit orders for services
               or goods being provided by any Group Company at Completion from
               any person, firm or company who is at Completion a customer of
               any Group Company; or

         (e)   use or allow to be used any trade-mark, trade name, sign, logo
               or other Intellectual Property Rights owned by a Group Company
               at Completion or anything confusingly similar to them (but only
               in relation to the use of their own name) in any matter which
               is directly competitive with the Restricted Business.

10.2     For the purpose of this clause, a Seller is concerned in a business
         if it carries it on as a principal or agent or if it has any direct
         or indirect financial interest as a shareholder in any person who
         carries on the business. However, nothing contained in this agreement
         shall preclude or restrict any Seller from holding, as a passive
         investor and together with the holdings of all other members of the
         Sellers' Group in such company, not more than five per cent. of the
         issued share capital of any company.

10.3     The restrictions in subclause 10.1 shall not apply (or as the case
         may be shall cease to apply) insofar and to the extent that any
         member of the Sellers' Group after Completion acquires any company or
         business and, as a result of that acquisition, acquires a company or
         business which falls within the terms of the subclause 10.1 (the
         "Relevant Interest") provided that:

         (a)   the acquisition of the Relevant Interest is not the principal
               reason for such acquisition; and

         (b)   the Relevant Interest represents less than 10 per cent. of the
               total consolidated turnover of the company or business being
               acquired.

                                      14
<PAGE>

10.4     Each of the restrictions in each paragraph or sub-clause above shall
         be enforceable independently of each of the others and its validity
         shall not be affected if any of the others is invalid.

10.5     If any of those restrictions is void but would be valid if some part
         of the restrictions were deleted the restriction in question shall
         apply with such modification as may be necessary to make it valid.

10.6     The Sellers acknowledge that the above provisions of this clause are
         no more extensive than is reasonable to protect the Purchasers as the
         purchasers of the Sale Shares.

10.7     Each of the Sellers shall use all reasonable efforts for five years
         following Completion to direct to the Purchasers all future sales and
         other opportunities it receives with respect to the Restricted
         Business.

11       THE ESCROW

11.1     The Escrow Amount shall be paid at Completion into the Escrow Account
         subject to clause 11.11 and the balance of the Escrow Account from
         time to time, excluding for the avoidance of doubt amounts paid to
         the Purchasers under this clause 11, shall be held on trust for the
         Sellers absolutely.

11.2     The Escrow Amount less the aggregate sum of all paid Claims (the
         "Escrow Account Release") shall be paid from the Escrow Account to
         the Sellers in accordance with this clause 11 on the date 18 months
         after the Completion Date (provided that, however, if that day is not
         a Business Day, payment shall be made on the first day which is a
         Business Day after that date) (the "Escrow Account Release Date"),
         unless prior to the Escrow Account Release Date the Purchasers have
         given notice to the Sellers of a Claim which in the written opinion
         of a Queens Counsel which has been provided to the Sellers is more
         likely to succeed than not which as at that date is or are not
         settled (a "Potential Claim") and, in which event a sum equal to the
         Purchasers reasonably estimated amount of such Claim or Claims shall
         be retained in the Escrow Account pending settlement of such Claim or
         Claims, in which case the amount of the reasonably estimated amount
         of such Claim or Claims shall be deducted from the Escrow Account
         Release and the remaining sum (if any) after such deduction shall be
         released to the Sellers on the Escrow Account Release Date. If
         proceedings in respect of the Potential Claim have not commenced
         within six months of service of notice of that Claim, the Potential
         Claim shall be disregarded and, if a sum is held in the Escrow
         Account after the Escrow Account Release Date in respect of that
         Potential Claim, that sum shall be released to the Sellers on the
         first Business Day following expiry of the six month period.

11.3     Any sum which is retained pursuant to the Claim or Claims shall be
         paid to the Sellers on the first Business Day following settlement of
         such Claim or Claims (and if there is more than one Claim, the amount
         retained in the Escrow Account for each Claim shall be dealt with and
         released separately for this purpose forthwith upon settlement of the
         relevant Claim).

11.4     If any amount becomes due to the Purchasers in respect of a Claim
         (each an "Escrow Claim") prior to the Escrow Account Release Date as
         a result of that Escrow Claim being settled in accordance with clause
         11.5 below:

                                      15
<PAGE>

         (a)   that amount (or where the balance of the Escrow Account is less
               than that amount, that lesser amount) shall be paid to the
               Purchasers out of the Escrow Account unless otherwise recovered
               by the Purchasers from the Sellers; and

         (b)   the Sellers and the Purchasers shall promptly (and for the
               avoidance of doubt within five Business Days of the date on
               which the entitlement arises) instruct the bank holding the
               Escrow Account to pay the relevant sum referred to in clause
               11.4(a) from the Escrow Account to the Purchasers; and

         (c)   the amount of the Escrow Amount payable to the Sellers under
               clause 11.2 shall be reduced by an amount being no greater than
               the amount due to the Purchasers under any such settlement.

         For the avoidance of doubt, if the Escrow Amount otherwise payable to
         the Sellers is reduced by any amount in respect of an Escrow Claim
         paid to the Purchasers pursuant to this clause, the Purchasers shall
         not be entitled to receive the same amount from the Sellers pursuant
         to any other clause of this agreement. The Sellers' liability in
         respect of the Claims under the Warranties shall not be limited by
         the amount of money standing to the credit of the Escrow Account from
         time to time. 11.5 For the purposes of this clause 11 an Escrow Claim
         shall be regarded as settled if:

         (a)   the Sellers and the Purchasers shall so agree in writing; or

         (b)   a court has awarded judgement in respect of the Escrow Claim
               and the period for lodging an appeal has expired without an
               appeal having been lodged or no appeal is possible; or

         (c)   a Tax Authority has given its final determination in respect of
               any tax issue which is the subject of a Claim and that
               determination is not being appealed under clause 6 of the Tax
               Deed; or

         (d)   the Escrow Claim is withdrawn; or

         (e)   the Sellers are not, or are no longer, liable in respect of the
               Claim under the provisions of this agreement or the Tax Deed.

11.6     Interest on the Escrow Account shall accrue from time to time on the
         balance of the amounts standing to the credit of the Escrow Account
         and shall be paid monthly to the Sellers.

11.7     When an amount of the principal monies in the Escrow Account is paid
         to the Purchasers or the Sellers in accordance with the provisions of
         this agreement, interest earned or accrued on such amount which has
         not been paid out pursuant to clause 11.6 shall be paid to the
         Sellers, at the time of payment of such amount.

11.8     The Sellers and the Purchasers shall procure the payment of all
         amounts from the Escrow Accounts in accordance with this agreement.

11.9     If, in the event of a dispute between the Purchasers and the Sellers
         in respect of any payment due under this clause 11, payment may only
         then be made in accordance with an order of a court of competent
         jurisdiction and on the making of such order the Purchasers and
         Sellers shall give instructions to effect such transfer.

                                      16
<PAGE>

11.10    The Sellers and the Purchasers acknowledge that any disputes between
         them in relation to the Escrow Account shall be dealt with in
         accordance with the provisions of this agreement.

11.11    In the event that the Escrow Account is not properly established at
         Completion the Escrow Amount will be held in the client account of
         Allen & Overy to the Sellers' order pending the proper establishment
         of the Escrow Account. The parties will use their best endeavours to
         establish the Escrow Account forthwith after Completion and as soon
         as is practical after the proper establishment of the Escrow Account,
         the Sellers will procure that the Escrow Amount is paid into the
         Escrow Account from the Allen & Overy client account.

12       ANNOUNCEMENTS AND CONFIDENTIALITY

12.1     No party shall make or permit any person connected with it to make
         any announcement concerning this sale and purchase or any ancillary
         matter referred to in clause 12.2 before, on or after Completion
         except with the prior written approval of the Sellers (in the case of
         an announcement by the Purchasers) and the Purchasers (in the case of
         an announcement by the Sellers), such approval not to be unreasonably
         withheld or delayed.

12.2     The ancillary matters referred to in clause 12.1 include all
         information received or obtained as a result of entering into, or
         performing, this agreement which relates to:

         (a)   the provisions of this agreement;

         (b)   the discussion or negotiations relating to this agreement;

         (c)   the subject matter of this agreement; or

         (d)   the other parties or their group undertakings,

         not being information for which provision is made in clause 12.3.

12.3     Clauses 12.1 and 12.2 shall not prevent the disclosure of
         information:

         (a)   to the extent required by law or regulation or stock exchange
               but in those circumstances the party required to make such
               disclosure shall give to the other parties prompt written
               notice where practicable and lawful to do so before it occurs
               so that such disclosure shall be made after consultation with
               the other parties (so far as is reasonably practicable) and
               after taking into account (to the extent reasonably
               practicable) the reasonable requirements of the other parties
               as the timing, contents and manner of making or dispatch or so
               that such other parties shall have sufficient opportunity to
               avoid disclosure through appropriate legal means;

         (b)   to the extent that the information is in or comes into the
               public domain other than as a result of a breach of any
               undertaking or duty of confidentiality by any person; or

         (c)   to professional advisers, to the extent required for the
               purpose of the businesses of the person providing it or the
               Group Companies and subject to equivalent undertakings of
               confidentiality or to a tax authority in connection with the
               tax affairs of the disclosing party or a member of its group.

                                      17
<PAGE>

12.4     Notwithstanding the foregoing, the parties (and each employee,
         representative, or other agent of the parties) may disclose to any
         and all persons, without limitation of any kind, the tax treatment
         and the tax structure of the transaction and all materials of any
         kind (including opinions and other tax analyses) that are provided to
         the parties relating to the tax treatment and tax structure,
         beginning on the earliest of (i) the date of the public announcement
         of discussions relating to the transaction, (ii) the date of public
         announcement of the transaction, or (iii) the date of the execution
         of an agreement (with or without conditions) to enter into the
         transaction, provided, however, that none of the parties (nor any
         employee, representative or other agent thereof) may disclose any
         other information that is not relevant to understanding the tax
         treatment and tax structure of the transaction (including if not
         relevant to understanding the tax treatment and tax structure of the
         transaction, the identity of any party and any information that could
         lead another to determine the identity of any party), or any other
         information to the extent that such disclosure could reasonably
         result in a violation of any applicable securities law.

13       INTEREST

If       any sum due for payment under this agreement is not paid on the due
         date the party in default shall pay interest on that sum from the due
         date until the date of actual payment calculated on a day to day
         basis at a rate equal to the aggregate of 2 per cent. per annum above
         the base rate of Barclays Bank PLC for the time being unless
         expressly provided to the contrary in this agreement.

14       NOTICES

14.1     Any notice or other communication to be given under this agreement
         shall be in writing and signed by or on behalf of the party giving it
         and may be served by delivering it by hand or sending it by facsimile
         (with a confirmatory postal notice) to the address and for the
         attention of the relevant party set out in this clause 14 (or
         otherwise notified from time to time hereunder). Any notice so served
         shall be deemed received:

         (a)   in the case of delivery by hand, when delivered; and

         (b)   in the case of facsimile, 12 hours after the time of dispatch
               subject to confirmation of its transmission being recorded by
               the sender's fax machine and the dispatch of the postal
               confirmation within 24 hours thereafter.

         Provided that any such notice or communication which would otherwise
         be deemed to be given or made outside working hours shall be deemed
         to be given or made at the start of working hours in London on the
         following Business Day.

14.2     The addresses of the parties for the purpose of this clause 14 are as
         follows:

         The Sellers:
         -----------

                               C/o Cobham plc,
                               For the attention of: the Company Secretary

         Address:              Brook Road, Wimborne, Dorset BH21 2BJ, England

                                      10
<PAGE>

         Fax:                  +44 (0) 1202 840 523

         Required copy to:     Allen & Overy
                               One New Change, London EC4M 9QQ
                               For the attention of: Richard Browne

         Fax:                  +44 (0) 20 7330 9999


         The Purchasers:

                               GSI Lumonics Inc.,
                               For the attention of: Tammy Ghanem,
                                                     General Counsel

         Address:              39 Manning Road, Billerica, MA 01821, USA

         Fax:                  001 978 663 9466

         Required copy to:     Skadden, Arps, Slate, Meagher & Flom (UK) LLP
                               40 Bank Street, Canary Wharf, London E14 5DS
                               For the attention of: Allan Murray-Jones

         Fax:                  +44 (0) 20 7519 7199

14.3     In proving service it shall be sufficient to prove that the envelope
         containing the notice or communication was properly addressed and
         delivered to the address shown thereon, or that the facsimile
         transmission was made after obtaining in person or by telephone
         appropriate evidence of the addressee having received the same.

14.4     Any of the Sellers or the Purchasers may notify the other of any
         change to its name, address or facsimile number for the purpose of
         this clause 14, provided that such notice shall only be effective on:

         (a)   the date specified in the notice as the date on which the
               change is to take effect; and

         (b)   if no date is so specified or the date specified is less than
               three Business Days after which such notice was given (or
               deemed to be given) the day following three Business Days after
               the notice was given or deemed to be given.

15       RESOLUTIONS AND WAIVERS

15.1     In relation to each Group Company the Sellers shall procure the
         convening of all meetings, the giving of all waivers and consents and
         the passing of all resolutions as are necessary under the Companies
         Act 1985 or applicable law, or such Group Company articles of
         association, by-laws or equivalent documents and each shall procure
         the giving of all waivers or consents as are necessary under any
         other agreement or obligation affecting it, in any such case to vest
         the Sale Shares in the Purchasers (including, without limitation,
         voting to remove any director who does not approve the transfer of
         the Sale Shares).

                                      19
<PAGE>

15.2     Each of the Sellers waives, (and shall procure the waiver by his
         nominee(s) of) all rights of pre-emption which he (or such
         nominee(s)) may have (whether under the Companies articles of
         association, by-laws or equivalent documents or otherwise) in respect
         of the transfer to the Purchasers or their nominee(s) of the Sale
         Shares or any of them.

16       GENERAL

16.1     Each of the obligations, covenants, Warranties and undertakings given
         to the Purchasers set out in this agreement and the Tax Deed which is
         not fully performed at Completion shall not be affected by
         Completion, except to the extent waived or released by a specific and
         duly authorised written waiver or release by the Purchasers.

16.2     Unless otherwise expressly stated all payments to be made under this
         agreement shall be made in sterling to such account as the receiving
         party directs by notice to the paying party.

16.3     None of the rights or obligations under this agreement may be
         assigned or transferred without the prior written consent of all of
         the parties except that the Purchasers may assign the benefit of this
         agreement (in whole or in part) to another member of the Purchasers'
         Group subject to the assignee agreeing, for the benefit of the
         Sellers, not to assign the benefit of this agreement (in whole or in
         part) and provided that if the assignee ceases to be a member of the
         Purchasers' Group then immediately prior to such event all rights
         assigned to that assignee shall be deemed to have been transferred
         back to the assigning Purchaser. No such assignment shall result in
         any increased liability to any Seller.

16.4     Any time, date or period referred to in this agreement may be
         extended by mutual agreement in writing between the Purchasers and
         the Sellers but as regards any time, date or period originally fixed
         or so extended, time shall be of the essence.

16.5     Each party shall pay the costs and expenses incurred by it in
         connection with the entering into and completion of this agreement
         including without limitation fees of solicitors, financial advisers
         and accountants.

16.6     This agreement may be executed in any number of counterparts, all of
         which taken together shall constitute one and the same agreement and
         any party may enter into this agreement by executing a counterpart.

16.7     Except in respect of the rights of the directors of the Group
         Companies under clause 4.4 a person who is not a party to this
         agreement may not enforce any of its terms under the Contracts
         (Rights of Third Parties) Act 1999. The consent of any person who is
         not a party to this agreement shall not be required to amend or
         terminate this agreement.

16.8     If any term in this agreement shall be held to be illegal, invalid or
         unenforceable, in whole or in part, under any enactment or rule of
         law, such term or part shall to that extent be deemed not to form
         part of this agreement but the legality, validity or enforceability
         of the remainder of this agreement shall not be affected.

16.9     No variation of this agreement shall be effective unless in writing
         and signed by or on behalf of each of the parties to this agreement.

16.10    The Purchasers shall not be entitled to rescind this agreement after
         Completion in any circumstances.

                                      20
<PAGE>

17       WHOLE AGREEMENT

17.1     This agreement and the documents referred to in it to be executed by
         one or more of the parties in connection with the Transaction contain
         the whole agreement between the parties relating to the transactions
         contemplated by this agreement and supersede all previous agreements
         between the parties relating to these transactions.

17.2     Each of the parties acknowledges that in agreeing to enter into this
         agreement it has not relied on any representation, warranty,
         collateral contract or other assurance (except those warranties
         expressly set out in this agreement) made by or on behalf of any
         other party before the signature of this agreement including, without
         limitation, during the course of negotiating this agreement. Each of
         the parties waives all rights and remedies which, but for this
         clause, might otherwise be available to it in respect of any such
         representation, warranty, collateral contract or other assurance,
         provided that nothing in this clause shall limit or exclude any
         liability for fraud.

18       GOVERNING LAW

18.1     This agreement is governed by, and shall be construed in accordance,
         with English law.

18.2     Each of the parties submits to the exclusive jurisdiction of the
         English courts for all purposes relating to this agreement.

18.3     FRH hereby irrevocably appoints Cobham as its agent to accept service
         of process in England in any legal action or proceedings arising out
         of this agreement, service upon whom shall be deemed completed
         whether or not forwarded to or received by FRH. FRH shall promptly
         notify the Purchasers, in writing, of any change of address of its
         process agent within 25 days. If such process agent ceases to be able
         to act as such or to have an address in England, FRH irrevocably
         undertakes to appoint a new process agent in England reasonably
         acceptable to the Purchasers and to deliver to the Purchasers as soon
         as practicable a copy of a written acceptance of appointment by the
         new process agent.

18.4     The US Purchaser, hereby irrevocably appoints the UK Purchaser as its
         agent to accept service of process in England in any legal action or
         proceedings arising out of this agreement, service upon whom shall be
         deemed completed whether or not forwarded to or received by the US
         Purchaser. The US Purchaser, shall promptly notify the Sellers, in
         writing, of any change of address of its process agent within 25
         days. If such process agent ceases to be able to act as such or to
         have an address in England, the US Purchaser, irrevocably undertakes
         to appoint a new process agent in England reasonably acceptable to
         the Sellers and to deliver to the Sellers as soon as practicable a
         copy of a written acceptance of appointment by the new process agent.

18.5     Nothing in this agreement shall affect the right to serve process in
         any other manner permitted by law.

18.6     The parties waive any objection to the English courts on grounds that
         they are an inconvenient or inappropriate forum to settle any such
         dispute.

18.7     Each party waives any right it may have to a jury trial of any claim
         or cause of action in connection with this agreement. This agreement
         may be filed as a written consent to trial by court.

                                      21
<PAGE>

19       SELLERS' REPRESENTATIVE

19.1     Each Seller hereby authorises Cobham to take any action and receive
         all notices on its behalf as anticipated pursuant to this Agreement.

19.2     Each Seller agrees:

        (i)    to indemnify the Sellers' Representative in respect of any loss,
               claim or expense incurred by the Sellers' Representative arising
               from acts taken by him pursuant to clause 19.1; and

        (ii)   to hold harmless the Sellers' Representative in respect of any
               loss, claim or expense incurred by the Sellers' Representative
               from acts taken by him pursuant to clause 19.1 or omission in
               each case or on an after-tax basis.

AS WITNESS the hands of the parties or their duly authorised officers on the
date first written on page 1 of this agreement.


                                      22
<PAGE>



SIGNED BY                                   )   /s/ Warren Tucker
COBHAM PLC                                  )   Warren Tucker
acting by a duly authorised representative  )
in the presence of:-                        )   /s/  Alun Eynon-Evans
                                                Alun Eynon-Evans



SIGNED BY                                   )   /s/ Warren Tucker
FR HOLDINGS INC                             )   Warren Tucker
acting by a duly authorised representative  )
in the presence of:-                        )   /s/  Alun Eynon-Evans
                                                Alun Eynon-Evans



SIGNED BY                                   )   /s/ Warren Tucker
LOCKMAN INVESTMENTS LIMITED                 )   Warren Tucker
acting by a duly authorised representative  )
in the presence of:-                        )   /s/  Alun Eynon-Evans
                                                Alun Eynon-Evans



SIGNED BY                                   )   /s/ Charles Winston
GSI LUMONICS LIMITED                        )   Charles Winston
acting by a duly authorised representative  )
in the presence of:-                        )   /s/ Paul Criswell Esq.
                                                Paul Criswell Esq.



SIGNED BY                                   )   /s/  Charles Winston
GSI LUMONICS, CORPORATION                   )   Charles Winston
acting by a duly authorised representative  )
in the presence of:-                        )   /s/ Mona Bieler
                                                Mona Bieler


                                      23
<PAGE>



                                                               Exhibit 99.1

                                 PRESS RELEASE


GSI Lumonics Announces Acquisition of Westwind Air Bearings

Billerica, MA (December 10, 2003) GSI Lumonics Inc. (Nasdaq: GSLI and TSX:
LSI) has completed the acquisition of Westwind Air Bearings Limited,
(Westwind), its subsidiaries and outstanding shares from Cobham plc, an
English company. The all-cash purchase price was (British pound)21,250,000 or
approximately US$37million.

With over thirty years of experience, Westwind Air Bearings is widely
recognized as the world leader in the design, manufacture and supply of high
precision rotary motion components based on its proprietary air bearing
spindle technology. This technology provides enabling components in several
key markets for GSI Lumonics, including PCB drilling, semiconductor
manufacturing, optical scanning, and imaging for both medical and
reprographics.

Charles Winston, GSI Lumonics' President and Chief Executive Officer said,
"The Westwind acquisition is consistent with the Company's stated strategy of
expanding its product lines and technology in the laser and precision motion
components business groups. Westwind's high precision rotary motion technology
and products strengthen our position in the electronics manufacturing and
optical scanning markets at a time when these markets are recovering. It is
expected that this acquisition will be accretive to earnings during 2004".

About Westwind:
     o    Annual revenues: (British pound)15M or approximately US$23 million
          in 2002. The Company expects revenues to be approximately US$31
          million for the full year 2003, based on present performance.
     o    Net assets:(British pound)16M or approximately US$26 million in 2002.
     o    Location: Principal operations are based in Poole, England. It has a
          manufacturing and service facility in Shuzhou China and sales and
          service offices in the United States and Japan.
     o    Workforce: 350 employees.

GSI Lumonics will host a conference call for investors to discuss this
acquisition at 6 p.m. EST on Wednesday, December 10, 2003. To participate,
call 800-901-5231 (within the US and Canada) no earlier than 5:50 p.m. EST and
no later than 5:55 p.m. EST and identify yourself to the operator with the
participant code 46557792. For international callers, call 617-786-2961 with
the same participant code. A replay of the call will be available from one
hour after the call ends to midnight, December 28, 2003 at 888-286-8010. For
international callers, the replay is available at 617-801-6888. The access
code is 48981410.

The conference call also will be broadcast live over the Internet in
listen-only mode. For live webcasting, go to:
http://www.firstcallevents.com/service/ajwz394813945gf12.html at least 15
minutes prior to the call in order to register, download and install any
necessary software. The call will be archived on the above web site until
midnight, December 28, 2003.

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

GSI Lumonics supplies precision motion control components, lasers and
laser-based advanced manufacturing systems to the global medical,
semiconductor, electronics, and industrial markets. GSI Lumonics' common
shares are listed on Nasdaq (GSLI) and The Toronto Stock Exchange (LSI).

Certain statements in this news release may constitute forward-looking
statements within the meaning of the United States Private Securities
Litigation Reform Act of 1995, Section 27A of the United States Securities Act
of 1933 and Section 21E of the United States Securities Exchange Act of 1934.
These forward-looking statements may relate to anticipated financial
performance, management's plans and objectives for future operations, business
prospects, outcome of regulatory proceedings, market conditions, tax issues
and other matters. All statements contained in this news release that do not
relate to matters of historical fact should be considered forward-looking
statements, and are generally identified by words such as "anticipate,"
"believe," "estimate," "expect," "intend," "plan," "objective" and other
similar expressions. Readers should not place undue reliance on the
forward-looking statements contained in this news release. Such statements are
based on management's beliefs and assumptions and on information currently
available to management and are subject to risks, uncertainties and changes in
condition, significance, value and effect. Other risks include the fact that
the Company's sales have been and are expected to continue to be dependent
upon customer capital equipment expenditures, which are, in turn, affected by
business cycles in the markets served by those customers. Other factors
include volatility in the semiconductor industry, the risk of order delays and
cancellations, the risk of delays by customers in introducing their new
products and market acceptance of products incorporating subsystems supplied
by the Company, similar risks to the Company of delays in its new products,
our ability to continue to reduce costs and capital expenditures, our ability
to focus R&D investment and other risks detailed in reports and documents
filed by the Company with the United States Securities and Exchange Commission
and with securities regulatory authorities in Canada. Such risks,
uncertainties and changes in condition, significance, value and effect, many
of which are beyond the Company's control, could cause the Company's actual
results and other future events to differ materially from those anticipated.
The Company does not, however, assume any obligation to update these
forward-looking statements to reflect actual results, changes in assumptions
or changes in other factors affecting such forward-looking statements.

For more information contact:
Investor Relations, 613-224-4868, Ann Dempsey, (ext. 5632)
[{"type": "8-K", "sequence": "1", "filename": "lon295756.txt", "description": "8-K", "secsgml_size_bytes": 87284}]
{"company-data": {"conformed-name": "GSI LUMONICS INC", "cik": "0001076930", "assigned-sic": "3559", "irs-number": "980110412", "state-of-incorporation": "A3", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-25705", "film-number": "031047776"}, "business-address": {"street1": "39 MANNING ROAD", "street2": ".", "city": "BILLERICA", "state": "MA", "zip": "01821", "phone": "978-439-5511"}, "mail-address": {"street1": "39 MANNING ROAD", "street2": ".", "city": "BILLERICA", "state": "MA", "zip": "01821"}, "former-company": [{"former-conformed-name": "GSI LUMONICS", "date-changed": "19990331"}, {"former-conformed-name": "LUMONICS INC", "date-changed": "19990115"}]}
SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 8-K

                                CURRENT REPORT
                    PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

       DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) December 10, 2003
                                                       (December 10, 2003)

                               GSI Lumonics Inc.
              -------------------------------------------------
              (Exact Name of Registrant as Specified in Charter)

New Brunswick, Canada             000-25705                98-0110412
------------------------------------------------------------------------------
(State or Other                   (Commission              (IRS Employer
Jurisdiction of                   File Number)             Identification No.)
Incorporation)

39 Manning Road, Billerica, Massachusetts                          01821
------------------------------------------------------------------------------
(Address of Principal Executive Offices)                       (Zip Code)

       Registrant's Telephone Number, including area code (978) 439-5511
                                                          --------------

                                      N/A
         ------------------------------------------------------------
         (Former Name or Former Address, if Changed Since Last Report)

ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS.
------   ------------------------------------

         On December 10, 2003, GSI Lumonics Corporation completed the purchase
of the whole of the issued share capital of Westwind Air Bearings Inc. from FR
Holdings Inc. and GSI Lumonics Limited completed the purchase of the whole of
the issued share capital of Westwind Air Bearings Limited from Cobham Plc and
Lockman Investments Limited. Both GSI Lumonics Corporation and GSI Lumonics
Limited are wholly owned subsidiaries of GSI Lumonics Inc. The purchase price
was (British pound) 21,250,000 in cash. The amount of the consideration was
determined through arm's length negotiations between the parties and was
financed out of available cash and investments at hand. Both Westwind Air
Bearings Limited and Westwind Air Bearings Inc. are involved in the design,
manufacture and supply of products using air bearing technology.

         Copies of the sale and purchase agreement, dated December 10, 2003,
relating to the above, and the press release are attached hereto as exhibits
2.1 and 99.1 respectively.
ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.
------   ---------------------------------

(a)      Financial Statements of Business Acquired. Not applicable.

(b)      Pro Forma Financial Information. Not applicable.

(c)      Exhibits. The following exhibits are furnished in accordance with the
provisions of Item 601 of Regulation S-K.

Exhibit No.             Description
-------------           -----------
2.1                   Agreement for the sale and purchase of the whole of the
                      issued share capital of Westwind Air Bearings Limited
                      and Westwind Air Bearings Inc. among Cobham plc, FR
                      Holdings Inc., Lockman Investments Limited, GSI Lumonics
                      Limited and GSI Lumonics, Corporation, dated December 10,
                      2003. GSI Lumonics Inc. agrees to furnish supplementally
                      any omitted schedule to the Commission upon request.

99.1                  Press release issued by GSI Lumonics Inc., dated
                      December 10, 2003.
SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                         GSI Lumonics Inc.
                                         (Registrant)

                                         By:  /s/ Thomas R. Swain
                                             ---------------------------------
                                         Name:  Thomas R. Swain
                                         Title: Vice President of Finance and
                                                Chief Financial Officer

Dated: December 10, 2003

                                 EXHIBIT INDEX
                                 -------------

Exhibit
-------

2.1                   Agreement for the sale and purchase of the whole of the
                      issued share capital of Westwind Air Bearings Limited
                      and Westwind Air Bearings Inc.

99.1                  Press release issued by GSI Lumonics Inc., dated
                      December 10, 2003.
Exhibit 2.1

                                                                EXECUTION COPY

                          DATED    10 DECEMBER 2003

                                   COBHAM plc

                                     - and -

                                FR HOLDINGS INC.

                                     - and -

                           LOCKMAN INVESTMENTS LIMITED

                                     - and -

                              GSI LUMONICS LIMITED

                                     - and -

                            GSI LUMONICS, CORPORATION

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

                                    AGREEMENT

                          for the sale and purchase of
                      the whole of the issued share capital
                      of Westwind Air Bearings Limited and
                           Westwind Air Bearings Inc.

          ------------------------------------------------------------
CONTENTS
Clause                                                                  Page

1     INTERPRETATION.....................................................2
2     SALE AND PURCHASE OF THE SALE SHARES...............................5
3     CONSIDERATION......................................................5
4     SELLERS' WARRANTIES................................................5
5     LIMITATIONS OF LIABILITY...........................................7
6     PURCHASERS' WARRANTIES............................................10
7     TAX DEED..........................................................11
8     COMPLETION........................................................11
9     GUARANTEES AND LOAN ACCOUNTS......................................13
10    PROTECTIVE COVENANTS..............................................14
11    THE ESCROW........................................................15
12    ANNOUNCEMENTS AND CONFIDENTIALITY.................................17
13    INTEREST..........................................................18
14    NOTICES...........................................................18
15    RESOLUTIONS AND WAIVERS...........................................19
16    GENERAL...........................................................20
17    WHOLE AGREEMENT...................................................21
18    GOVERNING LAW.....................................................21
19    SELLERS' REPRESENTATIVE...........................................22

Schedule
1     SALES SHARES AND CONSIDERATION......................................
2     PARTICULARS OF THE COMPANIES........................................
3     PARTICULARS OF THE SUBSIDIARIES.....................................
4     PROPERTIES..........................................................
5     WARRANTIES..........................................................

Documents to accompany agreement:

(1)   Disclosure Letter
(2)   Tax Deed

                                       (i)
THIS AGREEMENT is made on           10 December 2003

BETWEEN:

(1)      COBHAM plc, a company incorporated under the laws of England and Wales
         registered under number 30470, whose registered office is at Brook
         Road, Wimborne, Dorset BH21 2BJ, England ("Cobham");

(2)      FR HOLDINGS, INC., a corporation incorporated under the laws of
         Delaware, USA with number 0912214 whose registered office is c/o The
         Corporation Trust Company, Corporation Trust Center, 1209 Orange
         Street, Wilmington, Delaware 19801, USA ("FRH");

(3)      LOCKMAN INVESTMENTS LIMITED, a company incorporated under the laws of
         England and Wales registered under number 675211, whose registered
         office is at Brook Road, Wimborne, Dorset BH21 2BJ, England
         ("Lockman", and together with Cobham and FRH, the "Sellers");

(4)      GSI LUMONICS LIMITED, a company incorporated under the laws of
         England and Wales registered under number 01041317 whose registered
         office is at Cosford Lane, Swift Valley, Rugby, Warwickshire CV21
         1QN, England ("UK Purchaser"); and

(5)      GSI LUMONICS, CORPORATION, a corporation incorporated under the laws
         of Michigan USA whose principal offices are at 39 Manning Road,
         Billerica, Massachusetts, MA 01821, USA (the "US Purchaser") and,
         together with the UK Purchaser, the "Purchasers").

WHEREAS:

(A)      Westwind Air Bearings Limited ("Westwind UK") is a private company
         limited by shares short particulars of which are set out in Part A of
         Schedule 2 having an authorised capital of (British pound)25,890,225
         and US$5,000 divided into 500,000 deferred shares of (British pound)1
         each, 4,920,000 unclassified shares of (British pound)1 each,
         8,693,225 9% non-redeemable cumulative preference shares of (British
         pound)1 each, 11,777,000 6.3% redeemable cumulative preference shares
         of (British pound)1 each and 500,000 ordinary shares of US$0.01 each
         of which 500,000 deferred shares, 11,777,000 6.3% redeemable
         cumulative preference shares and 25,000 ordinary shares have been
         issued fully paid or credited as fully paid ("Westwind UK Shares").

(B)      Westwind Air Bearings Inc. ("Westwind US") is a corporation short
         particulars of which are set out in Part B of Schedule 2 having an
         authorised capital of US$10 divided into 1,000 shares of US$0.01 each
         100 of which have been issued ("Westwind US Shares").

(C)      Each of the Sellers wishes to sell the Sale Shares (as defined below)
         set opposite its name in Schedule 1 and the UK Purchaser wishes to
         purchase the Westwind UK Shares and the US Purchaser wishes to
         purchase the Westwind US Shares, in each case, on the terms set out
         in this agreement.

                                       1
IT IS AGREED as follows:

1        INTERPRETATION

1.1      In this agreement:

         "Accounts" means the audited balance sheet as at the Accounts Date and
         audited profit and loss account for the period of 12 months ended on
         that date of each of the Group Companies (other than Westwind Air
         Bearings (Suzhou) Co., Ltd., and Westwind US) and in each case the
         notes, statements and directors' reports relating to them;

         "Accounts Date" means 31 December, 2002;

         "Business Day" means a day on which banks are open for business in
         London and New York (excluding Saturdays, Sundays and public holidays);

         "Claim" means any claim made by any of the Purchasers against any of
         the Sellers for breach of Warranty or under the Tax Deed;

         "Companies" means Westwind UK and Westwind US and "Company" means
         each or both of them (as the case may be);

         "Completion" means completion of the sale and purchase of the Sale
         Shares in accordance with clause 8;

         "Completion Date" means the date of this agreement;

         "Confidential Information" means business, technical, financial,
         operational, administrative, staff management, marketing and economic
         information relating primarily to the Group, the identities of
         customers and all other information of a secret and/or proprietary
         nature relating to the Group but shall not include such information
         relating to the Group which is in, or which comes into, the public
         domain or a party's possession other than as a result of (i) a breach
         of any obligations imposed by this agreement or (ii) a breach of any
         other duty of confidentiality relating to that information;

         "Consideration" means the aggregate consideration payable in respect
         of all of the Sale Shares;

         "Disclosure Letter" means the letter relating to the Warranties of the
         same date as this agreement from the Sellers' to the Purchasers,
         receipt of which has been acknowledged by the Purchasers;

         "Escrow Account" means the account in the joint names of Cobham and
         Westwind UK in which the Escrow Amount is held;

         "Escrow Amount" has the meaning given in clause 8.3(a);

         "Group Companies" means each of the Companies and the Subsidiaries
         and "Group Company" means any of them;

         "Group Loans" means any indebtedness by way of borrowing, including
         accrued interest thereon, between the Sellers' Group and the Group
         Companies;

                                       2
"Information Technology" means all material computer systems (including
         software and hardware) owned by or licensed to the Group Companies;

         "Intellectual Property Rights" means (i) copyright, patents, know-how,
         trade secrets, database rights, and rights in trade-marks and designs
         (whether registered or unregistered), (ii) applications for
         registration (including all corresponding foreign counterpart
         applications, re-issues, re-examinations, divisionals, continuations,
         continuations-in-part and extensions thereof) and the right to apply
         for registration, for any of the same, and (iii) all other intellectual
         property rights and equivalent or similar forms of protection existing
         anywhere in the world;

         "Liens" means any liens, pledges, encumbrances, charges (fixed or
         floating), mortgages, third party claims, debentures, options, rights
         of pre-emption, rights to acquire, assignment by way of security,
         trust arrangement for the purpose of providing security or security
         interests of any kind, including retention arrangements or other
         encumbrances and any agreement to create the foregoing;

         "Planning Acts" means the Town and Country Planning Act 1990, the
         Planning (Listed Buildings and Conservation Areas) Act 1990, the
         Planning (Hazardous Substances) Act 1990, the Planning (Consequential
         Provisions) Act 1990 and the Planning and Compensation Act 1991;

         "Properties" means properties specified in schedule 4 and "Property"
         means any of them and includes every part of each of them;

         "Purchasers' Group" means each of the Purchasers and their group
         undertakings (including each Group Company) at the date of this
         agreement;

         "Restricted Business" means the design, manufacture and supply of
         products and services using air bearing technology;

         "Sale Shares" means the Westwind UK Shares and the Westwind US Shares
         referred to in Schedule 1;

         "Sellers' Group" means the Sellers and their group undertakings
         (except the Group Companies) at the date of this agreement;

         "Sellers' Representative" means Cobham or any alternative
         representative from time to time notified to the Purchasers in
         accordance with this agreement;

         "Senior Employee" means an employee of any Group Company who is in
         receipt of an annual gross basic salary (on the basis of full-time
         employment) in excess of (British pound)50,000;

         "Subsidiaries" means all the companies details of which are set out
         in Schedule 3 and "Subsidiary" means any of them;

         "TCGA" means Taxation of Chargeable Gains Act 1992;

         "Taxation" or "Tax" has the meaning given to it in the Tax Deed;

         "Tax Authority" has the meaning given to it in the Tax Deed;

                                       3
"Tax Claim" means any claim by any of the Purchasers against any of
         the Sellers pursuant to the Tax Deed or for breach of the Tax
         Warranties;

         "Tax Deed" means the tax deed dated the date of this agreement
         between the Sellers and the Purchasers;

         "Taxes Act" means Income and Corporation Taxes Act 1988;

         "Tax Warranties" means those warranties in Part D of Schedule 5;

         "Transaction" means the acquisition by each of the Purchasers of the
         relevant Sale Shares;

         "UK GAAP" means generally accepted accounting principles and
         practices in the United Kingdom;

         "VATA" means the Value Added Tax Act 1994;

         "Warranties" means the warranties contained in Schedule 5 and
         "Warranty" means anyone of them; and

         "Warranty Claim" means any claim by the Purchasers in connection with
         the Warranties.

1.2      In this agreement any reference, express or implied, to an enactment
         includes references to:

         (a)   that enactment as amended, extended or applied by or under any
               other enactment (before or after signature of this agreement);

         (b)   any enactment which that enactment re-enacts (with or without
               modification); and

         (c)   any subordinate legislation made (before or after signature of
               this agreement) under any enactment, as re-enacted, amended,
               extended or applied as described in paragraph (a) above, or
               under any enactment referred to in paragraph (b) above;

         and "enactment" includes any legislation in any jurisdiction.

1.3      Where any expression is qualified by the expression "so far as the
         Sellers are aware" or to "the Sellers' knowledge, information and
         belief" or any similar expression that statement shall be deemed to
         be made on the basis of the actual knowledge of Warren Tucker and
         Allan Cook and the knowledge those persons would have if they had
         made reasonable enquiry of the following persons in relation to the
         following areas: Steve Webb (all areas), Chris Roberts (all areas),
         Steve Ratcliffe (Part 1 and sections A, B and C of Part 2 of Schedule
         5), Chris Watford (section F of Part 2 of Schedule 5) and Ken
         Morrison (section D of Part 2 of Schedule 5).

1.4      Words denoting persons shall include bodies corporate and
         unincorporated associations of persons and a reference to a person
         includes that person's legal personal representatives, successors and
         permitted assigns.

1.5      Terms defined in the Companies Act 1985, as amended, shall have the
         same meanings herein.

                                       4
1.6      In this agreement a reference to a clause, paragraph or schedule,
         unless the context otherwise requires, is a reference to a clause,
         paragraph or schedule to this agreement.

1.7      In this agreement, a reference to times of the day is to London time.

1.8      In construing this agreement the so-called "ejusdem generis" rule
         does not apply and accordingly the interpretation of general words is
         not restricted by (i) being preceded by words indicating a particular
         class of acts, matters or things; or (ii) being followed by
         particular examples.

1.9      Clauses 1.1 to 1.8 apply unless the contrary intention appears.

1.10     The headings in this agreement do not affect its interpretation.

2        SALE AND PURCHASE OF THE SALE SHARES

2.1      Subject as provided in this agreement, each of the Sellers shall
         sell, with full title guarantee on the terms that the same shall be
         sold free from all Liens or other third party rights of any nature
         whatsoever, the Sale Shares set opposite its name in Schedule 1, and
         each of the Purchasers agrees to purchase the Sale Shares set
         opposite its name in Schedule 1, together with all rights attaching
         to them at the date of Completion.

2.2      From and after Completion, each of the Purchasers shall be entitled
         to exercise all rights which are attached or accruing to the Sale
         Shares set out opposite its name in Schedule 1 including, without
         limitation, the right to receive all dividends, distributions or any
         return of capital declared, made or paid with effect from Completion.

2.3      Each Seller covenants that, on or after Completion, it will, at its
         own cost and expense, execute and do (or procure to be executed and
         done by and other necessary party) all such deeds, documents, acts
         and things as the Purchasers may from time to time require in order
         to vest any of the Sale Shares in the Purchasers or their nominees
         which are nominated in accordance with clause 8.

2.4      The Purchasers and Sellers shall not be obliged to complete the
         purchase or sale of any of the Sale Shares unless the purchase and
         sale of all the Sale Shares is completed simultaneously in accordance
         with this agreement.

3        CONSIDERATION

3.1      The Consideration for the sale and purchase of the Sale Shares shall
         be the sum of(British pound)21,250,000 to be paid in cash in
         accordance with clause 8 and apportioned between the Sellers as
         provided in Schedule 1.

3.2      If any payment is made by a Seller to the Purchasers under or in
         respect of any breach of any provision of this agreement (including
         any payment pursuant to any Claim, including a Tax Claim) the payment
         shall so far as possible be treated as a reduction in the
         Consideration and the Consideration shall accordingly be reduced by
         the amount of such payment.

4        SELLERS' WARRANTIES

4.1      Each Seller jointly and severally warrants to each of the Purchasers
         that:

                                      5
(a)   each of the statements set out in Part 1 of Schedule 5 is true
               and accurate in respect of such Seller and the Sale Shares set
               opposite its name in Schedule 1; and

         (b)   except as fairly disclosed in the Disclosure Letter, each of
               the statements set out in Part 2 of Schedule 5 is true and
               accurate.

4.2      Each of the Warranties set out in the several paragraphs of Schedule
         5 is separate and independent and, except as expressly provided to
         the contrary in this agreement, is not limited:

         (a)   by reference to any other paragraph of Schedule 5; or

         (b)   by anything in this agreement or the Tax Deed or any other
               document referred to herein (other than the Disclosure Letter).

4.3      Each of the Sellers agrees with the Purchasers (for itself and as
         trustee for each Group Company) to waive any rights or claims which
         it may have against any Group Company or the directors, officers or
         employees of any Group Company in respect of any misrepresentation,
         inaccuracy or omission in or from any information or advice supplied
         or given by any Group Company or its employees in connection with the
         giving of the Warranties or the Tax Deed and the preparation of the
         Disclosure Letter other than in respect of any fraudulent
         misrepresentation, inaccuracy or omission.

4.4      The Purchasers hereby, and undertake to shall procure that the Group
         Companies will, waive all rights and claims, in relation to dividend
         payments on the preference shares in the capital of Westwind UK,
         which they may have against any director of any Group Company or
         against any member of the Sellers' Group and covenant not to, and
         undertake to procure that the Group Companies will not, take any
         action against any director of any Group Company or against any
         member of the Sellers' Group in relation thereto.

4.5      Any sum payable to the Purchasers pursuant to a Claim shall be made
         free and clear of and without deduction for or on account of any
         Taxation, except to the extent that any such deduction or withholding
         is required by law. If such Taxation or amounts in respect of such
         Taxation must be deducted or withheld from any sum payable to the
         Purchasers pursuant to a Claim, then the Sellers shall pay an
         additional amount (such amount being referred to as the "gross-up
         amount") as will ensure that after such deduction or withholding
         there shall remain a sum equal to the amount that would otherwise
         have been payable to the Purchasers pursuant to a Claim. To the
         extent that the Purchaser subsequently obtains any Taxation credit,
         allowance, repayment or relief as a result of a Seller paying to the
         Purchaser the gross-up amount, the Purchaser shall pay to the Seller
         so much of the economic benefit from that Taxation credit, allowance,
         repayment or relief which the Purchaser has received and retained as
         does not exceed the gross-up amount.

4.6      If there is a breach of a Warranty and as a result of the breach:

         (a)   the value of the Group Company or of its assets are less than
               it would have been in the absence of the breach; or

         (b)   the Group Company incurs a liability which it would not have
               incurred, or which exceeds the liability it would have
               incurred, had matters been as warranted; or

                                       6
(c)   a Group Company suffers loss, costs or expenses,

         then the Sellers shall pay to the Purchasers by way of damages an
         amount equal to the resulting diminution of value, or the liability
         or excess liability, and the loss, costs and expenses (including
         legal and other professional fees). Nothing in this agreement shall
         be deemed to relieve the Purchasers from any common law duty to
         mitigate any loss or damage incurred by it or the Group Companies as
         a result of any breach of the Warranties.

5        LIMITATIONS OF LIABILITY

5.1      The liability of the Sellers in respect of the Warranties shall be
         limited as follows:

         (a)   the Sellers shall not be liable in respect of any breach of the
               Warranties if and to the extent that the losses arising from
               the breach are actually recovered under the Tax Deed or any
               other provision of this agreement;

         (b)   if in respect of any one matter a Tax Claim may be made both
               under the Tax Warranties and under the Tax Deed, then to the
               extent that recovery in respect of that Tax Claim is actually
               made under the Tax Warranties, the amount payable under the Tax
               Deed in respect of the same matter is reduced accordingly and
               vice versa;

         (c)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it relates to any liability for which
               provision is made or falls to be made, or of which the payment
               or discharge is reflected, in the Accounts;

         (d)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it relates to any liability or
               obligation which would not have arisen but for a change in
               legislation or any amendment to, or the withdrawal of, any
               practice previously published by a Tax Authority, in either
               case occurring after Completion, in each case with
               retrospective effect;

         (e)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it relates to any liability or
               obligation which arises as a result of any change after
               Completion of the date to which any Group Company makes up its
               accounts or in the accounting policies and practices of any
               Group Company or in any change from UK GAAP (or other
               applicable accountancy standard or practices used by the Group
               Company) to any other accounting standards or practices;

         (f)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it relates to any liability or
               obligation which was occasioned by any voluntary act of the
               Purchasers' Group or any Group Company after Completion save
               (subject to clause 5.1(m) below) in respect of any Warranty
               Claim under the environmental warranties set out in paragraph
               A.10 of Part 2 of Schedule 5;

         (g)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it relates to any liability or
               obligation of which the Purchasers' Group are actually aware at
               the date of this agreement;

         (h)   in the case of a Taxation liability, the Sellers shall not be
               liable in respect of any Warranty Claim to the extent that it
               relates to any liability or obligation if any profits or other
               amount to which the Taxation is attributable were actually

                                       7
received by any Group Company but were not reflected in the
               Accounts and should have been;

         (i)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it arises or is increased as a result
               of the failure of any Group Company to make any valid claim,
               election, surrender or disclaimer, to give any valid notice or
               consent or to do any other thing under the provisions of any
               enactment or regulation relating to Taxation after Completion,
               the making, giving or doing of which was taken into account in
               computing the provisions for Taxation in the Accounts and
               either set out in the notes thereto or notified in good time in
               writing to the Purchaser after Completion;

         (j)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent it arises as a result of a failure by the
               Purchaser to comply with Clause 10 (Conduct of Tax Affairs) of
               the Tax Deed;

         (k)   the Sellers shall not be liable in respect of any Warranty
               Claim to the extent that it would not have arisen but for a
               material change in the nature or conduct of any trade carried
               on by any Group Company at Completion, being a material change
               occurring on or after Completion;

         (l)   the Sellers shall not be liable to the Purchasers (taken
               together) more than once in respect of the same loss; and

         (m)   the Sellers shall not be liable in respect of any Warranty
               Claim under the environmental warranties set out in paragraph
               A.10 of Part 2 of Schedule 5 where such claim arises as a
               result of:

               (i)    any information provided to any regulatory authority by
                      the Purchasers or the Group Companies save (i) as
                      required by law or legislation or (ii) where such
                      information is provided as a direct result of a written
                      request to the Purchasers or the Group Companies for
                      such information by such regulatory authority and
                      neither the Purchasers nor any person acting on their
                      behalf has done anything to incite or encourage such a
                      written request from the relevant authority;

               (ii)   any intrusive investigations undertaken at any Relevant
                      Property by or on behalf of the Purchasers (except where
                      demanded of the Purchasers by any regulatory authority
                      or a prospective purchaser of any of the Properties or
                      the Group Companies or in the ordinary course of business
                      of the Group Companies as carried out at the date of this
                      agreement).

5.2      The Purchasers and the Sellers each acknowledge that neither of them
         are aware of any Warranty Claim arising out of the WSP Environmental
         UK Ltd., Phase 1 environmental audit in relation to Holton Health
         Industrial Estate, Poole, Dorset.

5.3      The liability of the Sellers shall also be limited as follows:

         (a)   the Purchaser shall not be entitled to recover any damages in
               respect of any breach or breaches of the Warranties unless (i)
               the amount of damages in respect

                                       8
of such breach or breaches exceeds in aggregate the sum of
               (British pound)180,000, in which event the Sellers shall be
               liable for the whole amount of the liability and not merely the
               excess and (ii) each individual claim or series of claims
               arising out of the same matters, facts or circumstances exceeds
               (British pound)15,000; and

         (b)   the maximum aggregate liability of the Sellers under this
               agreement and the Tax Deed shall not exceed the Consideration.

5.4      The Purchasers shall not be entitled to make any Warranty Claim in
         respect of any matter fairly disclosed in the Disclosure Letter.

5.5      If after Completion any of the Purchasers or any Group Company
         becomes aware of a matter which could give rise to a claim under the
         Warranties (other than in respect of a breach of any Tax Warranty, in
         which case the claim shall be dealt with in the manner set out in the
         Tax Deed) the Sellers shall not be liable in respect of the Warranty
         Claim unless the Purchasers have given written notice of the claim,
         setting out reasonable particulars of the relevant facts, and, if
         reasonably practicable the amount claimed, to the Sellers promptly
         and in any event within three months of any officer of GSI Lumonics,
         Inc. (the parent undertaking of the Purchasers' Group) becoming aware
         of such Warranty Claim.

5.6      The Sellers shall cease to have any liability under or in respect of
         the Warranties:

         (a)   on the later to occur of the relevant limitation period and the
               tenth anniversary of the Completion Date for claims arising
               under the Warranties in Part 1 of Schedule 5;

         (b)   in respect of the Tax Warranties on the seventh anniversary of
               the Completion Date provided that, in the case of Westwind US
               or any Subsidiaries subject to Tax in a jurisdiction outside
               the United Kingdom, on such later date as is six months after
               the last date on which the Tax Authority which is seeking to
               impose a Tax to which any Claim relates may do so;

         (c)   on the seventh anniversary of the date of Completion in respect
               of claims under Warranty A.10 (Environmental); and

         (d)   on the date 18 months after the Completion Date in respect of
               all other Warranties,

         except in respect of a Warranty Claim of which the Purchaser gives
         written notice to the Sellers before the relevant date. The liability
         of the Sellers in respect of any Warranty Claim shall in any event
         terminate if proceedings in respect of it have not commenced within
         six months of service of notice of that Warranty Claim.

5.7      The limitations of liability contained in this clause 5 shall not
         apply to any liability for any Claim to the extent that the same is
         attributable to fraud, fraudulent misrepresentation or wilful
         concealment on the part of the relevant Seller.

5.8      If, at any time after the date of this agreement and before the
         expiry of three months following Completion the Sellers (or any of
         them), want to insure their liabilities in respect of claims they
         shall (notwithstanding any other provision of this agreement) be able
         to disclose Confidential Information to a prospective insurer subject
         to the receipt

                                       9
of a confidentiality undertaking from such insurer in form and
         substance reasonably satisfactory to the Purchasers.

5.9      If a claim for breach of Warranty arises as a result of, or in
         connection with, a liability or alleged liability to a third party (a
         "Third Party Claim"), then (except for a liability in relation to
         Taxation where the provisions of the schedule to the Tax Deed shall
         apply) at the Sellers' cost in respect of out of pocket expenses (but
         not, for example, management time);

         (a)   the Purchasers shall procure the relevant Group Company to make
               available to the Sellers such persons and all such information
               as the Sellers may reasonably require for assessing,
               contesting, appealing or compromising the Third Party Claim;

         (b)   the Purchasers shall procure the relevant Group Company, to the
               extent reasonably practicable, to consult with the Sellers in
               relation to the conduct of any appeal, dispute, compromise or
               defence of the Third Party Claim; and

         (c)   the Purchaser shall, and shall procure that the relevant Group
               Company shall, to the extent reasonably practicable, keep the
               Sellers informed of the progress of the Third Party Claim.

5.10     This paragraph applies if:

         (a)   the Sellers make a payment (excluding any interest on a late
               payment) in respect of a claim for breach of Warranty (the
               "Damages Payment"); and

         (b)   any Group Company or any Purchaser receives any sum which would
               not have been received but for the circumstance which gave rise
               to that claim for breach of Warranty (the "Third Party Sum");
               and

         (c)   the receipt of the Third Party Sum was not taken into account
               in calculating the Damages Payment; and

         (d)   the aggregate of the Third Party Sum and the Damages Payment
               exceeds the amount required to compensate the Purchaser in full
               for the loss or liability which gave rise to the claim for
               breach of Warranty in question, such excess being the Excess
               Recovery.

         If this paragraph applies, the relevant Purchaser shall, promptly on
         receipt of the Third Party Sum by it or the relevant Group Company,
         repay to the relevant Seller(s) an amount equal to the lower of (i)
         the Excess Recovery and (ii) the Damages Payment, after deducting (in
         either case) all costs incurred by the Purchaser(s) or the relevant
         Group Company in recovering the Third Party Sum and any taxation
         payable by the Purchaser(s) or any Group Company by virtue of its
         receipt.

5.11     Without prejudice to the Purchasers' duty to mitigate any loss in
         respect of any breach of the Warranties, if in respect of any matter
         which would otherwise give rise to a breach of the Warranties one of
         the Group Companies is entitled to claim under any policy of
         insurance, the amount of insurance monies to which that Group Company
         actually receives shall reduce pro tanto or extinguish the claim for
         breach of the Warranties.

                                      10
6        PURCHASERS' WARRANTIES

6.1      Each of the Purchasers warrants to the Sellers that:

         (a)   it has the requisite power and authority to enter into and to
               perform this agreement and the agreements and deed referred to
               in this agreement which are to be entered into by the
               Purchasers or one or more members of the Purchasers' Group;

         (b)   it has obtained or satisfied all corporate, regulatory and
               other approvals, or any other conditions, necessary to execute
               and complete this agreement and the agreements and deed
               referred to in this agreement which are to be entered into by
               the Purchasers or one or more members of the Purchasers' Group;

         (c)   this agreement and each of the agreements and the deed referred
               to in this agreement which are to be entered into by the
               Purchasers or one or more members of the Purchasers' Group
               constitute binding obligations of each of the Purchasers and
               each such member in accordance with its respective terms;

         (d)   compliance with the terms of this agreement and the agreements
               and deed referred to in this agreement which are to be entered
               into by the Purchasers or one or more members of the
               Purchasers' Group does not and will not conflict with or
               constitute a default or a breach under any provision of:

               (i)    the Purchasers' or the respective member's memorandum or
                      articles of association or by-laws or equivalent
                      constitutional documents; or

               (ii)   any order, judgement, decree or regulation or any other
                      restriction of any kind by which the Purchasers or the
                      respective member is bound or submits; or (iii) any
                      agreement, instrument or contract to which the
                      Purchasers or the respective member is a party or by
                      which it is bound; and

         (e)   it is not actually aware of any breach of Warranty by the
               Sellers.

7        TAX DEED

7.1      The parties to the Tax Deed shall enter into the Tax Deed on
         Completion.

8        COMPLETION

8.1      Completion shall take place at the offices of Allen & Overy at 40
         Bank Street, Canary Wharf, London immediately after the signature of
         this agreement (or on such later date as the Sellers and the
         Purchasers may agree in writing).

8.2      At Completion:

         (a)   Cobham and Westwind UK shall each sign the bank mandate in
               respect of the Escrow Account providing that no withdrawals may
               be made from the Escrow Account without the joint signatures of
               Cobham and Westwind UK;

         (b)   each of the Sellers shall procure the delivery to the
               Purchasers of:

                                      11
(i)    duly executed transfers in favour of the relevant
                      Purchaser or its nominee(s) of all the Sale Shares shown
                      opposite its name in Schedule 1;

               (ii)   the share certificates representing such Sale Shares (or
                      an express indemnity in a form reasonably satisfactory
                      to the Purchasers in the case of any found to be
                      missing); and

               (iii)  the Tax Deed duly executed by the Sellers;

         (c)   the Sellers shall procure the delivery to the Purchasers of:

               (i)    the certificate of incorporation, common seal, minute
                      books and share certificate books of Westwind UK;

               (ii)   duly executed transfers of each share in a Subsidiary as
                      is not registered in the name of the Company or a member
                      of the Group in favour of the Purchasers or as it may
                      direct together with the relevant share certificates;
                      and

               (iii)  the resignation of Warren Tucker and Allan Cook as
                      directors of Westwind UK in each case acknowledging
                      under seal that they have no claim against any member of
                      the Group whether for loss of office or otherwise; and

         (d)   Each of the Sellers shall procure that a board meeting of the
               Companies are held at Completion at which it is resolved that:

               (i)    such persons as the Purchasers nominate are appointed as
                      additional directors and the secretary of that member of
                      the Group;

               (ii)   if relevant, the transfers referred to in paragraph (a)
                      above (subject only to their being duly stamped) are
                      approved for registration; and

               (iii)  its bank mandates are revised in such manner as the
                      Purchasers require.

8.3      Upon completion of all the matters (or waiver by the Purchasers
         thereof) referred to in clause 8.2 the Purchasers shall:

         (a)   subject to clause 11.11 pay into the Escrow Account an amount
               of (British pound)3,000,000 of the Consideration (the "Escrow
               Amount");

         (b)   pay the remainder of the Consideration to the relevant Sellers
               apportioned between them as provided in Schedule 1, such
               payment to be made by transfer of funds to Cobham receipt of
               which shall be a valid discharge of the Purchasers' obligations
               under this sub-clause;

         (c)   deliver to the Sellers a duly executed counterpart of the Tax
               Deed; and

         (d)   as evidence of the authority of each person executing a
               document referred to in this clause 8 on the Purchasers behalf
               an extract of the minutes of a duly held meeting of the
               directors of the Purchasers (or a duly constituted committee
               thereof) authorising the execution by the Purchasers of the
               document and, where such execution is authorised by a committee
               of the board of directors of the

                                      12
Purchasers, an extract of the minutes of a duly held meeting of
               the directors constituting such committee or the relevant
               extract thereof certified to be a true extract by a director or
               the secretary of the Purchasers.

8.4      If any foregoing provisions of this clause 8 is not fully complied
         with, the Purchasers, in the case of non-compliance by the Sellers,
         or the Sellers in the case of non-compliance by the Purchasers, shall
         be entitled (in addition to, and without prejudice to, all other
         rights or remedies available to it, including the right to claim
         damages) by written notice to the Sellers or, as the case may be, the
         Purchasers, served on such date:

         (a)   to elect to terminate this agreement; or

         (b)   to effect Completion so far as practicable having regard to the
               defaults which have occurred; or

         (c)   to fix a new date for Completion in which case the foregoing
               provisions of this sub-clause shall apply to Completion as so
               deferred.

9        GUARANTEES AND LOAN ACCOUNTS

9.1      The Purchasers shall use all reasonable endeavours to procure that on
         Completion, or as soon as reasonably practicable following
         Completion, each member of the Sellers' Group is released from all
         guarantees and indemnities given, if any, by it in respect of
         obligations of any of any Group Company and, pending such release,
         the Purchasers shall indemnify the Sellers (for themselves and as
         trustees on behalf of the relevant members of the Sellers' Group)
         against all liabilities under those guarantees and indemnities.

9.2      Each of the Sellers shall use all reasonable endeavours to procure
         that on Completion, or as soon as reasonably practicable following
         Completion, each of the Group Companies is released from all
         guarantees and indemnities given by it in respect of obligations of
         each Seller and/or any member of the relevant Sellers' Group and,
         pending such release, each of the Sellers shall indemnify the
         relevant member of the Group against all liabilities under those
         guarantees and indemnities.

9.3      The Purchasers shall procure that immediately on Completion the Group
         Loans representing amounts due from the Group Companies to the
         Sellers' Group are repaid on behalf of the Group Companies to Cobham
         on behalf of the relevant members of the Sellers' Group.

9.4      Cobham shall procure that immediately on Completion the Group Loans
         representing amounts due from the Sellers' Group to the Group
         Companies are repaid on behalf of the Seller's Group to the relevant
         Group Company.

9.5      The repayment of the Group Loans under this clause shall serve to
         satisfy all outstanding indebtedness between the Sellers' Group and
         the Group Companies and to release all outstanding liability between
         them.

9.6      The Purchasers shall procure that on Completion the Group Companies
         repay any indebtedness including any term loans and overdrafts (and
         interest thereon) owed by the Group Companies to Barclays Bank plc in
         respect of which any member of the Sellers' Group has provided a
         guarantee or indemnity.

                                      13
10       PROTECTIVE COVENANTS

10.1     Each Seller covenants with each of the Purchasers for itself and as
         trustee for each Group Company that it shall not, and shall procure
         that no member of the Sellers' Group shall, directly or indirectly:

         (a)   for a period of five years from Completion be concerned in any
               business which is competitive with the Restricted Business, or
               any part of it, carried on by a Group Company at Completion; or

         (b)   for a period of five years from the date of this agreement,
               directly induce or attempt to induce any director (other than a
               director resigning at Completion), or employee of a Group
               Company who is in receipt of an annual gross basic salary (on
               the basis of full-time employment) in excess of (British
               pound)25,000 to leave the employment of, or relationship with,
               that Group Company or enter into any employment or services
               agreement with a Seller or a member of the Sellers' Group
               (otherwise than in response to a newspaper or trade
               advertisement); or

         (c)   make use of or (except as required by law or any competent
               regulatory body or stock exchange) disclose or divulge to any
               third party any Confidential Information of a secret or
               confidential nature relating to the business of any Group
               Company; or

         (d)   for a period of five years from Completion, carry on the
               Restricted Business or canvass or solicit orders for services
               or goods being provided by any Group Company at Completion from
               any person, firm or company who is at Completion a customer of
               any Group Company; or

         (e)   use or allow to be used any trade-mark, trade name, sign, logo
               or other Intellectual Property Rights owned by a Group Company
               at Completion or anything confusingly similar to them (but only
               in relation to the use of their own name) in any matter which
               is directly competitive with the Restricted Business.

10.2     For the purpose of this clause, a Seller is concerned in a business
         if it carries it on as a principal or agent or if it has any direct
         or indirect financial interest as a shareholder in any person who
         carries on the business. However, nothing contained in this agreement
         shall preclude or restrict any Seller from holding, as a passive
         investor and together with the holdings of all other members of the
         Sellers' Group in such company, not more than five per cent. of the
         issued share capital of any company.

10.3     The restrictions in subclause 10.1 shall not apply (or as the case
         may be shall cease to apply) insofar and to the extent that any
         member of the Sellers' Group after Completion acquires any company or
         business and, as a result of that acquisition, acquires a company or
         business which falls within the terms of the subclause 10.1 (the
         "Relevant Interest") provided that:

         (a)   the acquisition of the Relevant Interest is not the principal
               reason for such acquisition; and

         (b)   the Relevant Interest represents less than 10 per cent. of the
               total consolidated turnover of the company or business being
               acquired.

                                      14
10.4     Each of the restrictions in each paragraph or sub-clause above shall
         be enforceable independently of each of the others and its validity
         shall not be affected if any of the others is invalid.

10.5     If any of those restrictions is void but would be valid if some part
         of the restrictions were deleted the restriction in question shall
         apply with such modification as may be necessary to make it valid.

10.6     The Sellers acknowledge that the above provisions of this clause are
         no more extensive than is reasonable to protect the Purchasers as the
         purchasers of the Sale Shares.

10.7     Each of the Sellers shall use all reasonable efforts for five years
         following Completion to direct to the Purchasers all future sales and
         other opportunities it receives with respect to the Restricted
         Business.

11       THE ESCROW

11.1     The Escrow Amount shall be paid at Completion into the Escrow Account
         subject to clause 11.11 and the balance of the Escrow Account from
         time to time, excluding for the avoidance of doubt amounts paid to
         the Purchasers under this clause 11, shall be held on trust for the
         Sellers absolutely.

11.2     The Escrow Amount less the aggregate sum of all paid Claims (the
         "Escrow Account Release") shall be paid from the Escrow Account to
         the Sellers in accordance with this clause 11 on the date 18 months
         after the Completion Date (provided that, however, if that day is not
         a Business Day, payment shall be made on the first day which is a
         Business Day after that date) (the "Escrow Account Release Date"),
         unless prior to the Escrow Account Release Date the Purchasers have
         given notice to the Sellers of a Claim which in the written opinion
         of a Queens Counsel which has been provided to the Sellers is more
         likely to succeed than not which as at that date is or are not
         settled (a "Potential Claim") and, in which event a sum equal to the
         Purchasers reasonably estimated amount of such Claim or Claims shall
         be retained in the Escrow Account pending settlement of such Claim or
         Claims, in which case the amount of the reasonably estimated amount
         of such Claim or Claims shall be deducted from the Escrow Account
         Release and the remaining sum (if any) after such deduction shall be
         released to the Sellers on the Escrow Account Release Date. If
         proceedings in respect of the Potential Claim have not commenced
         within six months of service of notice of that Claim, the Potential
         Claim shall be disregarded and, if a sum is held in the Escrow
         Account after the Escrow Account Release Date in respect of that
         Potential Claim, that sum shall be released to the Sellers on the
         first Business Day following expiry of the six month period.

11.3     Any sum which is retained pursuant to the Claim or Claims shall be
         paid to the Sellers on the first Business Day following settlement of
         such Claim or Claims (and if there is more than one Claim, the amount
         retained in the Escrow Account for each Claim shall be dealt with and
         released separately for this purpose forthwith upon settlement of the
         relevant Claim).

11.4     If any amount becomes due to the Purchasers in respect of a Claim
         (each an "Escrow Claim") prior to the Escrow Account Release Date as
         a result of that Escrow Claim being settled in accordance with clause
         11.5 below:

                                      15
(a)   that amount (or where the balance of the Escrow Account is less
               than that amount, that lesser amount) shall be paid to the
               Purchasers out of the Escrow Account unless otherwise recovered
               by the Purchasers from the Sellers; and

         (b)   the Sellers and the Purchasers shall promptly (and for the
               avoidance of doubt within five Business Days of the date on
               which the entitlement arises) instruct the bank holding the
               Escrow Account to pay the relevant sum referred to in clause
               11.4(a) from the Escrow Account to the Purchasers; and

         (c)   the amount of the Escrow Amount payable to the Sellers under
               clause 11.2 shall be reduced by an amount being no greater than
               the amount due to the Purchasers under any such settlement.

         For the avoidance of doubt, if the Escrow Amount otherwise payable to
         the Sellers is reduced by any amount in respect of an Escrow Claim
         paid to the Purchasers pursuant to this clause, the Purchasers shall
         not be entitled to receive the same amount from the Sellers pursuant
         to any other clause of this agreement. The Sellers' liability in
         respect of the Claims under the Warranties shall not be limited by
         the amount of money standing to the credit of the Escrow Account from
         time to time. 11.5 For the purposes of this clause 11 an Escrow Claim
         shall be regarded as settled if:

         (a)   the Sellers and the Purchasers shall so agree in writing; or

         (b)   a court has awarded judgement in respect of the Escrow Claim
               and the period for lodging an appeal has expired without an
               appeal having been lodged or no appeal is possible; or

         (c)   a Tax Authority has given its final determination in respect of
               any tax issue which is the subject of a Claim and that
               determination is not being appealed under clause 6 of the Tax
               Deed; or

         (d)   the Escrow Claim is withdrawn; or

         (e)   the Sellers are not, or are no longer, liable in respect of the
               Claim under the provisions of this agreement or the Tax Deed.

11.6     Interest on the Escrow Account shall accrue from time to time on the
         balance of the amounts standing to the credit of the Escrow Account
         and shall be paid monthly to the Sellers.

11.7     When an amount of the principal monies in the Escrow Account is paid
         to the Purchasers or the Sellers in accordance with the provisions of
         this agreement, interest earned or accrued on such amount which has
         not been paid out pursuant to clause 11.6 shall be paid to the
         Sellers, at the time of payment of such amount.

11.8     The Sellers and the Purchasers shall procure the payment of all
         amounts from the Escrow Accounts in accordance with this agreement.

11.9     If, in the event of a dispute between the Purchasers and the Sellers
         in respect of any payment due under this clause 11, payment may only
         then be made in accordance with an order of a court of competent
         jurisdiction and on the making of such order the Purchasers and
         Sellers shall give instructions to effect such transfer.

                                      16
11.10    The Sellers and the Purchasers acknowledge that any disputes between
         them in relation to the Escrow Account shall be dealt with in
         accordance with the provisions of this agreement.

11.11    In the event that the Escrow Account is not properly established at
         Completion the Escrow Amount will be held in the client account of
         Allen & Overy to the Sellers' order pending the proper establishment
         of the Escrow Account. The parties will use their best endeavours to
         establish the Escrow Account forthwith after Completion and as soon
         as is practical after the proper establishment of the Escrow Account,
         the Sellers will procure that the Escrow Amount is paid into the
         Escrow Account from the Allen & Overy client account.

12       ANNOUNCEMENTS AND CONFIDENTIALITY

12.1     No party shall make or permit any person connected with it to make
         any announcement concerning this sale and purchase or any ancillary
         matter referred to in clause 12.2 before, on or after Completion
         except with the prior written approval of the Sellers (in the case of
         an announcement by the Purchasers) and the Purchasers (in the case of
         an announcement by the Sellers), such approval not to be unreasonably
         withheld or delayed.

12.2     The ancillary matters referred to in clause 12.1 include all
         information received or obtained as a result of entering into, or
         performing, this agreement which relates to:

         (a)   the provisions of this agreement;

         (b)   the discussion or negotiations relating to this agreement;

         (c)   the subject matter of this agreement; or

         (d)   the other parties or their group undertakings,

         not being information for which provision is made in clause 12.3.

12.3     Clauses 12.1 and 12.2 shall not prevent the disclosure of
         information:

         (a)   to the extent required by law or regulation or stock exchange
               but in those circumstances the party required to make such
               disclosure shall give to the other parties prompt written
               notice where practicable and lawful to do so before it occurs
               so that such disclosure shall be made after consultation with
               the other parties (so far as is reasonably practicable) and
               after taking into account (to the extent reasonably
               practicable) the reasonable requirements of the other parties
               as the timing, contents and manner of making or dispatch or so
               that such other parties shall have sufficient opportunity to
               avoid disclosure through appropriate legal means;

         (b)   to the extent that the information is in or comes into the
               public domain other than as a result of a breach of any
               undertaking or duty of confidentiality by any person; or

         (c)   to professional advisers, to the extent required for the
               purpose of the businesses of the person providing it or the
               Group Companies and subject to equivalent undertakings of
               confidentiality or to a tax authority in connection with the
               tax affairs of the disclosing party or a member of its group.

                                      17
12.4     Notwithstanding the foregoing, the parties (and each employee,
         representative, or other agent of the parties) may disclose to any
         and all persons, without limitation of any kind, the tax treatment
         and the tax structure of the transaction and all materials of any
         kind (including opinions and other tax analyses) that are provided to
         the parties relating to the tax treatment and tax structure,
         beginning on the earliest of (i) the date of the public announcement
         of discussions relating to the transaction, (ii) the date of public
         announcement of the transaction, or (iii) the date of the execution
         of an agreement (with or without conditions) to enter into the
         transaction, provided, however, that none of the parties (nor any
         employee, representative or other agent thereof) may disclose any
         other information that is not relevant to understanding the tax
         treatment and tax structure of the transaction (including if not
         relevant to understanding the tax treatment and tax structure of the
         transaction, the identity of any party and any information that could
         lead another to determine the identity of any party), or any other
         information to the extent that such disclosure could reasonably
         result in a violation of any applicable securities law.

13       INTEREST

If       any sum due for payment under this agreement is not paid on the due
         date the party in default shall pay interest on that sum from the due
         date until the date of actual payment calculated on a day to day
         basis at a rate equal to the aggregate of 2 per cent. per annum above
         the base rate of Barclays Bank PLC for the time being unless
         expressly provided to the contrary in this agreement.

14       NOTICES

14.1     Any notice or other communication to be given under this agreement
         shall be in writing and signed by or on behalf of the party giving it
         and may be served by delivering it by hand or sending it by facsimile
         (with a confirmatory postal notice) to the address and for the
         attention of the relevant party set out in this clause 14 (or
         otherwise notified from time to time hereunder). Any notice so served
         shall be deemed received:

         (a)   in the case of delivery by hand, when delivered; and

         (b)   in the case of facsimile, 12 hours after the time of dispatch
               subject to confirmation of its transmission being recorded by
               the sender's fax machine and the dispatch of the postal
               confirmation within 24 hours thereafter.

         Provided that any such notice or communication which would otherwise
         be deemed to be given or made outside working hours shall be deemed
         to be given or made at the start of working hours in London on the
         following Business Day.

14.2     The addresses of the parties for the purpose of this clause 14 are as
         follows:

         The Sellers:
         -----------

                               C/o Cobham plc,
                               For the attention of: the Company Secretary

         Address:              Brook Road, Wimborne, Dorset BH21 2BJ, England

                                      10
Fax:                  +44 (0) 1202 840 523

         Required copy to:     Allen & Overy
                               One New Change, London EC4M 9QQ
                               For the attention of: Richard Browne

         Fax:                  +44 (0) 20 7330 9999

         The Purchasers:

                               GSI Lumonics Inc.,
                               For the attention of: Tammy Ghanem,
                                                     General Counsel

         Address:              39 Manning Road, Billerica, MA 01821, USA

         Fax:                  001 978 663 9466

         Required copy to:     Skadden, Arps, Slate, Meagher & Flom (UK) LLP
                               40 Bank Street, Canary Wharf, London E14 5DS
                               For the attention of: Allan Murray-Jones

         Fax:                  +44 (0) 20 7519 7199

14.3     In proving service it shall be sufficient to prove that the envelope
         containing the notice or communication was properly addressed and
         delivered to the address shown thereon, or that the facsimile
         transmission was made after obtaining in person or by telephone
         appropriate evidence of the addressee having received the same.

14.4     Any of the Sellers or the Purchasers may notify the other of any
         change to its name, address or facsimile number for the purpose of
         this clause 14, provided that such notice shall only be effective on:

         (a)   the date specified in the notice as the date on which the
               change is to take effect; and

         (b)   if no date is so specified or the date specified is less than
               three Business Days after which such notice was given (or
               deemed to be given) the day following three Business Days after
               the notice was given or deemed to be given.

15       RESOLUTIONS AND WAIVERS

15.1     In relation to each Group Company the Sellers shall procure the
         convening of all meetings, the giving of all waivers and consents and
         the passing of all resolutions as are necessary under the Companies
         Act 1985 or applicable law, or such Group Company articles of
         association, by-laws or equivalent documents and each shall procure
         the giving of all waivers or consents as are necessary under any
         other agreement or obligation affecting it, in any such case to vest
         the Sale Shares in the Purchasers (including, without limitation,
         voting to remove any director who does not approve the transfer of
         the Sale Shares).

                                      19
15.2     Each of the Sellers waives, (and shall procure the waiver by his
         nominee(s) of) all rights of pre-emption which he (or such
         nominee(s)) may have (whether under the Companies articles of
         association, by-laws or equivalent documents or otherwise) in respect
         of the transfer to the Purchasers or their nominee(s) of the Sale
         Shares or any of them.

16       GENERAL

16.1     Each of the obligations, covenants, Warranties and undertakings given
         to the Purchasers set out in this agreement and the Tax Deed which is
         not fully performed at Completion shall not be affected by
         Completion, except to the extent waived or released by a specific and
         duly authorised written waiver or release by the Purchasers.

16.2     Unless otherwise expressly stated all payments to be made under this
         agreement shall be made in sterling to such account as the receiving
         party directs by notice to the paying party.

16.3     None of the rights or obligations under this agreement may be
         assigned or transferred without the prior written consent of all of
         the parties except that the Purchasers may assign the benefit of this
         agreement (in whole or in part) to another member of the Purchasers'
         Group subject to the assignee agreeing, for the benefit of the
         Sellers, not to assign the benefit of this agreement (in whole or in
         part) and provided that if the assignee ceases to be a member of the
         Purchasers' Group then immediately prior to such event all rights
         assigned to that assignee shall be deemed to have been transferred
         back to the assigning Purchaser. No such assignment shall result in
         any increased liability to any Seller.

16.4     Any time, date or period referred to in this agreement may be
         extended by mutual agreement in writing between the Purchasers and
         the Sellers but as regards any time, date or period originally fixed
         or so extended, time shall be of the essence.

16.5     Each party shall pay the costs and expenses incurred by it in
         connection with the entering into and completion of this agreement
         including without limitation fees of solicitors, financial advisers
         and accountants.

16.6     This agreement may be executed in any number of counterparts, all of
         which taken together shall constitute one and the same agreement and
         any party may enter into this agreement by executing a counterpart.

16.7     Except in respect of the rights of the directors of the Group
         Companies under clause 4.4 a person who is not a party to this
         agreement may not enforce any of its terms under the Contracts
         (Rights of Third Parties) Act 1999. The consent of any person who is
         not a party to this agreement shall not be required to amend or
         terminate this agreement.

16.8     If any term in this agreement shall be held to be illegal, invalid or
         unenforceable, in whole or in part, under any enactment or rule of
         law, such term or part shall to that extent be deemed not to form
         part of this agreement but the legality, validity or enforceability
         of the remainder of this agreement shall not be affected.

16.9     No variation of this agreement shall be effective unless in writing
         and signed by or on behalf of each of the parties to this agreement.

16.10    The Purchasers shall not be entitled to rescind this agreement after
         Completion in any circumstances.

                                      20
17       WHOLE AGREEMENT

17.1     This agreement and the documents referred to in it to be executed by
         one or more of the parties in connection with the Transaction contain
         the whole agreement between the parties relating to the transactions
         contemplated by this agreement and supersede all previous agreements
         between the parties relating to these transactions.

17.2     Each of the parties acknowledges that in agreeing to enter into this
         agreement it has not relied on any representation, warranty,
         collateral contract or other assurance (except those warranties
         expressly set out in this agreement) made by or on behalf of any
         other party before the signature of this agreement including, without
         limitation, during the course of negotiating this agreement. Each of
         the parties waives all rights and remedies which, but for this
         clause, might otherwise be available to it in respect of any such
         representation, warranty, collateral contract or other assurance,
         provided that nothing in this clause shall limit or exclude any
         liability for fraud.

18       GOVERNING LAW

18.1     This agreement is governed by, and shall be construed in accordance,
         with English law.

18.2     Each of the parties submits to the exclusive jurisdiction of the
         English courts for all purposes relating to this agreement.

18.3     FRH hereby irrevocably appoints Cobham as its agent to accept service
         of process in England in any legal action or proceedings arising out
         of this agreement, service upon whom shall be deemed completed
         whether or not forwarded to or received by FRH. FRH shall promptly
         notify the Purchasers, in writing, of any change of address of its
         process agent within 25 days. If such process agent ceases to be able
         to act as such or to have an address in England, FRH irrevocably
         undertakes to appoint a new process agent in England reasonably
         acceptable to the Purchasers and to deliver to the Purchasers as soon
         as practicable a copy of a written acceptance of appointment by the
         new process agent.

18.4     The US Purchaser, hereby irrevocably appoints the UK Purchaser as its
         agent to accept service of process in England in any legal action or
         proceedings arising out of this agreement, service upon whom shall be
         deemed completed whether or not forwarded to or received by the US
         Purchaser. The US Purchaser, shall promptly notify the Sellers, in
         writing, of any change of address of its process agent within 25
         days. If such process agent ceases to be able to act as such or to
         have an address in England, the US Purchaser, irrevocably undertakes
         to appoint a new process agent in England reasonably acceptable to
         the Sellers and to deliver to the Sellers as soon as practicable a
         copy of a written acceptance of appointment by the new process agent.

18.5     Nothing in this agreement shall affect the right to serve process in
         any other manner permitted by law.

18.6     The parties waive any objection to the English courts on grounds that
         they are an inconvenient or inappropriate forum to settle any such
         dispute.

18.7     Each party waives any right it may have to a jury trial of any claim
         or cause of action in connection with this agreement. This agreement
         may be filed as a written consent to trial by court.

                                      21
19       SELLERS' REPRESENTATIVE

19.1     Each Seller hereby authorises Cobham to take any action and receive
         all notices on its behalf as anticipated pursuant to this Agreement.

19.2     Each Seller agrees:

        (i)    to indemnify the Sellers' Representative in respect of any loss,
               claim or expense incurred by the Sellers' Representative arising
               from acts taken by him pursuant to clause 19.1; and

        (ii)   to hold harmless the Sellers' Representative in respect of any
               loss, claim or expense incurred by the Sellers' Representative
               from acts taken by him pursuant to clause 19.1 or omission in
               each case or on an after-tax basis.

AS WITNESS the hands of the parties or their duly authorised officers on the
date first written on page 1 of this agreement.

                                      22
SIGNED BY                                   )   /s/ Warren Tucker
COBHAM PLC                                  )   Warren Tucker
acting by a duly authorised representative  )
in the presence of:-                        )   /s/  Alun Eynon-Evans
                                                Alun Eynon-Evans

SIGNED BY                                   )   /s/ Warren Tucker
FR HOLDINGS INC                             )   Warren Tucker
acting by a duly authorised representative  )
in the presence of:-                        )   /s/  Alun Eynon-Evans
                                                Alun Eynon-Evans

SIGNED BY                                   )   /s/ Warren Tucker
LOCKMAN INVESTMENTS LIMITED                 )   Warren Tucker
acting by a duly authorised representative  )
in the presence of:-                        )   /s/  Alun Eynon-Evans
                                                Alun Eynon-Evans

SIGNED BY                                   )   /s/ Charles Winston
GSI LUMONICS LIMITED                        )   Charles Winston
acting by a duly authorised representative  )
in the presence of:-                        )   /s/ Paul Criswell Esq.
                                                Paul Criswell Esq.

SIGNED BY                                   )   /s/  Charles Winston
GSI LUMONICS, CORPORATION                   )   Charles Winston
acting by a duly authorised representative  )
in the presence of:-                        )   /s/ Mona Bieler
                                                Mona Bieler

                                      23
Exhibit 99.1

                                 PRESS RELEASE

GSI Lumonics Announces Acquisition of Westwind Air Bearings

Billerica, MA (December 10, 2003) GSI Lumonics Inc. (Nasdaq: GSLI and TSX:
LSI) has completed the acquisition of Westwind Air Bearings Limited,
(Westwind), its subsidiaries and outstanding shares from Cobham plc, an
English company. The all-cash purchase price was (British pound)21,250,000 or
approximately US$37million.

With over thirty years of experience, Westwind Air Bearings is widely
recognized as the world leader in the design, manufacture and supply of high
precision rotary motion components based on its proprietary air bearing
spindle technology. This technology provides enabling components in several
key markets for GSI Lumonics, including PCB drilling, semiconductor
manufacturing, optical scanning, and imaging for both medical and
reprographics.

Charles Winston, GSI Lumonics' President and Chief Executive Officer said,
"The Westwind acquisition is consistent with the Company's stated strategy of
expanding its product lines and technology in the laser and precision motion
components business groups. Westwind's high precision rotary motion technology
and products strengthen our position in the electronics manufacturing and
optical scanning markets at a time when these markets are recovering. It is
expected that this acquisition will be accretive to earnings during 2004".

About Westwind:
     o    Annual revenues: (British pound)15M or approximately US$23 million
          in 2002. The Company expects revenues to be approximately US$31
          million for the full year 2003, based on present performance.
     o    Net assets:(British pound)16M or approximately US$26 million in 2002.
     o    Location: Principal operations are based in Poole, England. It has a
          manufacturing and service facility in Shuzhou China and sales and
          service offices in the United States and Japan.
     o    Workforce: 350 employees.

GSI Lumonics will host a conference call for investors to discuss this
acquisition at 6 p.m. EST on Wednesday, December 10, 2003. To participate,
call 800-901-5231 (within the US and Canada) no earlier than 5:50 p.m. EST and
no later than 5:55 p.m. EST and identify yourself to the operator with the
participant code 46557792. For international callers, call 617-786-2961 with
the same participant code. A replay of the call will be available from one
hour after the call ends to midnight, December 28, 2003 at 888-286-8010. For
international callers, the replay is available at 617-801-6888. The access
code is 48981410.

The conference call also will be broadcast live over the Internet in
listen-only mode. For live webcasting, go to:
http://www.firstcallevents.com/service/ajwz394813945gf12.html at least 15
minutes prior to the call in order to register, download and install any
necessary software. The call will be archived on the above web site until
midnight, December 28, 2003.

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

GSI Lumonics supplies precision motion control components, lasers and
laser-based advanced manufacturing systems to the global medical,
semiconductor, electronics, and industrial markets. GSI Lumonics' common
shares are listed on Nasdaq (GSLI) and The Toronto Stock Exchange (LSI).

Certain statements in this news release may constitute forward-looking
statements within the meaning of the United States Private Securities
Litigation Reform Act of 1995, Section 27A of the United States Securities Act
of 1933 and Section 21E of the United States Securities Exchange Act of 1934.
These forward-looking statements may relate to anticipated financial
performance, management's plans and objectives for future operations, business
prospects, outcome of regulatory proceedings, market conditions, tax issues
and other matters. All statements contained in this news release that do not
relate to matters of historical fact should be considered forward-looking
statements, and are generally identified by words such as "anticipate,"
"believe," "estimate," "expect," "intend," "plan," "objective" and other
similar expressions. Readers should not place undue reliance on the
forward-looking statements contained in this news release. Such statements are
based on management's beliefs and assumptions and on information currently
available to management and are subject to risks, uncertainties and changes in
condition, significance, value and effect. Other risks include the fact that
the Company's sales have been and are expected to continue to be dependent
upon customer capital equipment expenditures, which are, in turn, affected by
business cycles in the markets served by those customers. Other factors
include volatility in the semiconductor industry, the risk of order delays and
cancellations, the risk of delays by customers in introducing their new
products and market acceptance of products incorporating subsystems supplied
by the Company, similar risks to the Company of delays in its new products,
our ability to continue to reduce costs and capital expenditures, our ability
to focus R&D investment and other risks detailed in reports and documents
filed by the Company with the United States Securities and Exchange Commission
and with securities regulatory authorities in Canada. Such risks,
uncertainties and changes in condition, significance, value and effect, many
of which are beyond the Company's control, could cause the Company's actual
results and other future events to differ materially from those anticipated.
The Company does not, however, assume any obligation to update these
forward-looking statements to reflect actual results, changes in assumptions
or changes in other factors affecting such forward-looking statements.

For more information contact:
Investor Relations, 613-224-4868, Ann Dempsey, (ext. 5632)